A bill currently before Congress, the Credit Cardholders’ Bill of Rights Act, would, among other things, prevent card companies from unfairly increasing interest rates on existing card balances. Retroactive increases would be permitted only if a cardholder is more than 30 days late, if a pre-agreed promotional rate expires, or if the rate adjusts as part of a variable rate. It would require card companies to give 45 days notice of all interest rate increases so consumers can pay off their balances and shop for a better deal.
Also, it is important that credit card companies allow consumers to set hard credit limits and stop excessive “over-the-limit” fees. The bill requires companies to let consumers set their own fixed credit limit. It also prevents companies from charging “over-the-limit” fees when a cardholder has set a limit or when a preauthorized credit “hold” pushes a consumer over their limit. It limits to three the number of over-the-limit fees companies can charge for the same transaction; some issuers currently charge virtually unlimited fees for a single limit violation.
The bill was just introduced in the 111th Congress by Rep. Carolyn Maloney (D-NY) with the backing of House Financial Services Committee Chair Rep. Barney Frank (D-MA). Passage would help American families who are currently mired in a record-high amount of debt and ought to have credit cards that orient them toward the most beneficial choices.
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