New credit card rules take effect today, Sunday 22nd

Category Economy, Finance | Sunday, August 22nd, 2010

Fees for late payments and other transgressions will be capped to the amount of the violation, up to $25. Previously, these fees were often between $35 and $39 regardless of how much was owed. Also, a single violation can no longer result in more than one fee.

Technically, there isn’t an outright ban on penalty fees higher than $25. Banks that want to impose a higher fee simply need to give regulators justification for doing so.

For example, a bank might provide an analysis showing that the costs associated with late payments average out to $30 per violation, said Lauren Bowne, an attorney with Consumers Union in San Francisco. It’s too early to tell whether banks will pursue this route, but the door is open.

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