Credit card customers get a break in 2010

Credit card customers will get relief from certain fees and other questionable policies thanks to a decision this week by the Federal Reserve.

The Fed had weighed five proposals for months, with heavy public interest in the issue. Among the five changes were a ban on sudden rate increases and on the "two cycle" billing method that allows higher interest calculations.

The other changes are a requirement for consumers to have "reasonable time" to make payments, a ban on payment methods that maximize interest charges for credit companies, and reforms to subprime credit cards that use "feeder fees."

The new reforms take effect in 2010.

"The revised rules represent the most comprehensive and sweeping reforms ever adopted by the Board for credit card accounts," said Federal Reserve Chairman Ben S. Bernanke. "These protections will allow consumers to access credit on terms that are fair and more easily understood."

The credit card industry had warned that the plan would lead to higher costs and reduced lines of credit for all users. Before the plan was voted on however, analysts were already predicting the industry would scale back up to $2 trillion in lines of credit in the coming months.

Source : Here