When overused, credit cards can lead to a large amount of debt, leaving consumers unable to pay their monthly balances. This results in their credit score dropping and could lead to legal action being taken against them by the credit card company. However, there are several regulations in place that protect consumers from being too harshly penalized.
One of the biggest of these protections is fraud protection. Consumers who see errors on their credit card statements, especially if there are multiple charges in dispute, can quickly have their card deactivated and the charges investigated. If the charges are deemed fraudulent, the consumer is not responsible for any of the charges.
Consumers are also protected from being charged excessive late fees. When a consumer fails to pay their minimum payment by the date given, they will be assessed a late fee. However, most do not realize that this late fee cannot be more than their minimum monthly payment. It is also capped depending on inflation. In 2016, the first late fee may not be more than $27, and any late fees incurred within the next six billing cycles capped at $37.
A consumer’s payment due date must fall on the same date each month, making it easier for consumers to remember to pay their bills. If no mail is delivered on that date, mailed payments will still be accepted as on-time the following business day.
If you want more credit, check out MoneyTips' list of credit card offers.