Fed Plans to Revise Credit Card Rules

If the Fed gets its way, credit card companies will no longer be able to obfuscate interest rates and fees in tiny print. 

In the proposed rule, which the Fed released yesterday, credit card companies will have to tell customers 45 days before terms of a credit card contract are changed.  And the rules would expand the list of changes requiring advance notice to include those involving penalty interest rates, which often range above 30 percent.

Additionally, along with larger font-size, credit card companies will have to say on monthly statements what interest and fees a customer had paid so far for that calendar year.

Credit card issuers aren’t arguing too much with the proposed plan from the Fed.  They hope these changes, primarily cosmetic, will head off attempts in Congress to outlaw some of the industry’s most complained-about practices.

Consumer groups, of course, feel the rules do not go far enough.  Big on the list: charging interest on debt that has been paid.

The Fed will seek comment for four months, then make changes based on those comments before issuing final rules.