overlimit fees Tag

24 Jun Credit Cardholders’ Bill of Rights Act of 2009 Signed into Law

On May 22, 2009, President Obama signed into law the Credit Cardholder's Bill of Rights Act of 2009.   The provisions of this new law go into effect in February, 2010.  A detailed explanation of the provisions of this new law may be found at Adam Levitin's informative article on the CreditSlips.com blog. In reviewing the legislation, it appears that many of the provisions are designed to eliminate many of the tactics used by credit card lenders to tack on fees or increase interest rates quickly and without notice. I especially like the provision in the bill that allows consumers to opt out of "overlimit" credit.  In other words, if you have a credit limit of $10,000 on a card and you incur charges that bring your balance to $10,500, many credit lenders now will permit the transaction but then charge you an overlimit fee.  If you use the card again, you will get hit with another, then another overlimit fee.  If you were not aware that you had reached your credit limit you could find yourself with hundreds of dollars in overlimit fees but no knowledge about these fees until you received your bill.
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