Fed Moves Ahead On Credit Card Protection Plan

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.

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  • by Rose Location: Goldsboro, NC on Sep 30, 2009 at 01:48 PM
    Something needs to be done quicker than 2010. The people who have high balances are the ones that need help most. These folk will never get paid out of debt with the high rates slapped on their balances. Credit card charges should be limited according to the interest earned and paid to an individual's savings account.
  • by Scott Location: Mt Olive on Sep 30, 2009 at 09:32 AM
    People need to wake up. If you want a $2000 dollar tv or another non-necessity save your money and buy it later. If your car breaks down and cost $2000 to fix use your credit card then pay as much as you can to carry the balance for the least amount of time possible. Using it responsibly would go along way.
  • by Anonymous on Sep 30, 2009 at 05:08 AM
  • by Barlow Location: Winterville on Sep 30, 2009 at 04:30 AM
    Just goes to show you what happens without adequate regulation. They pass out cards to everyone and their brother and then when they don't get paid back, they raise the rates on those that pay, so then they can't pay and THEIR credit rating is shot. Nothing but unbridled greed.
  • by BJ Location: nc on Sep 30, 2009 at 04:07 AM
    Now I understand why my card rate just got hiked for no reason, what a scam
  • by William on Sep 30, 2009 at 03:20 AM
    I don't know why they are waiting to enact these new regulations. Credit cards have already started going up on interest rates for no reason now since they won't be able to do so in Feb. This should've been enacted as soon as they made the decision.

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