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How the new credit card rules will impact you

If you pay your credit card bills on time, the new credit card rules that went into effect yesterday will have a very limited impact on your wallet.  This is because the key rules are aimed at penalty fees. A second element of the new rules could help consumers who have seen their interest rates increase dramatically, but if this rule proves effective, it still won't save you money until February, if not later.

Of the new credit card rules, the ones limiting penalty fees will have the broadest impact. Two days ago, many credit card companies charged late fees of $39. Today, the maximum late fee cannot exceed $25 or the minimum payment due. Thus, a person who has a $10 minimum payment and fails to pay on time can only be charged $10.

These limitations on fees will provide the most help to people who accidentally miss payments. Those who pay late frequently may find that, instead of late fees, credit card companies may start charging them annual fees, reduce their credit limits, raise their interest rates or close their accounts altogether.  And don't be surprised if the minimum payment on your card increases to $25.  Credit card companies will be looking to recoup as much lost income as possible, so the days of $10 minimum payments may soon be coming to an end.

The second major element of the new credit card rules requires credit card companies to re-evaluate all rate increases since January of 2009 and reduce interest rates on customers who qualify. Unfortunately, this rate reduction does not have to conform to a standard and banks can come up with a plethora of reasons to leave rates unchanged. 

To make matters worse, banks aren't required to complete this review for another six months, so if you are waiting for a rate reduction, it may be best to seek out a 0% APR balance transfer credit card.  Not only will doing a balance transfer reduce your rate immediately, it will reduce it much more than your credit card company will if you qualify for a rate reduction.

Overall, the new credit card rules for August 22nd won't impact your wallet in the same way as the first set of rules enacted on February 22nd. While these rules cut down penalty fees and leave the door open to interest rate decreases, they will primarily help those who frequently incur penalties and not the vast majority of credit card users who manage their accounts correctly.

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