New rules announced today will take some of the sting out of those penalties that hit you when you don’t pay your credit card bill on time. Most fees will be capped at $25, regardless of your balance, and can be much lower in some cases. If your minimum payment is $10 and you’re late, your late fee can’t go above $10.

The new rules, which will go into effect in August, are the latest implementation of the CARD Act. While the $25 cap will apply to most bills, banks can tack on additional fees if you miss more than one payment:

Currently, many issuers charge up to $39 in late fees, so capping the fee at $25 will save many consumers money, says Josh Frank, senior researcher for the Center for Responsible Lending. He notes, though, that the rule allows issuers to charge higher fees if customers make more than one late payment.

The government also asked card issuers to reconsider some of the interest rate increases they made last year ahead of enforcement of the CARD Act. Hey, doesn’t hurt to ask, but isn’t the whole point of the CARD Act to give the government more tools than just the ability to say pretty please when issuers act up?

Fed adopts rules to protect credit card users, caps late payment fees [USATODAY.com]

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