Last Updated May 19, 2009 6:58 PM EDT
"This thing is flying through," said Travis Plunkett, legislative director of Consumer Federation of America. "President Obama has said he wants a bill on his desk before Memorial Day, and it looks like he's going to get it."
The U.S. Senate just passed the Credit Cardholder's Bill of Rights by an overwhelming margin--90 to 5 this week. The House already passed a similar bill, which shoots this proposed law off to a conference committee to nip and tuck the areas where the legislation doesn't conform. Plunkett said the bills are so similar that the legislature might skip conference and just pass the Senate's legislation, which is a touch more consumer-friendly than the current House bill. The speed and breadth of the bill are particularly striking since credit card reform looked about as remote as Kilimanjaro only a few years ago.
What does that mean to you? Less credit, but fewer gotcha's. This bill will:
- stop retroactive interest hikes. If you built up a balance when your card charged 9.9 percent, you get to pay off that balance at a 9.9 percent, unless you become delinquent on your debt.
- ban a practice of raising your rate because of a credit slip-up with another lender.
- demand some economic justification for penalty fees.
- bar 'cradle cards'--selling plastic to jobless kids under the age of 21
- stop abusive billing practices, including charging interest on an already-paid balance
- demand that bills are sent enough before the due date that you have sufficient notice to pay on time