Credit Card Bill of Rights passes in House

05.01.09
By Sarah Beldo

On Thursday, U.S. credit cardholders moved one step closer to receiving stronger protection against penalties and fees that many lawmakers describe as unfair.

The House of Representatives passed the Credit Card Bill of Rights by a vote of 357-70, which includes protections such as a ban on double-cycle billing - in which issuers charge interest on balances which have already been paid.

Other provisions include a requirement for issuers to give customers 45 days' notice on interest rate hikes, to send bills 25 days before payment is due and to give cardholders the option to cancel a transaction that would put them over their credit limit and prompt a fee.

"This bill will help level the playing field between the credit card issuers and consumers," said Representative Carolyn Maloney, a New York Democrat who authored the bill. "This bill will ban some of the most outrageous abuses."

Next, the Senate will take on the issue of credit card reform. President Barack Obama has already said he will sign legislation that "upholds the interests of the American people."

Support for stricter limits on credit card company behavior has been building for a while now, with even responsible borrowers hit by seemingly unwarranted penalties such as sudden interest rate hikes.

Even with the full support of the president, it is likely to be a year before new credit card regulations go into effect. In the meantime, consumers are advised to pay close attention to any changes to their account.

"There's not a lot that we can do about it, other than develop relationships with other companies that don't do that," consumer advocate Adam Levin told MainStreet.com.

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The House of Representatives passed the Credit Card Bill of Rights by a vote of 357-70.