If you’ve ever been charged a $39 late fee because you forgot to make your credit card payment on time, there’s (sort of) good news. The Federal Reserve Board on Tuesday approved its final rule limiting unreasonable late payment and other penalty fees.

The Credit CARD Act directed the Fed to develop rules to make sure penalty fees are reasonable and proportional to the violation in question. Here's a summary of the new rules:

Credit card issuers can’t charge a late payment fee (or other penalty fee) of more than $25, unless a cardholder is habitually paying late or otherwise breaking the credit card agreement, or unless the issuer can demonstrate that a higher fee is justified based on the cost of processing those transactions. (In addition to late fees, most cardholder agreements allow issuers to charge NSF fees for bounced payments. Overlimit fees are allowed only if you’ve opted in to allowing your card issuer to authorize transactions that put you over your limit.)

A $25 fee may not even be allowed in some situations. That’s because issuers will no longer be allowed to charge penalty fees that exceed the dollar amount associated with the violation. That means, no more $39 late fees because you made your $20 minimum payment late. Instead, in that case, the fee would be capped at $20.

And inactivity fees are banned outright. Issuers who want to charge cardholders who don’t use their cards will have to rely on annual fees unless they can come up with something more creative that doesn’t draw the ire of the regulators.

Tomorrow, I’ll discuss the other part of the Fed’s ruling that requires issuers to reevaluate recent interest rate increases and, if appropriate, reduce the rate. These rules are effective August 22, 2010.

Gerri Detweiler – Personal finance author and Credit Advisor for Credit.com, Gerri contributes budgeting, debt recovery and savings information online. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights.