Earlier this year, the Federal Reserve implemented new credit card rules designed to protect consumers. The highlight of those rules was a requirement that credit card companies notify customers ahead of interest rate increases and a prohibition on rate increases in the first year.
The Federal Reserve, which is charged with implementing the card rules that were approved by Congress last year, proposed three new rules Tuesday that seek to clarify areas of the new law.
- A credit card promotion that waives interest charges for a period of time will be viewed the same way under the protection laws as a promotional rate. Thus, a credit card company that offers to "waive" interest charges for six months would be prohibited from revoking the waiver during that period unless the account becomes delinquent.
- Application fees required to open an account are covered by the same limits that cap any fees charged during the first year of an account. An existing rule keeps these fees from exceeding 25 percent of the account's initial credit limit. Application fees will be included when making that calculation.
- Card issuers must consider a consumer's personal income -- not just his or her household income -- when evaluating him or her for a new credit card account.
The Fed will accept comments on the proposed new rules for 60 days before formally implementing them.
For more information, view the Fed's announcement of the new rules here.