Fees not addressedAnnual fees. While the Credit CARD Act bans annual fees charged for inactivity on the account, it doesn't prohibit or cap annual fees in general. Luckily, the prevalence of annual fees and the average fee amount have declined post-CARD Act. The mean fee fell to $78 in the second quarter of 2010 from $84 in the fourth quarter of 2009, according to Synovate, a market research firm that tracks credit card mailings.
The share of card offers with a yearly fee also dropped, from 36 percent of offers in the fourth quarter to 25 percent in the second quarter, and the trend continues. The percentage of card offers with annual fees slipped to 24 percent in July, and to 20 percent so far in August, says Anuj Shahani, director of competitive tracking services at Synovate.
"Issuers are hesitant to send an offer carrying unattractive terms, such as an annual fee, as consumers will likely opt for an offer of similar caliber with no annual fee," he said in an e-mail response.
All nonpenalty fees. Except for the restriction on account fees charged during the first year, there is no cap on nonpenalty fees, such as a fee to expedite a payment or transfer a balance from another card. Cash advance and balance transfer fees have been trending up, in fact. For bank credit cards, the median cash advance and balance transfer fee rose from 3 percent of the transaction amount in July 2009 to 4 percent in March 2010, according to the report from the Pew Health Group.
New fees aren't prohibited. There is no explicit prohibition in the law against the invention of new fees. For this reason, it's a good idea to read all correspondence from card issuers and review monthly statements carefully.
So far, however, new fees haven't surfaced on card offers. "We have not seen any 'new' fees show up on mailings," says Shahani. "At most, we have seen the addition of a 'returned payment fee' on select mailings, but this would technically count as a penalty fee."
When advance notice is requiredCredit card issuers must provide 45 days' advance notice before increases to certain fees take effect. Such fees can include annual fees, transaction fees and penalty fees -- basically, any fees that were disclosed in the "account-opening table," says Chi Chi Wu, a staff attorney at the National Consumer Law Center. This table summarizes pricing information for the account, such as the APRs and fees for cash advances and balance transfers. New disclosure rules that took effect in July require this table for credit card offers and agreements.
"You can reject changes to the fees that are disclosed in the account opening table," she says. Doing so can result in closure of the account and an increased minimum payment.
The issuer must also notify you 45 days in advance before it applies a fee for going over a lowered credit limit.
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