Credit card holders could get relief this year
In December, I wrote about the new credit card rules adopted by the Federal Reserve to stop excessive fees and unexpected interest rate hikes. The big disappointment with these new rues was that they didn't take affect until 2010. Congress isn't happy with that delay and bills are now under consideration to speed up the process of implementing these new credit card rules. The Credit Cardholder's Bill of Rights was passed in 2008 in the House of Representatives, but was stalled by Republicans in the Senate. It's now been reintroduced in the new Congress by bill author Rep. Carolyn Maloney (D-NY) in the House of Representatives and by Senators Charles Schumer (D-NY) and Mark Udall (D-CO) in the Senate. With a greater percentage of the Senate being Democratic, the bill has a much better chance of passage. If the bill passes, credit card companies would have only 90 days to comply.
"Eliminating some of the unfair practices and rate increases of credit cards would be a nice bailout for taxpayers, and could be better than a stimulus check for some families," says Bill Hardekopf, CEO of Lowcards.com. He expects President Obama to sign the bill because he recommended many of these same changes during his presidential campaign.Here's a summary of the key provisions of the Credit Cardholder's Bill of Rights:
* Prevents arbitrary interest rate increases. Issuers would have to give cardholders 45 days notice of any rate increase. Currently, the issuer can change the terms of your card with a short 15-day notice.
* Prevents issuers from retroactively increasing the interest rates on the existing balances of a cardholder unless the cardholder is more than 30 days late.
* Prohibits double-cycle billing and limits issuers from assessing fees on the remaining interest-only balance of a cardholder who has paid his bill on time.
* Provides more time to make your payment. Gives cardholders time to pay their bills by mailing statements 25 calendar days before the due date. It will also prohibit issuers from charging a late fee if cardholder can present proof of mailing payment within seven days of due date.
* Prevents credit scores from dropping because of pre-approved credit cards. Cardholders who are pre-approved for a card have the right to reject it up until the moment they activate it without having their credit adversely
impacted.
* Prevents issuers from using the monthly payment to pay off the lowest interest rate first. Issuers should fairly credit and allocate payments at different rates.
* Prevents issuers from imposing excessive fees on cardholders. The proposed reforms would cap the number of "over-the-limit" fees card companies are allowed to charge to three. Some issuers currently charge an unlimited
number of fees when consumers exceed their credit limit.
These changes are needed now and the sooner the bill is passed the better it will be for the consumer. The Federal Reserve caved in to the interests of the credit card companies. Congress needs to respond by protecting consumers from excessive fees and interest rate charges faster, especially is this time of credit crisis. Banks have gotten their bailout. it's time for the consumers to get their fair share.
Lita Epstein is the author of more than 25 books including the "Complete Idiot's Guide to Improving Your Credit Score."
Reader Comments (Page 1 of 4)
1-23-2009 @ 12:25PM
naomi said...
Since many of us have already been negatively impacted by the arbitrary credit card rate increases, etc. even those with good credit, timely payments, more than minimum payments; how about a rollback of credit card interest rates to 2007 levels? That way, those banks accepting the bailouts from the taxpayers can pass some of that on to those of us trying to pay off our debts instead of defaulting.
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1-23-2009 @ 12:28PM
Lita Epstein said...
Naomi,
That's a good idea. You and anyone else interested should contact the bill's author, Rep. Carolyn Maloney. Here's a press release on the bill:
http://maloney.house.gov/index.php?option=content&task=view&id=1569&Itemid=61
Lita
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1-23-2009 @ 1:26PM
Ron Schuler said...
The credit card relief bill sounds great ,but why the delay.
The card companies have a whole year to stick it to us.
I just received notice from Discover my rate is going from 12%
to 19%.We have never missed a payment,when we called to
ask why the guy says we have toomuch debt to income. I have never defaulted on any loan or purchase in 50 years,my credit
score is over 700!! Looks like our "reps" have once again have
given big business a great chance to stick it to us littleguys.
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1-23-2009 @ 7:30PM
Spartanfan said...
If you pay your balance in full, by the due-date, you pay ZERO interest...
1-23-2009 @ 9:30PM
OldSchool said...
Why don't don't people only spend what they can afford and not run up balances on credit cards? Guess I should stop living within my means and wait for someone else to bail me out.
1-30-2009 @ 1:05AM
Terri said...
The same thing happened to me. Received notice our interest rate was going sky high. I called and asked why??? The girl said instantly because of our credit rating. I told her I needed specific's??? I haven't been late or over my credit limit. She put me on hold about three times. Her only answer then was if I didn't agree to it I could close the account. I then asked her if Wells Fargo received a Bailout ??? She said oh no but we aquired Wacovia or something like that. I said oh wonderful Wells Fargo is out there buying other lending institutions and we have to pay for it with unreal interest rates, Just like that.
I will be paying this off ASAP but of course you can't close the account because then it will lower your credit score.
Just getting really fed up. I've made payments on time, never over limit and pay more than the minimum.
I am learning alot and I now know exactly what I have to do. I am paying off any balances.
1-23-2009 @ 4:29PM
JEFFRO said...
