Credit Card Holder' Bill Of Rights Heads To Obama's Desk With Peters' Amendment

Press Release

The U.S. House of Representatives today gave final approval to the Credit Cardholders' Bill of Rights, legislation to protect consumers from hidden fees, arbitrary rate changes and other egregious practices. The bill now heads to the president's desk. Congressman Gary Peters, a member of the Financial Services Committee, sponsored a key amendment to the bill as it passed through his committee. Peters' amendment would 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 all other debt before money can be allocated to the principle with the highest interest rates.

"In my 22 years working in the financial sector, the most basic advice I would have for any family was to pay off their debt with the highest interest rates first," said Rep. Peters. "But credit card companies were forcing people to do just the opposite. My amendment simply says that a consumer has the right to pay off the principal with the highest interest first."
Congressman Gary Peters met with local residents and credit counselors last week to highlight the need for the Credit Cardholders' Bill of Rights. In 2008, credit-card issuers imposed nearly $20 billion in late fees, over-limit charges, and other penalties—many of which were applied arbitrarily to consumers paying their balances on time. Meeting participants spoke to Congressman Peters about problems they have had with credit card companies treating them unfairly (e.g., one woman saw her rate raised from 6% to 44% without notice even though she never missed a payment). Contact information and characterization of remarks for event participants is below. All have said they are willing to speak with media.
"One of the reasons families have such high debt levels is that credit card companies are engaged in unfair practices. It's time families have rights," said Rep. Peters. "For too long, credit card companies have engaged in practices that saddle families with undeserved debt. The common sense reforms in this bill will simply require that card companies are upfront with cardholders about fees and interest rates."

The Credit Card Holders' Bill of Rights will (see below for a full fact sheet):

Prohibit card companies from raising interest rates on existing balances unless payment is 60 days late. If a cardholder pays on time for the following six months, the company is required to restore the original rate;

Require 45 days advanced notice for rate hikes;

End "double cycle billing," so that companies cannot charge interest on debt consumers have already paid on time;

Protect cardholders from due date gimmicks such as making payment due on the morning of the stated due date;

Strengthen protections for small businesses.

Source