Possible Vote in House This Week on Credit Card Reform

April 28, 2009, Written By Lynn Oldshue

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).

Experts encourage those whose rates have increased, whose credit limit has dropped, or whose account has been closed with no explanation or fault of their own to contact their representative about this bill. The goal of this bill is to eliminate punitive practices like rate increases ‘for any time and any reason.’ Reiterating to your representatives how these practices are affecting all cardholders could help show that the proposed changes are needed, experts say.

The Cardholder’s Bill of Rights includes these provisions:

* 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 costly to pay off the debt with the highest rate.

Expert analysis suggests that the two reforms most pressing 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. As a result, consumers would save money on interest payments and thus pay off 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.


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The information contained within this article was accurate as of April 28, 2009. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.