House passes credit card bill that helps consumers

House passes credit card bill that helps consumers
WASHINGTON – Riding a crest of populist anger, the House on Thursday approved a bill to restrict credit card practices and eliminate sudden increases in interest rates and late fees that have entangled millions of consumers. The legislation, dubbed the Credit Card Holders' Bill of Rights, passed by a bipartisan vote of 357-70 following lobbying by President Barack Obama and members of his administration.

The measure would prohibit so-called double-cycle billing and retroactive rate hikes and would prevent companies from giving credit cards to anyone under 18.

Most of it won't become effective for a year, if it is signed into law, except the part about giving consumers 45 days notice before their interest rate increases. I'm not too big on government regulating everything, but the things the credit card companies have been getting away with are ridiculous. Seems it wasn't long ago there was a news article about a guy who's business credit card limit was reduced without him being informed that the credit company was going to do so.

There is similar legislation in the Senate, so hopefully one or the other is passed in both the Senate and the House and signed into law soon. It would go a long way in helping people climb back out of debt.

reply to post by Jenna

The measure would prohibit so-called double-cycle billing and retroactive rate hikes and would prevent companies from giving credit cards to anyone under 18.

First off, i thought it was already prohibited to give a credit card to someone under the age of 18

Secondly, eliminating a rate hike is not going to help average people climb out of debt any faster than on their own steam.

I'm not a financial expert, so i don't know the exact answers.

But i have pulled myself out of huge debt that accrued between the ages of 18 and 20.

Took a while, but it finally got done.

This is nothing more than pandering to say "we tried" when really they did nothing at all.

Actually....the credit card companies have specially designed programs for "credit for kids". They go off the parents credit rating and co sign.

Arent people already notified of rate changes? I get one every couple of months saying there will be a rate change and if I wish to dispute it to call some number. I've never cared or called because I dont use the thing much and when I do I pay it off a couple hours after using it.

It sounds pointless to me and doesnt look like it will help any of these chronic card users out of the hole they dug themselves.

What is thee to complain about when you read a contract, sign said contract and then use your credit line? It's like making 30K/year and taking out a 300K mortgage or running past the "no diving" sign and slamming your head on the shallow end and later suing the owner of the pool.

Stupid people should not be protected. Even symbolically as this bill is attempting to do.

reply to post by Fremd


I thought it was illegal to give a credit card to someone under 18 as well, but apparently it either wasn't or it was happening anyway.

Eliminating sudden rate hikes will give people the opportunity to cancel the credit card or notice to stop using it before the rate hike goes into effect. The way it is now people have had their rates jacked up sky high for no obvious reason than the credit card company wanted to even if the consumer has paid every payment on time, was never late, and/or paid more than the minimum.

Credit-Card execs defend rate increases

Originally posted by Jenna

I thought it was illegal to give a credit card to someone under 18 as well, but apparently it either wasn't or it was happening anyway.

Eliminating sudden rate hikes will give people the opportunity to cancel the credit card or notice to stop using it before the rate hike goes into effect.

It is not unlawful, however, most states have laws which say that any contract with an unemancipated minor is voidable. Unless a credit-worthy adult co-signs, card issuers deal with minors on the faith that they'll keep the account until they turn 18.

The most important thing Congress could do is to cap interest rates.

There was a time long ago when interest above 18% was considered "usury" and was unlawful.

Bank deregulation eliminated interest rate caps in the hope that market forces would keep issuers competitive with one another and rates low. Instead, issuers took advantage and began counting on fee revenue (over-limit, late payment, account maintenance, et c.) to make up for declining sales revenue.

Today, many creditors biggest source of revenue is the fee income generated by new and changing conditions imposed on the borrower. These one-sided changes also used to be called "adhesion contracts" and were considered 'unconscionable' and unenforceable; but, now creditors can rely upon the "implied consent" of the borrower who continues using the credit. (In school, we were taught that "implied consent" means NO consent! Try substituting the word 'no' for 'implied' when you see it used by TPTB and you will get a revelation!)

Hopefully, this legislation will become more substantive in the Senate and return us to the "good old days" of the '70s when "consumer protection" really meant something.

jw


[edit on 1-5-2009 by jdub297]