Credit Card Bill of Rights - A Reality

Finally, something akin to a credit card bill of rights is moving through congress.

You can read the above article, but the basic gist of the plan is that it (much like my previous post on fat/calorie disclosure) allows for better disclosure of interest rate changes so that consumers can make more informed decisions. It attempts to stop the practice of credit card companies manipulating the system by sending out their statements with just a couple weeks or so before the due date (thereby practically forcing late payments). Finally, and most importantly, it would ban most retroactive interest rate hikes which is perhaps the single biggest way in which credit card companies 'stick it to' consumers. Person A may be deemed to be a slight credit risk at time A, and therefore receive an relatively low interest rate. But, credit card companies can for ANY REASON raise your interest rate - which is not in debate since they should be able to have rate flexibility - but the problem is they raise the interest rate and apply to purchases already made - ie, purchases you made when you were supposedly deemed low risk. That is of course bilking millions out of American's checkbooks in a most unfair and devious way.

Now, will this legislation perhaps make credit card comapanies raise rates or fees in general? Maybe, maybe not to any big degree. But frankly, I'd rather the costs of regulation be spread out over everyone in an equitable manner than put to just a handful of people who most often don't deserve the increased cost.

I mentioned in a post a couple months back about how Capital One raised my rate (without me knowing - they claimed they sent notice but who opens those things when you get 20 in a week!) from 7.9% to 11% all the way to around 20% in the span of a couple months (the first increase due to market conditions, the second because I supposedly missed 2 payments by a handful of days). I'm hardly a credit risk, but many credit card companies' systems/equations that determine these rates are outdated or geared toward bilking consumers, which is why we need good legislation.

Obama also has a similar plan only his is perhaps even more stringent.