The Federal Reserve is proposing rules to better protect Americans from sudden hikes in interest rates on credit cards.
The plan would generally bar rate increases during the first year after an account is opened. It would also virtually ban increasing the rate on existing credit card balances. The proposal also would require credit card companies to obtain a customer's consent before charging fees or transactions that exceed their credit limit. Companies would also be forbidden from issuing credit cards to people under the age of 21, unless they have the ability to make the required payments or have a co-signer, such as a parent.
The Fed is required to take the action under legislation passed by Congress and signed into law by President Barack Obama in May.
The public and industry will have a chance to weigh in on the provisions, which are slated to take effect on Feb. 22 of next year.
Copyright 2014 by The Associated Press. All Rights Reserved.