Do we nee a credit card bill of rights?
The Credit Cardholders’ Bill of Rights was approved today by the House Financial Services Committee by a vote of 48 to 19. The bill now moves to the House of Representatives for consideration.
The legislation would provide credit card customers protection against certain practices which are the norm these days.
Some of the pratices include double-cycle billing, due-date gimmicks, and retroactive interest rate hikes.
The bill would also increase the advance notice of impending rate hikes and give credit card holders the information and rights they need to manage their credit responsibly.
Banks and credit card companies would have to give at least 45 days written notice before the hike the annual percentage yield (APR) on a credit card. Let’s hope the notice is prominatly displayed and isn’t in fine print.
The badly crippled banks aren’t going down without a fight, they are lobblying against the measures which include:
Protect cardholders against arbitrary interest rate increases
Prevent cardholders who pay on time from being unfairly penalized
Protect cardholders from due-date gimmicks
Prevent companies from using misleading terms and damaging consumers’ credit ratings
Empower cardholders to set limits on their credit
Require card companies to fairly credit and allocate payments
Prohibit card companies from imposing excessive fees on cardholders
Protect vulnerable consumers from high-fee subprime credit cards
Bar issuing credit cards to vulnerable minors
The bill’s sponsor, Representative Carolyn B. Maloney said:
“This landmark legislation helps level the playing field between cardholders and card companies. For too long the relationship has been one-sided; but markets function best when all sides know what they’re getting into — and these deceptive practices need to be stopped. The Credit Cardholders’ Bill of Rights brings more transparency to the contractual relationship and give consumers the tools they need to responsibly manage their own credit.”
“The substantial reforms in this bill are needed now more than ever, as working Americans have increasingly turned to credit cards to help pay medical bills, buy groceries, and make ends meet in this troubled economy.”
The legislation would provide credit card customers protection against certain practices which are the norm these