Obama proposes Credit Card ‘bill of rights’
Barrack Obama has outlined a Credit Card bill of rights that he says will protect consumers. On page 5 of the White Paper that accompanied his speech in Janesville, he mentions the components of the bill:
- Ban Unilateral Changes: Currently, credit card companies can unilaterally change the terms of a credit card agreement at any time for any reason with only a 15-day notice to the consumer. Barack Obama will ban these unilateral changes in credit card agreements unless companies have obtained written consent from consumers and have followed the rules and terms of the agreement.
- Apply Interest Rate Increases Only to Future Debt: Credit card companies often apply increased interest rates to both new debt incurred by the cardholder, as well as previously incurred debt. Barack Obama will require increased interest rates to apply only to future credit card debt, and not to debt incurred prior to the increase.
- Prohibit Interest on Fees: Credit card companies often charge interest on transaction fees, such as late fees or paying a bill by telephone. Barack Obama will prohibit credit card issuers from charging interest on transaction fees.
- Prohibit “Universal Defaults”: “Universal defaults” are a practice in which a credit card company raises an individual’s interest rate based on failure to pay a different creditor on time. Barack Obama will prohibit this practice.
- Require Prompt and Fair Crediting of Cardholder Payments: Barack Obama will require credit card issuers to apply payments first to the credit card balance with the highest rate of interest and to minimize finance charges.
Whether you like Obama or not, these are all reforms that Credit Card issuers should have been forced to make years ago. One can only hope that, whoever wins the election, these changes are adopted as quickly as possible, though one has to wonder whether certain candidats might have a conflict of interest.
It’s about time. The banks are all in favor of no restrictions on them, lots of restrictions on us. This would go a long way towards leveling the playing field and restoring citizens’ equity in our system.
[…] Your Card writes about the new credit card “bill of rights” proposed by Barrack […]
Just wanted you people out there not to get an Advanta card. They raised my interest rate to 30 percent without consulting me. They stated they sent out a letter, but I doubt it.
Nevertheless, I paid them off with my 401k money because I didn’t have the money to pay them off. But it is better to use that money than to pay 30% interest. That card would have never been paid off. I would pay more in interest than the penalty and taxes on my 401k.
They are rude and nasty also…they will not budge. So I paid them off. What I really wanted to do was claim bankruptcy so they wouldn’t get a dime out of me….but?
Please read this post so important!!!!!!!!!!!!!!!!!!!!!!!!!!!