NEW YORK (TheStreet) -- Banks and credit card companies will be required to adhere to the final provisions of Credit Card Act of 2009 beginning next week. However, the new regulations are unlikely to curtail card offers once again piling up in consumers mailboxes, some say.
As of August 22, banks with large credit card arms like JPMorgan Chase
In terms of annual fees, 28% of new cards carried annual fees down. That was down from 33% in the second quarter of 2009, according to Mintel. The survey added that fifty-six percent of the mail offers promoted an introductory annual percentage rate for balance transfers and new purchases. This was up from 37% in the year-earlier quarter.
Included in the final provisions that take effect Sunday, card issuers will be required to:
- Designate "reasonable and proportional" penalty fees to the omission or violation.
- Periodically review all interest rate increases since January 2009 and reduce rates when a review indicates that a reduction is warranted.
- Amend the Electronic Fund Transfer Act to limit dormancy, inactivity, and service fees associated with gift cards, according to the House Committee on Financial Services' web site.
At that time industry observers became concerned how credit card firms would make up for the lost revenue and many firms started hiking interest before the majority of the measures were enacted. Consumers, on the other hand, were looking to say farewell to enticing measures for new cards such as teaser rates and other perks and hello to a return to annual card fees.
But a July survey by Mintel Comperemedia, a direct marketing consulting firm, says many of the potential negative outcomes from the new credit card regulations have yet to materialize while offers continue to be mailed.
In fact, competitive offers are increasing in the credit card industry. In the second quarter U.S. consumers received nearly 1.1 billion offers for new credit cards, up from just 419 million in the year-earlier period, the the survey said.