In 2008, credit-card issuers imposed $19 billion in penalty fees on families with credit cards–exploiting loopholes in the law to make profits at the expense of responsible credit cardholders with minimal oversight. In May, the House passed, and the President signed, the Credit Cardholders’ Bill of Rights applying common-sense regulations that ban unfair rate increases and forbid abusive fees and penalties.
The first set of consumer protections go into effect today–requiring 45 days advance notice of all interest rate and fee hikes and statements be mailed 21 days in advance of payment due dates. These reforms, combined with remaining provisions set to take effect in February, will protect 91 million households from excessive fees, unfair interest rate hikes, and arbitrary agreements that credit card companies revise at will.
The Credit Cardholders' Bill of Rights will help to put an end to the unfair and abusive practices of the credit card industry once and for all. These common-sense reforms represent critical steps toward reinforcing our economic foundation and restoring the principles of fairness, responsibility and accountability to our economy.
With this landmark legislation, deceptive contracts and incomprehensible agreements will become a thing of the past. Consumers will get the protections they need to build up their credit history and make educated decisions about their financial future. Credit card companies will be held accountable, and Americans who pay their bills and play by the rules will get a fair shot at financial success.
The Credit Cardholders' Bill of Rights moves us one step closer to an American financial system that works for all Americans.