House Passes Pro-Consumer Credit Card Legislation

Congress has been considering a number of different pieces of legislation that are designed to improve the state of the credit card industry for the benefit of credit card users and consumers in general. Earlier today the House passed one such piece of legislation which offers several different benefits to credit card holders. The bill will now need to be reviewed by the Senate which may or may not pass the bill but is unlikely to actually make a final decision on the issue until sometime next year. This means that the passing of the bill by the House today is a good step forward in the direction of a better credit card industry for consumers but it’s far from guaranteed to make changes of this kind anytime soon.

The bill that was just passed by Congress is called the Credit Cardholders’ Bill of Rights Act and some are calling it the most progressive legislation ever designed to curb the predatory lending practices of credit card companies. The ultimate goal of this legislation is to make the credit card industry more fair for consumers so that consumers don’t get bogged under by the massive amounts of debt that many of us are facing today. This legislation involves making a variety of different changes to the credit card industry based on the laws that are in place which govern this section of commerce.

One of the major changes that this new piece of legislation does is that it makes it so that credit card companies can no longer be able to increase interest rates retroactively on the balances that already exist on a credit card. In other words, if you owe $10000 on a credit card at a 9% interest rate and the credit card company increases your interest rate to 15%, the balance of $10000 would be required to still be charged only at the 9% rate. This is a really important change because it means that you can’t be punished on old balances that were accrued prior to changes in the terms of your credit card and therefore makes it likely that you’ll have fewer problems with debt.

Although the issue of retroactive interest is one of the most important parts of the bill, it is not the only thing that the legislation makes changes to. There will be a variety of other changes implemented if this bill is eventually passed by the full Congress. These changes are all related to reducing fees and limiting the amount of punishable interest that can be charged by credit card companies. An example is that a customer who mails payment to the credit card company at least one full week in advance of the due date will not be allowed to be charged any sort of late fee even if the payment doesn’t arrive or get processed by the due date. Another example is that credit card companies will no longer be allowed to make customers pay off their lowest interest rate debts first. All of these changes help to reduce overall debt for credit card consumers.