Making Cents Blog

A Recap of Recent Regulatory Changes

Two key dates and two major changes later, you may be scratching your head wondering what all the excitement was about. Below is a recap of Augusts’ changes as they relate to ATM/debit transactions and credit cards, and what they mean to you.

Reg E—Overdraft Options (August 15, 2010)

In the past, once your account had been open for 60 days and in good standing, all transactions were covered under the Overdraft Privilege Program up to $700 unless you opted out of the program altogether. Now, ACH and check transactions are still covered after the 60 days. ATM and debit transactions, however, require a opt-in from you; otherwise the transactions are declined if the transaction would cause your account to be negative.

If you haven’t opted in and would like to, you can find the form here.

CARD Act—New Credit Card Rules (August 22, 2010)

Reasonable Penalty Fee.

Your credit card company cannot charge you a fee of more than $25 unless:

  1. One of your last six payments was late, in which case your fee may be up to $35; or
  2. Your credit card company can show that the costs it incurs as a result of late payments justify a higher fee. In addition, your credit card company cannot charge a late payment fee that is greater than your minimum payment.  So, if your minimum payment is $20, your late payment fee can’t be more than $20.  Similarly, if you exceed your credit limit by $5, you can’t be charged an over-the-limit fee of more than $5.

Other Fee Protections

  1. No inactivity fees.  Your credit card company can’t charge you inactivity fees, such as fees for not using your card.
  2. One-fee limit.  Your credit card company can’t charge you more than one fee for a single event or transaction that violates your cardholder agreement. For example, you cannot be charged more than one fee for a single late payment.

Explanation of Rate Increases

If your credit card company increases your card’s Annual Percentage Rate (APR), it must tell you why.

Re-evaluation of Recent Rate Increases

If your credit card company increases your APR, it must re-evaluate that rate increase every six months.  If appropriate, it must reduce your rate within 45 days after completing the evaluation.

If you have an Alliance credit card you’ve never been subjected to exorbitant fees or arbitrary rate changes. If you’re interested in moving your other credit card balances to Alliance, call us at 800.232.8669.

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