The Credit Cardholders’ Bill of Rightsby Tim Manni
Dubbed as House Bill 5244, the Credit Cardholders’ Bill of Rights, has been hashed out by federal law makers over the past year in order to clean up what its sponsors call “unfair” practices by credit card companies that critics says keep cardholders in debt. Consumers, public interest groups, and federal regulators recently testified before the House Subcommittee regarding a variety of concerns.
The “Bill of Rights” aims to corral such practices as unannounced rate increases, unannounced changes in due dates, universal default – in which a non-payment to another creditor increases the card’s interest rate – and two-cycle billing, in which interest is charged to the previous month’s balance even if the bill has been paid off.
Last year Citigroup discontinued its “universal default” policy, and Chase eliminated “two-cycle billing.” Credit card companies have reformed their policies for fear that Congress would legislate a policy that would make credit cards more expensive and harder to get.
Retailers are joining the fight against card companies, pushing for a bill that would renegotiate the fee they pay when consumers use credit purchases.