Debt management plan may be an option for consumers as Fed considers new credit card rules

By Peggy Stillwell on Feb 28th, 2010

The Credit Card Accountability, Responsibility and Disclosure Act could save consumer billions of dollars, the Pew Safe Credit Cards Project reported recently.

Two of the practices that are limited by the Credit CARD Act include retroactive rate increases and sudden increases in penalty interest rates. Both of these practices, Pew noted, cost consumers in the country at least $10 billion a year.

"The implementation of the Credit CARD Act is a major victory for millions of American households, many of whom will be able to save hundreds or even thousands of dollars," said Nick Bourke, manager of the Pew Safe Credit Cards Project.

Pew also noted that the Federal Reserve Board will need to issue new rules as a result of the Credit CARD Act. The project encouraged the Fed to limit penalty amounts to reflect the amount a person is past due while also putting a ceiling on penalty interest rates.

Until the Fed issues its new rules, some consumers may have to struggle with the size of penalty interest rates. In order to avoid this, some people may consider a debt management plan, which could help consumers stay current on their accounts.

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