Some important credit card legislation is currently working its way through both chambers of Congress. Two competing and similar bills, one in the House of Representatives and one in the Senate, are being negotiated and could eventually make their way to President Obama to sign. Additionally, the Federal Reserve Bank has issued changes in credit card practices which will become effective - regardless of what happens to the House and Senate bills - in July of 2010.It is hoped that the changes will help those with credit cards better manage their overall credit and personal finance without being subjected to excessive and unnecessary fees.
What's on the House's Credit Card Legislation?
Here are some things being considered for the house bill:
- Prevention of rate and fee hikes based on consumer debt separate from credit card (see "universal default")
- Prevention of interest rate hikes based on balances paid off from previous billing cycles
- Ban of marketing and issuing of credit card to people under 18 years of age
- Ban of fees charged for phone payments or any other kind of electronic transfer
What's on the Senate's Credit Card Legislation?
- Prevention of rate and fee hikes based on consumer debt separate from credit card
- Prevention of interest rate hikes based on balances paid off from previous billing cycles
- Prevention of rate and fee hikes based on general credit risk
- Ban of marketing and issuing of credit cards to people under 21 years of age, unless parent or guardian approve the acquisition of the credit card
- Ban of fees charged for phone payments or any other kind of electronic transfer, as well as fax, mail or wire
- Ban of interest charged on fees by company
- Ban of retailers and other issuers of store gift cards from charging "dormancy fees" to recipients of gift cards who wait too long to use them
New Federal Credit Card Rules in July of 2010
In addition to the bills being considered in both houses for the protection of consumers, there are also new Federal rules set to take effect on July, 2010. These rules have already been decided upon and are independent of the current credit card legislation being debated.
- Prevention of rate and fee hikes based on consumer debt separate from credit card
- Prevention of interest rate hikes based on balances paid off from previous billing cycles
Do you think these new policies will help those who are struggling with credit card debt? Will you benefit from these new credit card rules?
