Finally, our elected leaders are doing something that should help the average consumer, passing new rules on credit cards.
Yesterday, the House Financial Services Committee approved new (although borrowed heavily from previously released Fed Reserve guidelines going into place July 1, 2010) legislation that help counter heavy-handed and unfair credit card company practices.
Some of the benefits, quoting from MarketWatch.com's article:
- Prohibiting rate hikes on existing balances, except in certain circumstances.
- Requiring 45 days notice for interest rate increases and significant contract changes.
- Prohibiting "over-the-limit" fees when cardholders have set their own credit limits.
- Prohibiting "double cycle" billing, a practice in which interest is charged on debt that has already been paid on time.
- Prohibiting fees for payments made over the phone or Internet.
- Prohibiting payments from being applied first to a consumer's lowest interest rate balance.
- Establishing standard definitions for terms such as "fixed rate" and "prime rate."
This is highly dubious.
Already, prior to regulation, credit card companies have CHOSEN to remove credit lines from many customers, and increase interest rates on good credit. I have a credit score over 740 and two of my credit cards saw interest rates shoot up to 19% from 9%.
It is time to get some of these "fine-print" practices removed.