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Credit Card Bill of Rights

Just when the average American consumer has decided and perhaps even reluctantly accepted fees, charges and rate increases from his credit card company, the government has stepped up to the plate and is drawing the proverbial line in the sand with American credit card companies and banks. Currently, both the House and the Senate are considering a bill that was voted on in the Senate Banking Committee in early April.

Although it appears to be beneficial to consumers, there are a few points one should consider as its put into perspective. Several of the country's largest and most vocal industry groups have voiced strong arguments against the passage of this bill. According to groups such as the American Bankers Association, this passage will ultimately create a vicious cycle with consumers being the ones paying the price. The bill is designed to protect consumers from unfair interest rate charges and high fees for everything from speaking to a live representative to ever-increasing late fees. The passage of this bill has many believing the credit card companies will offset the losses by tightening their approval guidelines to the point many won't qualify for a new card. Further, there are ways to raise other fees that haven't been outlined in the current bill. This of course affects current and loyal customers who will now be forced to offset the loss of profits their credit card companies will be facing.

Still, the benefits of this passage are long overdue and welcomed by the collective American consumers. Generally, grace periods will be extended, late fees will be closely regulated and there will be no more retroactive interest rate increases. Gift cards won't be so restrictive for those who receive them and if there are expiration dates at all, most won't expire for at least sixty months. Companies will be closely monitored as they entice college students and even those pesky charges for going over your credit limit will be greatly reduced and potentially will be based on how much over the limit one goes. Charges for overspending by four or five dollars won't be assessed the same fees as say, one hundred dollars.

Is this the cure-all many have waited for? That remains to be seen; it is, however, a definitive step in the right direction as we seek to turn the economy around and hold accountable those who seem to be unfairly gaining their profits. This bill is expected to pass, albeit narrowly.

April 7, 2009

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