Terms and conditions of credit-card accounts

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The U.S. Federal Reserve proposed rules today that will end banks’ ability to apply credit-card payments to balances with the lowest interest rates first, implementing legislation Congress passed in May.

The Fed also proposed that creditors obtain consumers’ consent before charging fees for transactions that exceed credit limits. Restrictions on lending to people under the age of 21 and subprime credit-card fees were also included, the Fed said in a statement.

“The rule bans several harmful practices and requires greater transparency in the disclosure of the terms and conditions of credit-card accounts,” Federal Reserve Governor Elizabeth Duke said in the statement.

President Barack Obama signed the credit-card legislation in May, describing its provisions as “common-sense reforms” that would “protect consumers.”