Vision Credit Education, Inc.

A bill cosponsored by New York Representative Carolyn Maloney and House Financial Services Chairman Barney Frank seeks to end perceived abuses in the credit card industry. This “Credit Card Bill of Rights Act” is geared toward ending many types of interest rate hikes that cardholders face for a variety of reasons.

Specifically, this proposed legislation would make it harder for credit card issuers to justify raising rates for cardholders by prohibiting the following occurrences:

• Charging late fees to cardholders even though payments were mailed 7 days prior to the due date
• Applying payments to lower interest balances before higher interest balances on a single account
• Applying retroactive interest rate increases to balances incurred under a lower rate
• Bait-and-switch interest rate increases and excessive fees for any or no reason
• Charging interest on balances already paid off

It would be hard for members of Congress to oppose such a bill if they vote on behalf of their financially distressed constituency. However, Congress has historically been influenced by the deep pockets of credit card companies and their lobbyists.

For their credit, most major credit card companies have voluntarily made adjustments to their policies in order to restore more consumer-friendly practices. Many industry analysts rightfully claim that credit card issuers only preempted members of Congress in an attempt to prove they can regulate themselves. This was seen as an attempt to avoid further regulation.