Possible Vote in House This Week on Credit Card Reform
If you have a complaint about an action taken by your credit card issuer, now is the time to contact your state's representatives to let them know you support the Credit Cardholders' Bill of Rights.
It is predicted that the House of Representatives could vote on the Cardholders' Bill of Rights as early as Thursday. If they do, then debate will begin tomorrow (Wednesday).
"If you have received a rate increase, a drop in your credit limit, or a closed credit card account with no explanation or fault of your own, contact your Representative and let them know about it. In this bill, they are trying to eliminate punitive practices like rate increases 'for any time and any reason'," Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. "Your representatives need to know these practices are affecting all cardholders and that the proposed changes are needed."
Here are some of the provisions in the Cardholders' Bill of Rights:
* Prevents card issuers from unfairly increasing rates on existing balances. Retroactive increases are allowed only if a cardholder is more than 30 days late, it is a pre-arranged promotional rate, or it adjusts as part of a variable rate.
* Requires issuers to let customers set their own fixed credit limit.
* Requires issuers to give 45 days notice of interest rate increases so consumers can pay off the balance or shop for a better deal.
* Puts limits on "over-the-limit" fees.
* Ends "double-cycle" billing.
* Requires payments to be allocated proportionally to balances that have different rates. It will ban the practice of applying the total payment to the lowest rate first, which makes it very costly to pay off the debt with the highest rate.
"These are good reforms, but the two that will really make a difference to cardholders are eliminating the practices of rate increases 'at any time, for any reason' and applying payments to all rates, instead of just the lowest rate. These are going to save consumers money on interest payments and allow them to pay off their debt faster."
The House is expected to pass the Cardholders' Bill of Rights. It passed in the House last year, but it failed in the Senate. If the bill passes in the Senate, it has a provision for swift implementation so that the Cardholders' Bill of Rights could be implemented three months after President Obama signs the legislation into law.
It is predicted that the House of Representatives could vote on the Cardholders' Bill of Rights as early as Thursday. If they do, then debate will begin tomorrow (Wednesday).
"If you have received a rate increase, a drop in your credit limit, or a closed credit card account with no explanation or fault of your own, contact your Representative and let them know about it. In this bill, they are trying to eliminate punitive practices like rate increases 'for any time and any reason'," Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. "Your representatives need to know these practices are affecting all cardholders and that the proposed changes are needed."
Here are some of the provisions in the Cardholders' Bill of Rights:
* Prevents card issuers from unfairly increasing rates on existing balances. Retroactive increases are allowed only if a cardholder is more than 30 days late, it is a pre-arranged promotional rate, or it adjusts as part of a variable rate.
* Requires issuers to let customers set their own fixed credit limit.
* Requires issuers to give 45 days notice of interest rate increases so consumers can pay off the balance or shop for a better deal.
* Puts limits on "over-the-limit" fees.
* Ends "double-cycle" billing.
* Requires payments to be allocated proportionally to balances that have different rates. It will ban the practice of applying the total payment to the lowest rate first, which makes it very costly to pay off the debt with the highest rate.
"These are good reforms, but the two that will really make a difference to cardholders are eliminating the practices of rate increases 'at any time, for any reason' and applying payments to all rates, instead of just the lowest rate. These are going to save consumers money on interest payments and allow them to pay off their debt faster."
The House is expected to pass the Cardholders' Bill of Rights. It passed in the House last year, but it failed in the Senate. If the bill passes in the Senate, it has a provision for swift implementation so that the Cardholders' Bill of Rights could be implemented three months after President Obama signs the legislation into law.
