New Credit Rules One Year Later: What Effect has it had? | Business
One year after new credit card regulations were enacted to stop some questionable billing practices and where are we?
- Over the limit penalty charges have been dramatically decreased. Previously, card holders could be hit with over the limit charges that effectively kept them over the limit. Now that has been curtailed enough where the monthly payment can be applied to the actual balance owed.
- Before the new rules, card issuers would routinely approve transactions that would cause cardholders to exceed their limits resulting in the dreaded over the limit fees. Now customers cannot be penalized for going over their limits unless they say they want such transactions to go through.
- Increased customer knowledge. It was obvious that there needed to be a better understanding of how the pricing, fees and charges worked on credit card accounts. Since the new regulations went into effect, consumers have stated that the new disclosures have prompted them to take action whether it is reading their bills more closely or making larger payments.
- Most importantly, fee charges to the consumer are down overall. Previously, cardholders paid nearly 900 million in fees (this is outside of the balance that the consumer actually charged on the card) and now that amount has been cut nearly in half.