Washington, DC -- Congressman Eliot Engel announced two new regulations affecting credit cards will go into effect this week to save consumers even more money, as part of the Credit Cardholders’ Bill of Rights legislation signed into law last May.

In addition to the tough consumer protections already implemented, on August 22, two additional provisions of the Credit Cardholders’ Bill of Rights will go into effect.  One provision requires penalty fees for such things as late payments to be reasonable and proportional, and a second will require credit card companies to re-evaluate any interest rate increases every 6 months and, if appropriate, reduce that rate within 45 days of the evaluation.

Rep. Engel said, “A recent report from the Pew Charitable Trust called the Credit Cardholders’ Bill of Rights ‘a major milestone in the move to make credit cards safer, transparent and fairer for consumers.’ Another analysis, by USA Today, concluded that the new credit card protections, along with debit-card overdraft reforms recently instituted by the Federal Reserve, will save U.S. consumers at least $5 billion in fees this year alone.”

The 11-term congressman added, “This year U.S. consumers can expect to save billions of dollars because of the Credit Cardholders Bill of Rights, which translates into hundreds if not thousands of dollars for individual households. This is serious money for these families.”

Some of the key consumer protections in the Credit Cardholders’ Bill of Rights that have already gone into effect include prohibiting retroactive interest rate hikes on existing balances and banning double-cycle billing (charging interest twice on balances paid on time).

It also requires statements be mailed 21 days in advance of the payment date, that payment dates to remain the same each month, a 45-day advance notice of interest rate, fee and finance charge hikes, the strengthening of protections for young people, and that billing statements be in plain English and show how long a balance will take to be fully paid off if only the minimum payment is made.

“Requiring credit card penalty fees to be reasonable and proportional is another key protection for America’s consumers – ensuring consumers no longer face disproportionate penalties by creditors,” Rep. Engel concluded.

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