The plan would allow consumers more time to pay their monthly bill. It would prevent companies from applying interest-rate increases retroactively to pre-existing balances. And it would ban “double cycle billing,” a practice that computes finance charges based on previous billing cycles.
U.S. consumers were saddled with $850 billion in credit card debt as of the end of last year, according to the Consumer Federation of America.
“It’s a good first step in addressing a number of abusive practices,” said Travis Plunkett, legislative director at the consumer federation. “However, it will still be necessary for Congress to step in because the proposal only deals with a few of the problems that have been identified.”
At the same time, legislators could have quite a fight on their hands. Previous efforts trying to reform the industry have largely failed, while recent legislative proposals have found little support among GOP lawmakers.
The credit card companies pay politicians a great deal of money. That is the reason sensible regulation has failed. Now those fighting for sensible regulation have to have such an obvious case that even those taking huge amounts of money from the credit card companies can’t stymie sensible rules. Remember to follow our credit card tips to avoid the pitfalls that catch so many – that don’t read our blog 🙂