On Thursday, the Federal Reserve Board approved the final set of rules that will help protect consumers from unfair credit card pratices and improve disclosure associated with revolving credit accounts. The new rules are set to take effect July 1, 2010. The new credit card rules are primarily aimed at preventing arbitrary rate increases and providing consumers with adequate time to pay bills.

“The revised rules represent the most comprehensive and sweeping reforms ever adopted by the Board for credit card accounts,” said Federal Reserve Chairman Ben S. Bernanke.  “These protections will allow consumers to access credit on terms that are fair and more easily understood.”

In addition to arbitrary rate increases and providing adequate time to make payments, the new rules will also:

• Forbid banks from imposing interest charges using the “two-cycle” billing method.
• Prohibit the use of payment allocation methods that unfairly maximize interest charges.
• Address subprime credit cards by limiting the fees that reduce the amount of available credit.

The Board received over 60,000 comments from consumers and considered information gathered from consumer testing to finalize the rules on unfair credit card practices.

The Board will also be implentmenting revised rules to Regulation Z (Truth In Lending Act) for credit card and other types of revolving credit accounts. The new changes are designed to make sure that information is provided in a timely manner and in an easily understandable form. The final rules will require changes be made to the timing, format and content requirements in which consumers receive credit card applications, solicitations and disclosures.

“Our intent is to increase transparency and fairness in how credit card and deposit accounts operate, thereby enhancing competition and empowering consumers to better manage their accounts and avoid unnecessary costs,” said Federal Reserve Governor Randall S. Kroszner.  “The rules represent a significant step forward in consumer protection.  By ensuring fairness and making credit terms easier to understand, these safeguards should allow more consumers to benefit from using credit.”

For full details and to read the Federal Reserve’s full press release, click here.

Federal Reserve Chairman Ben Bernanke.

It has been sometime since we heard what Alan Greenspan had to say about the economy. That is because he isn’t the Federal Reserve Chairman anymore. Since 2006, Ben Bernanke has been the Federal Reserve Chairman. We haven’t really heard a lot from Bernanke…until now. The American economy continues to spiral downward. Millions of people around the country are in too much debt, either mortgage debt or other forms of debt. The situation on Wall Street continues to get worse.

The financial crisis that our country is experiencing right now could completely hinder more U.S. business growth. Ben Bernanke has pledged to “act as needed” to stabilize the unstable economy. Unfortunately, the Federal Reserve is having to fight the biggest financial battle since the Great Depression. Recently, Bernanke and his team at the Federal Reserve, have undergone intense questioning on Capitol Hill. The questioning is about whether or not the Bush administration’s plan will work. The Bush administration has suggested a $700 billion bailout plan.

This plan has already seen a massive amount of scrutiny. It seems as though the whole country is becoming more and more frantic about how to get our economy back up and rolling. The majority of Americans don’t seem to be listening to the Feds’ reassuring words. Is that because they don’t seem to be all that reassuring? The Federal Reserve and Ben Bernanke keep saying that the Fed will do everything in its power to provide relief to the weakening economy.

Ben Bernanke doesn’t seem as calm and collected anymore either. Do we have reason to be concerned? Absolutely. Our entire economy is falling out from underneath us. Because the economy is slowing down at an increased rate, we can expect more inflation for the rest of this year and next year. However, Bernanke is all for the Bush administration’s bailout plan. He continues to warn Congress about the consequences that our country will face if we don’t enact the bailout plan.

Bernanke says that if the bailout plan isn’t put into force, nobody will be able to borrow money. He says that this “scenario could result in the world’s largest economy grinding to a virtual halt.” Bernanke goes on to explain the caution in which lenders have begun to use. This cautious behavior can completely stop business growth.

Gas prices continue to be a factor in our economy. Although gas prices have dropped since the all time high of $147.27 per barrel, oil prices still continue to fluctuate. Since last week, oil prices have increased approximately $15. The dramatic fluctuation of oil prices leads to the problem of not being able to predict the future price of gasoline.

The Feds continue to meet to see if they should drop interest rates even lower. The Federal interest rates remains at 2 percent. However, the Feds have alluded to the fact that they will lower it further if times get really desperate.

Everyone needs to do what they can to help stimulate the economy. We need to be constantly watching Wall Street and the effects that it has on our economy. Now is the perfect time to be prepared.