Fed Adopts Credit Card Rules to Protect Consumers

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A new set of credit card rules, adopted Tuesday by the Federal Reserve, were designed to protect users from lofty payment charges and other penalty fees.

According to the new regulations, credit card companies will no longer be allowed to charge customers more than $25 for late fees.

Inactivity fees have also been prohibited, and multiple penalty fees have been prevented on a single late payment.

"The new rules require that late payment and other penalty fees be assessed in a way that is fairer and generally less costly for consumers," said Fed Governor Elizabeth Duke, the central bank's point person on the rules.

"Card issuers must also reevaluate recent interest rate increases, and, if appropriate, reduce the rate," she added.

The new rules will take effect on August 22.

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