What Might a Credit Cardholders' Bill of Rights Look Like?
With the national economy hopefully on the road to recovery -- but still on shaky legs -- it's not just newly-pennywise U.S. consumers who are taking a closer look at their credit card situations and trying to set a course out of mountains of credit card debt.
The Federal Reserve has issued new federal regulations on enhanced safeguards against the deceptive practices of credit card companies, which must be in effect by July 2010. A number of lawmakers in the House and Senate have drafted different bills seeking to codify credit card reform and provide new legal protections for credit card holders, including Senators Chris Dodd (D-CT) and Charles Schumer (D-NY), and U.S. House of Representatives member Carolyn B. Maloney (D-NY). And just today, U.S. Treasury Secretary Timothy Geithner voiced his support for enhanced protections for credit card customers.
So if it becomes federal law, what might a credit cardholders' bill of rights provide in terms of legal protections for consumers?
Arbitrary Interest Rate Increases. Credit card companies would be prevented from increasing the standard, non-promotional interest rates on existing credit card account balances -- except in very limited circumstances -- under a number of proposals from members of U.S. Congress. And customers would need to be given plenty of notice (45 days) before any rate increase goes into effect.
"Double Cycle" Billing and Other Back-Door Penalties. Most credit cardholder bill of rights proposals include a provision against "double billing," a practice which allows the bank to charge interest retroactively for purchases and balances over a two-month period. Other penalties, including those that crop up even when a customer pays a balance on time and in full, would also be nixed.
Playing Fast and Loose with Due Dates. Credit card companies would need to mail credit card statements and bills at least 21 days prior to the due date, and customers would be given a extra day's grace period when the due date falls on a Sunday or a banking holiday, under most planned bills.
Let Cardholders Set Credit Limits. Card issuers would be required to let cardholders set their own fixed credit ceilings, and over-the-limit fees would be limited, especially the amount that may be charged per over-the-limit transaction.
No More Credit Cards for Minors. Most proposed cardholders' rights bills would put an end to the practice of issuing credit cards to consumers who are under 18, except in rare cases (such as when a minor is legally emancipated).
- Schumer Introduces 'Credit Card Holders' Bill of Rights' (Senator Charles E. Schumer)
- Credit Cardholders' Bill of Rights: Leveling the Playing Field (Representative Carolyn B. Maloney)
- Wall Street Journal: Treasury Outlines Principles for Credit Card Reform
- Reuters: Banks Expect Final Credit Card Bill Soon
- New Credit Card Protections Approved for Consumers (FindLaw's Common Law)
- Credit Card Debt (provided by George R. Belche)
- Want to Dump Your Credit Card Debt? Make a Budget (FindLaw's Common Law)
- Debt Relief Options (FindLaw)
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.