WANT RELIEF FROM THE CARDS JUST MAX THEM OUT THEN GO BANKRUPT ON THEM THAT'S THE ONLY BAILOUT YOU'LL GET
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1-23-2009 @ 6:33PM
Joey said...
Another bunch of griping...I think Credit Card companies should be able to charge whatever they want...Quit whining for the govenment to "bail" you out...if you don't have the CASH money for something DON'T buy it...Credit Cards are good for emergencies...but coffe from Starbucks...meals from a restaurant...and piles of CRAP from Wal-Mart aren't emergencies...It's called PERSONAL RESPONSIBILITY...it's time we all got some!!!!!
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1-23-2009 @ 6:20PM
KAROL said...
You don't know what you are talking about, I guess you don't need to have credit cards, but some people do who don't have the cash just to survive and buy food. Credit cards are not just used for whatever, some people have to survive on them in order to live an ordinary life...
1-23-2009 @ 6:50PM
Deb said...
I agree with you Joey that should charge YOU 100% for what ever you buy.
1-23-2009 @ 6:34PM
john said...
The possibility of people defaulting was long used as an excuse by credit card companies to justify their outrageous intereest rates. The Republican Congress then came to the rescue of the credit card companies by tightening the bankrupcy laws, yet even after the bankrupcy laws were tightened the credit card companies kept their rates outrageously high. Those Republicans can always be relied upon to shaft the average Joe.
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1-23-2009 @ 6:34PM
NORMA said...
Why the delay most of us need the relief now not later. Most C.C. charge a very high fee even if u pay more one them every month. They have been doing this for years and years. I for one try not to use them except for emg.
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1-23-2009 @ 6:34PM
J. Skinner said...
These companies had a field day under the Bush administration under the guise of getting folks to pay off their bills early at a time when so many now trapped where losing jobs and earning less. I'll never understand how they were allowed to use that universal default; be late on a utility bill and all of the sudden they could put you in credit card hell. And, they made a lot of money while doing that and that angers me more, because I think they are at fault for many of the problems we now have. Eventually you keep bleeding folks dry and they aren't able pay anything; but even worse, those thinking their credit was fine are now getting increased interest notice as they have to make up for those that can longer pay at all. They created a vicious cycle and then had to nerve to take it even further pleading for taxpayer bailouts. They want bailout money they need to accept the newly proposed restrictions immediately and I can think of a few more they could add to that list.
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1-23-2009 @ 6:34PM
Elaine said...
With the prime interest rate at zero why are they raising rates.? I don't feel sorry for any credit card company. I use to get about 3 offers a day before I found a phone number on the bottom of an offer and called and I never got another one.
I hope congress does do something about this
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1-23-2009 @ 6:34PM
a said...
This is just Credit card Predatory lending !
congress should charge the banks 60% interest on the public money and hold them to the same terms that they hold consumers to. if the banks pay late nail them ,,,then all of a sudden congress should ding them for increased interest in 15 days or less.Lets make them live by the same process that they expect consumers to abide by.lets hobble the banks and corporation to the same rules and games they play on the consumers.If they dont live by the needs of the people Then REVOKE THEIR BANKING CHARTERS AND CORPORATE CHARTERS ! our constitution was not for corporations and banks to do they will againist the people it was for the rights and liberties of the individual .
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1-23-2009 @ 6:34PM
karl said...
BUSH AND HIS PARTY BEEN REWARDING CREDIT COMPAMYS SPECIALLY WHEN THEY CHANGE BANK RUPT LAWS,NOT ONLY DID HE BANKRUPT USA, BUT AS WELL OTHER COUNTYS,POOR AGAIST THE RICH, YES HE AND HIS PARTY WELL BE REMEMBERED FOR A LONG LONG TIME,AND STILL PRAY THEY END UP IN JAIL FOR THERE CRIMES AGAIST THE PEOPLE
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1-24-2009 @ 12:03PM
BillyBob said...
You really don't have a clue as to what you just said. You just repeated political pundit talking points without proof. What you just said isn't true, but I don't have the time to educate you. You should learn who really put the USA in the hole, it would surprise you.
1-24-2009 @ 5:40AM
MyKisa said...
he obvious answer if to keep your own money...Fair Tax.Org
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1-23-2009 @ 6:35PM
steve said...
RJH FD i just heard the same thing on fox news white males need not apply WE NEED TO WAKE UP AMERICA I applied for a small business loan and i have good credit BB&T BANK TOLD ME NO yet if you go on their website they have special LOANS FOR ILLEGAL MEXICANS AND AFRICANS what the heck is going on in america
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1-23-2009 @ 6:35PM
Sue said...
Credit Card Companies, are making it very difficult for us to keep making our payments. I have seen payments go up from 200.00 per month to over $500.00, per month, just because they raised our interest rates, to astronimical levels. Good credit, no late payments.. now this. I am seriously thinking of not paying another credit card bill. Come and get me... you guys are down right thieves. The American people cannot afford this. Banks are not helping they are tearing the stitches out, and you know what they WILL bleed to death.. Cause no consumer if going to pay that kind of interest, and payment.
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