Ever heard of Carolyn Maloney? Me neither, but if you own a credit card, you owe her a pat on the back.

Just over a month ago, Ms. Maloney introduced the Credit Cardholders’ Bill of Rights Act of 2008 (H.R. 5244). According to her website, the bill (assuming it passes!) will:

-Protect cardholders against arbitrary interest rate increases
-Prevent cardholders who pay on time from being unfairly penalized
-Protect cardholders from due date gimmicks
-Shield cardholders from misleading terms
-Empower cardholders to set limits on their credit
-Require card companies to fairly credit and allocate payments
-Prohibit card companies from imposing excessive fees on cardholders
-Prevent card companies from giving subprime credit cards to people who can’t afford them
-Require Congress to provide better oversight of the credit card industry

Sounds good in theory, but to me it sounded a little wishy-washy on the details. Lots of broad promises, but nothing concrete. Luckily, a more in-depth summary of the bills provisions is accessible here (careful, its a PDF!).

Among the most interesting (and long over-due) proscriptions of the bill are:

  • A total ban on Universal Defaults. Universal Default is when you incur penalties on one card due to late payments on another card, even if with it’s with an entirely different issuer!
  • An ability to freeze your interest rates indefinitely. If you’re unhappy with an interest rate hike, you have the option to cancel your card within 3 billing cycles of that increase and pay off your balance at the existing rates and repayment schedule.
  • An end of over-the-limit fees. Well, not totally - cardholders now have the right to have a fixed credit limit that can’t be exceeded. At present, credit card issuers allow you to exceed your limit and then slap you with an over-the-limit fees of up to $50.
  • No more lowest-interest-first repayments. Making your repayments go to your debts that are costing you the least in interest charges means the banks can get the absolute most they can out of you.

You can check out the full bill here.

Whether the bill will pass or not is another story. Although the bill has both been endorsed by Clinton and Obama in one form or another, the finance industry has biiiig pockets.

We’ll keep you posted.