Bankruptcy

Senate Bans Sudden Credit Card Interest Raises

By Editor

Score one for the little guy. The U.S. Senate voted overwhelmingly, 90-5, to add regulations to the credit card industry, and the move could save consumers lots of money.

A few differences must be worked out with a similar bill passed in the House, but President Obama said he hopes to sign the law by Memorial Day, and it could take effect as early as this year.

Until the specifics come out, we know that, at the very least, this bill will:

• Make it more difficult for credit card companies to suddently raise the rates of all consumers
• Make it more difficult for the credit card companies to issue fees and other charges to all consumers

This means that consumers struggling to keep up with their credit bills will get some breathing room in the form of lower rates and fewer charges. From the Washington Post’s coverage:

“This is landmark legislation that is going to make the credit card marketplace more transparent and more fair for millions of consumers,” said Travis B. Plunkett, legislative director for the Consumer Federation of American. “In particular, it’s going to prevent credit card companies from suddenly and unjustly increasing interest rates.”

We’ll keep you posted as more details about the final bill emerge.

Full post as published by The Bankruptcy Blog on May 19, 2009 (boomark / email).