New government regulations over the way credit card companies can penalize cardholders are now in effect.

Penalty fees for late payments or a purchase that puts one over his or her credit limit, will not result in fees higher than $25.

If the interest rate on the card increases, the credit institution has to review that decision every six months to see if the higher rate is still warranted.

Inactivity fees on all cards are banned. However, there are still loopholes that financial companies can use to get around some of these new rules.

Cardholders are encouraged to keep an eye on their statements for fees the credit card institutions may charge to make up for the money they may lose under the new federal guidelines.