CHICAGO – Consumers, particularly those who are consistently late in paying credit-card bills, can breathe a sigh of relief: The Federal Reserve said Tuesday it is limiting penalty fees to no more than $25 in most cases as well as banning so-called “inactivity” fees.

In its third stage of implementing the sweeping Credit Card Accountability Responsibility and Disclosure Act of 2009, the Fed also said it’s putting the squeeze on late fees that are higher than the consumer’s violation. For example, a consumer who was late paying a $20 minimum payment could be charged a $39 penalty fee. The Fed on Tuesday said penalty fees cannot exceed the dollar amount of the consumer’s violation.

“The new rules require that late payments and other penalty fees be assessed in a way that is fairer and generally less costly for consumers,” said Federal Reserve governor Elizabeth Duke.

The rules go into effect Aug. 22.

There are exceptions for chronic card abusers. Those with “repeated violations” still could face higher fees.

Consumers have long complained about escalating late-payment fees. The $25 cap makes the fees standard Meanwhile the ban on penalty fees above the dollar amount of the consumer’s violation will help do away with exorbitant costs for, say, a cup of coffee if a purchase results in a penalty.

A separate law on debit-card overdraft fees soon will help address the “$40 coffee” issue as well.