Families Deserves
Statement
Families Deserves
This week I met with people and credit counselors in Oakland County to hear about their experiences with credit card companies and discuss the "Credit Cardholders' Bill of Rights" currently under consideration in Congress. After speaking with local residents, I am more convinced than ever that families need greater rights when it comes to their financial circumstances.
In 2008, credit-card issuers imposed nearly $20 billion in late fees, over-limit charges, and other penaltiesmany of which were applied arbitrarily to consumers paying their balances on time. The local residents and credit counselors I met with this week had no shortage of stories of egregious credit card company practices. For example, one elderly woman saw her interest rate raised from 6% to 44% without notice, despite the fact that she did not miss any payments.
One of the reasons families have such high debt levels is that credit card companies are engaged in unfair practices like this. It's time families have rights. The common sense reforms in the Credit Cardholders' Bill of Rights will protect people from unfair practices and help keep families from incurring a mountain of debt they don't deserve.
I sponsored an amendment to this bill to require that consumers' payments be applied to the portion of their balance with the highest interest rate first. Currently, a credit card company can require a consumer to pay off debt with the lowest interest rate, forcing people to maintain balances with high interest rates in order to keep families in debt longer. This egregious practice must end now.
The Credit Card Holders' Bill of Rights will also ban most retroactive interest rate hikes on existing balances, protect cardholders from due date gimmicks, require 45 days advanced notice for rate hikes, require companies to let consumers set their own fixed credit limit and end "double cycle billing" so that companies cannot charge interest on debt consumers have already paid on time.
The Senate has been debating the Credit Cardholders' Bill of Rights throughout the week, and I am hopeful they will pass it next week without delay. Families should not have to wait any longer to have basic rights and control over their own financial destiny.
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