Credit Card Bill of Rights Passes in the House

The "Credit Card Bill of Rights", which is expected to go into effect in 2010, was approved by the House committee today.

Sponsored by Rep. Carolyn Maloney (D-N.Y.) and steered through Congress by Rep. Luis Gutierrez (D-Ill.), Chairman of the Financial Services' Subcommittee on Financial Institutions and Consumer Credit., the legislation will ban retroactive interest rate hikes on existing balances, double-cycle billing, and impose restrictions on late fees.

Other key components of the Bill of Rights include a ban on issuing credit cards to minors under age 18, preventing credit card companies from imposing fees when customers pay their bill, and allowing customers set a lower credit card limit.

Read more at the Chicago Sun-Times.

Obama Attends Credit Card Reform Meeting

Obama's surprise appearance at the credit card reform agenda on the 23rd of April sparked controversy, as his presence signifies major changes in credit card legislation are on the horizon.

There is speculation that Obama will require all lenders to to undergo significant reform, not just TARP recipients. Obama and his administration are specifically focused on what they percieve to be deceptive billing practices that burden consumers with excessive annual fees and interest rates. The President is faced with the challenge of creating legislation that protects consumers, while not imposing rules that make it difficult for banks to issue credit.

Credit Card Companies Charged $19 Billion in Fees in 2008

Credit card companies charged $19 billion in penalty fees in 2008 and are expected to break all records for late fees, over-limit charges, and other penalties in 2009, at more than $20.5 billion.

Credit-card debt in the U.S. has reached a record high --nearly $1 trillion -- and almost 50% of American families currently carry a balance. One-fifth of those carrying credit-card debt pay an interest rate above 20 percent.


Sources: Chicago Sun-Times and Depaulia Online