The Credit Cardholder’s  Bill of Rights (H.R. 627) has passed the House and that it is on the way to becoming law.  This legislation will level the playing filed for consumers by ending excessive credit card fees, sky-high interest rates, and unfair, incomprehensible agreements that credit card companies revise at will.

Consumer credit card debt is now approaching $1 trillion, double the amount held in 1996.  The credit card industry has found new ways to make profits by exploiting loopholes and taking advantage of little regulation and poor oversight.  In 2008, credit card issuers imposed $19 billion in penalty fees on families with credit cards and this year, card companies will break all records for late fees, over limit charges, and other penalties, pulling in more than $20.5 billion.

The Credit Cardholder’s Bill of Rights will protect American credit cardholders with the following common sense reforms to our financial system:

  • Prevents card companies from unfairly increasing interest rates on existing card balance, retroactive increases are permitted only if a cardholder is more than 30 days late, if a promotional rate expires, if the rate adjusts as part of a variable rate, or if the cardholder fails to comply with a workout agreement.
  • Requires card companies to give 45 days notice of all interest rate increases or significant contract changes (e.g. fees).
  • Ends unfair “double cycle’ billing.  Card companies couldn’t charge interest on debt consumers have already paid on time.
  • If a cardholder pays on time and in full, the bill prevents card companies from piling additional fees on balances consisting solely of left-over interest.
  • Prohibits card companies from charging a few when customers pay their bill.
  • Many companies credit payments to a cardholder’s lowest interest rate balances first, making it impossible for the consumer to pay off high rate debt.  The bill bans this practice, requiring payments made in excess of the minimum to be allocated proportionally or to the balance with the highest interest rate.
  • Requires card companies to mail billing statements 21 calender days before the due date (up from the current 14 days), and to credit as “on time” payments made before 5 p.m. local time on the due date.
  • Extends due date to next business day for mailed payments when the due date falls on a day a card company does not accept or receive mail (i.e. Sundays and holidays).
  • Prohibits card companies from knowingly issuing cards to individuals under 18 who are not emancipated.

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It is my sincere belief that you will find  the short period of time it takes to learn about this exciting new program- to be time well spent!

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