3 Based on extensive consumer testing, the Fed substantially revised the disclosures provided with credit card solicitations and disclosures contained in periodic statements to improve consumers’ understanding of costs associated with using their cards. In addition, we imposed several new restrictions to ban certain practices, such as double-cycle billing, that increase the cost of credit in ways that cannot be effectively disclosed.
Except in certain limited circumstances, issuers are prohibited from increasing interest rates applied to existing balances. They must also provide adequate notice of higher rates to be applied to future balances and are required to apply payments in excess of minimum payments to the balances that carry the highest interest rate.