New inactivity fees will be short lived

If you've been hit with a new inactivity fee on your credit card statement recently, fear not. Credit card companies will only be able to charge it up until the rules of the new Credit Card Act go into affect Aug. 22.

Ironically, the act is the reason many of the card companies are charging the fee in the first place. In an interview with Don Gonyea on National Public Radio earlier this week, Ron Lieberman, a financial columnist for the New York Times, explained that credit companies feel backed into a corner and are trying to make up for the dollars they expect to lose soon.

The Credit Card Act will limit interest rate hikes on cardholders who pay late as well as the late fees themselves. Credit card companies will no longer be able to charge more than $25 for a late fee and will not be able to charge fees greater than the amount of the missed or late payment. They will also be banned from charging inactivity fees.

"... those things will cost big banks potentially billions of dollars," Lieberman told Gonyea on the air. "And they need to find a way to make it up."

In the meantime, however, inactivity fees have been popping up on credit card statements, Gonyea said.

Those with good credit should be able to call and ask to have the fees waived, Lieberman said. He also said that people shouldn't have much trouble avoiding such a fee. All it takes to please the card companies is a tank or two of gas each month.

But for those who have several cards and don't use them, the only answer may be to close old accounts until the new act takes effect next month.

-Amanda H. Miller