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New rules from the Fed may be too late for some, which may prompt them to turn to debt consolidation
01/15/2010
As consumers continue to try and pay off debt associated with credit cards, the Federal Reserve Board recently released a new rule for these accounts.
The new requirements for credit card debt accounts were developed based on legislation passed by the government. The Credit Card Accountability, Responsibility and Disclosure Act is bringing with it changes to all aspects of credit accounts, including whether lenders can increase interest rates.
According to the rule released by the Fed, credit card debt lenders will not be able to increase interest rates during the initial year of an account. Furthermore, card companies will not be able to dole out payments in a manner that maximizes charges from interest.
The new stipulations from the Fed also limit a younger person's ability to get a credit card, while limiting the fees tied to subprime credit cards.
The rule is set to take effect February 22. And though it may help some consumers, others may already be in trouble when it comes to high interest rates on their credit cards. As a result, those consumers may consider debt consolidation, which can help consumer through offering lower interest rates than they have currently.
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