Elastic Credit with New Credit Card Laws

Credit cards have long been a source for quick and easy cash when needed—making this type of credit very elastic. Credit cards are getting a facelift with the new credit card laws, which makes credit card purchases and cash advances more elastic than ever before.

One way that credit cards are becoming more appealing to cardholders is due to the new credit card laws passed by the Federal Reserve. The new credit card laws help to protect consumers from being charged high late and penalty fees by card issuers. The changes are due to take effect on August 22, 2010 and are the closing act to the Credit Card Accountability and Disclosure Act introduced by Congress in 2009.

New Credit Card Fee Limits

Credit card issuers can no longer set and charge their own rate fees. The new credit card laws limit late payment fees to a maximum amount of $25. The only exception is if a cardholder has made a late payment in the previous seven months, then the late fee limit does not apply. The penalties charged by the card issuer also have to be proportionate to the minimum payment due. For example, if the minimum payment due is $15 and the cardholder makes a late payment, the card issuer can only charge a late fee of $15. Cardholders who have credit cards that they do not use also do not have to worry about being charged fees for inactivity because inactivity fees are eliminated with the new law.