Eliminate Credit Card Debt with Help from the Fed's New Regulations

[Mar 23, 2010.]

 

It is comforting to know that the government is at least trying to help Main Street. Years of poor regulations of credit card companies have proved horrible for Americans who now find themselves overwhelmed by debt.

Credit Card Debt Relief Just Got a Little Easier

On February 22, 2010, the second phase of the Federal Reserve's new credit card laws went into effect. Only three weeks later, they issued a press release increasing their efforts to reduce fees. This third phase of the Credit Card Act of 2009 will go into effect on August 22, 2010. If you are trying to get out of debt, the recent actions taken by the Federal Reserve will help. You may not be able to eliminate credit card debt overnight, but these changes will help make things easier.

A Summary Of The Proposed Amendment

• The Federal Reserve has proposed to amend Regulation Z, the Truth-In-Lending law. Credit card companies will no longer be allowed to charge "large penalty fees for small missteps by consumers." Late fees and over the limit fees cannot be excessive. For example, if the borrower is late making a $20 minimum payment, the credit card company cannot charge a $39 late fee. The late fee could not exceed $20. The misstep and the fee must be in line. Likewise, if the borrower goes over their credit limit by $10, the over the limit fee should be $10 and not $35.
• The credit card companies will no longer be able to charge multiple fees for the same misstep. For example, if you make your $20 minimum payment late, and are assessed a $39 late fee that then puts you over your limit, you cannot additionally be charged a $35 over the limit fee.
• Credit card companies are being asked to reconsider recent increases to your interest rate. If your interest rate went up recently for one of the issues the Federal Reserve is trying to revise, the Federal Reserve has asked lender's to rethink and reverse the rate hike.

New Changes Help You Get Out Of Debt Faster

It is not easy to eliminate credit card debt once you are in over your head. Having late fees--on top of over the limit fees, on top of interest rate increases--make the job that much harder. The Federal Reserve is making revisions to make it easier for you to get out of debt. For additional help, look for debt relief options in your area.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.