Another Step Forward for Better Credit Card Rules

Our friends at DEMOS are helping to lead the charge to reform how credit card companies get to charge you. And theya re making progress. Yesterday the Senate Banking Committee passed S.414, The Credit Card Accountability, Responsibility and Disclosure Act (“the Credit CARD Act“). Introduced by Senator Christopher Dodd (D-CT), the bill aims to protect consumers from confusing, misleading, and predatory practices by credit card companies. Among its primary provisions, the legislation will:

• Protect consumers from any time, any reason interest rate increases and account changes;
• Prohibit unfair applications of card payments;
• Protect cardholders who pay on time;
• Limit fees and penalties;
• Ensure that cardholders are informed of the terms of their account; and
• Protect young consumers from credit card solicitations.

Thse are all good steps forward. The House passsed a similar bill last congress with bipartisan support, So the prospects look good.

Excessive fees and exceedingly high interest rates end up shackling families in a debiliating debt trap. The recession is making matters worse. Americans are already re-examining their consumption habits and getting reaquainted with savings, but we need our policymakers to set some rules to make sure consumers get access to credit on fair terms. This bill looks like a piece of that puzzle.