Feds set new credit card rules

New rules governing the credit card industry have received final approval and will be in effectin the new year,Finance Minister Jim Flaherty said Wednesday.

"By increasing transparency, our government is taking real action to protect consumers," the minister said ina statement.

Among the requirements, lenders must obtainexpress consent for credit limit increases, provide a summary box on statements to describe all fees, and put limits on debt collection practices.

The new regulations will be largely in effect as of Jan. 1, 2010.

But Ottawa did give lenders some grace in implementing a minimum 21-day, interest-free grace period on all new credit card purchases when a customer pays the outstanding balance in full.

That requirement will not come into effect until Sept. 1, 2010.

Critics of the bill have called it a largely symbolic act that will ultimately do nothing to help consumers.

"Increasing the font size on a credit card contracts doesn't help Canadian families who are hurting right now," New Democrat MP and consumer protection critic Glenn Thibeault said when the rules were proposed in May. "Interest rates are at an all-time low, yet credit interest rates remain at an all-time high."

The regulations do nothing to offer retailers relief from rising interchange fees fees merchants pay to the financial firms that operate customer cards every time a transaction is made. In some cases, such fees have nearly doubled in the last two years, Liberal MP and consumer affairs critic Dan McTeague said.

"Like with so many other files, they are throwing the public a few bones," he said. "But [they] are ignoring other very important aspects of this issue, hoping the other glaring problems will simply disappear."

The rules will apply to all credit cards issued by federally regulated institutions such as chartered banks and some retail stores.

Some provisions within the rules have broader applications to products like fixed- and variable-rate loans and lines of credit, the ministry said.