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The Credit Cardholders Bill of Rights is a big deal. It is a measure that Barack Obama has been behind since he began running and it is the first real legislative attempt to protect consumers from credit card company abuses.

The bill:

  • Eliminates the ability of creditors to increase your interest rate if you’re late on other payments (”universal default”);
  • Prevents creditors from changing most credit card terms before contract renewal;
  • Requires advance notice of credit card account rate increases;
  • If card terms change or interest rates increase, it allows the card to be canceled (without any penalties or fees) and allows the payment of any balance at the old terms;
  • Prohibits interest if the bill is paid in full on time, prohibiting “double cycle billing”;
  • Prohibits credit reports regarding a new card until the card has been activated;
  • Allows you to opt out of over limit transactions if fees are impose

I suppose what is really interesting about this bill is that you don’t currently have any of these rights and creditors get to do to you what they want.

The Bush administration stripped consumers of rights and access to bankruptcy. Maybe the next administration of either McCain or Obama will do more work to return rights to consumers to defend them against lending abuses.

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Steve

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