How the final phase of credit card legislation may affect your monthly bills — and budget.

You may have noticed a few changes on your credit card statements recently, including lower late fees. That’s because the final round of new regulations from last year’s sweeping credit card legislation just went into effect in August.

These most recent credit card regulations protect consumers from unreasonable penalty fees and require credit card companies to re-evaluate interest rate increases at least once every six months.

“USAA is in favor of anything that helps protect consumers, and our credit card policies have typically been more consumer-friendly than industry norms,” says Steve Basilotto, vice president of credit card product management for USAA Federal Savings Bank.

“Our membership uses their USAA cards more frequently, and they pay their bills more consistently than average cardholders,” says Basilotto. “Their financial discipline helps us keep costs low and allows us to pass the savings on with rewards programs, lower fees and competitive rates.”

Here’s a summary of new rules that went into effect Aug. 22, 2010, and what they mean for USAA cardholders:

1. New Caps on Penalty Fees

The change: In general, card issuers can’t charge more than $25 for late or returned payments or over-the-limit transactions unless:

  • A cardholder shows a pattern of repeated violations, such as making more than one late payment within six months.

  • The card issuer determines that a higher fee reasonably offsets its cost of dealing with the violation that caused the penalty. The card issuer has to review this determination every 12 months. Alternatively, rather than making a fee decision every 12 months, card issuers can simply charge a penalty fee up to $25 for the first violation and up to $35 for each repeated violation that occurs during six billing cycles.

In any case, a penalty fee can’t exceed the dollar amount associated with the violation that caused the fee. For example, if you’re late making a $20 minimum payment, the late fee can’t exceed $20. Or, if you exceed your credit card limit by $10, you can’t be charged an over-the-limit fee of more than $10.

For USAA cardholders: USAA will only charge up to $25 for its late and returned payment fees but has decided not to charge the $35 allowed for multiple violations. USAA doesn’t charge over-the-limit fees.

2. Prohibited Fees

The change: A card issuer can’t charge a fee for a transaction it declines, a fee if you don’t use your card or a fee if you close your account.

For USAA cardholders: USAA has never charged any of these fees.

3. One-fee Limit

The change: A credit card company can only charge one fee for the same conduct during a billing period, whether it results in a single violation or multiple violations of your credit card terms. For example, a card issuer can’t charge two late fees for a single late payment, or both a late and returned payment fee based on a check that is received after the due date and then bounces.

For USAA cardholders: If you pay late and also bounce a check in the same billing cycle, USAA may charge either a late or retuned payment fee but not both. We’ve never charged more than one late fee based on a single missed payment.

4. Re-evaluation of Rate Increase

The change: Previously, your credit card annual percentage rate could be raised permanently. Now, whenever a card issuer raises your rate, it is required to review its decision every six months to determine if your rate should be decreased. If so, the company must reduce your rate within 45 days of its decision. This requirement doesn’t apply to any rate increases made before Jan. 1, 2009, or to rate increases due to the operation of a variable rate or the expiration of a promotional rate. The first review must be made by Feb. 22, 2011.

For USAA cardholders: USAA will begin its account reviews in February 2011.

5. Explanation of Rate Increase on Future Balances

The change: Any time your credit card company increases your APR after Aug. 22, 2010, it must tell you why in a written notice sent at least 45 days prior to the rate increase.

For USAA cardholders: As we always have, USAA will notify you in writing of any APR changes and the reasons.