Yesterday, I received a letter from U.S. Bank letting me know, among other things, that my minimum payment was increasing to $30 or 1% of the balance, whichever was higher. I predicted credit card issuers would do this back when Feds introduced the rule to limit late fees. I won’t be surprised if I get more letters from credit card issuers saying they’re increasing minimum payments.
The new Federal law on penalty fees says that the fee can only be as much as the violation for a maximum of $25 or $35 for repeat offenses. For example, a late $10 minimum payment can only receive a $10 late fee. Similarly, a $10 over-the-limit charge can only result in a $10 over-the-limit fee. It’s no surprise that credit card issuers would increase minimum payments, because it allows them to charge the maximum late fee allowed by law. The law goes into effect on August 22, 2010.
Has your credit card issuer increased your minimum payment in response to the new law on penalty fees?
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