The FED (Federal Reserve) recently created new laws  to regulate credit card companies from “unreasonable” late payment and penalty fees. The new rules also call for issuers to “reconsider” interest rate hikes imposed since 2009. Millions of Americans have piles  of credit card debt which is suffocating  them in fees and interest payments.

These new laws will assist  to solidify other consumer debt  rules that were signed into law by President Obama as the “Credit Card Accountability Responsibility Disclosure Act” and will take effect August 22, 2010.

“The new rules require that late payment and other penalty fees be assessed in a way that is fairer and generally less costly for consumers,” states Federal Reserve Governor Elizabeth A. Duke. “Card issuers must also re-evaluate recent interest-rate increases and, if appropriate, reduce the rate.” 

One of the main tenets  of the latest  rules  is a cap in most late payment fees. presently many credit card companies are charging $39 or more in late fees; but the new rules cap that fee at $25.

Another standard  is to ban credit card companies from charging a fee that is larger than the umbrage (ie a $5 late payment can only be assessed a $5 fee).

Companies  are also now banned from charging numerous  fees in response to  a single late payment or other single violation of terms; and “inactivity” fees for the non-use of cards is now prohibited  wholly.

One of the ways consumers had been avoiding such fees is through instant approval credit cards which normally do not have any fee structure .

While  the new laws    have received some accolades , many more are saying  that the changes
 don’t do enough to change the underlying problem; the huge measure of credit card debt that Americans are trying to get out from under.

Paul Hollender from Bloomfield-based firm Corash & Hollender states, ”It’s taking away some of the most outrageous things that credit-card issuers are doing, but I think it’s not enough to stem the tide of impending bankruptcies.”