New credit card laws

To the Editor:

There are few pieces of mail any of us dread more than a letter from our credit card company. For too long, credit card companies have had all the power and have hidden behind obscure legalese to hike interest rates without warning or reason.

Yet, recently, many of us actually received a good news letter thanks to the Credit Card Bill of Rights, which I helped pass last year, which takes effect on February 22. This legislation addresses many of the most egregious violations of credit card companies, with such fixes as:

• No interest rate increases during the first 12 months of opening a credit card.

• Credit card issuers must give a 45-day advanced notice before increasing your interest rate.

• No fees to make your credit card payment online, by mail, or over the phone.

• Billing statements must be sent 21 days before the due date.

• Payments are on time when received the next business day after a holiday or weekend.

• Payments are due on the same date each month.

For any parent of a college-age student who has walked through a student union and witnessed credit card representatives hovering like vultures, help is on the way. The legislation requires that credit card companies extending credit to consumers under the age of 21 obtain the signature of an individual 21 years or older who will take responsibility for the debt or prove that the applicant has an independent means of repaying any credit extended. It also increases protections for students against inducements to obtain a credit card, and increases transparency of arrangements between credit card companies and universities.

Additionally, effective as of August 22, this legislation will also provide significant new consumer protections for gift cards. It will eliminate the practices of hidden fees and declining values for gift cards within 12 months of purchase or activity. The bill also requires that gift cards have at least a five-year life span.

Ultimately, responsibility is a two-way street, but this new legislation should help level the playing field to the side of consumers. One of the services my office provides is helping consumers resolve issues with credit card companies. If I can be of service or if you have any questions about the Credit Card Bill of Rights, please contact my office at 696-6500.


Member of Congress