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September 23, 2008
Credit Cardholders’ Bill of Rights Passes House
Today the U.S. House of Representatives passed HR 5244, the Credit Cardholders’
Bill of Rights Act of 2008. The legislation aims to "provide crucial protections against
unfair credit card practices" according to its supporters.
These protections include:Requiring credit card issuers to give 45 days notice before interest rate hikes can take
Allowing lenders to raise interest rates on current balances only if
minimum payments are late by more than 30 days.
Requiring credit card companies to mail bills at least 25 days before the due date
instead of the current minimum 14 days.
Bars credit card companies from charging interest on already repaid debt, known as
Stops the practice of applying customer payments to lower interest rate debt first.
Requires all credit card companies to accept any payments as being "on time" that are
received by 5:00 pm EST on the due date.
Forbids issuing credit cards to those under 18 years old with the exception of
The Federal Reserve and other regulating agencies proposed a package of many of the same
rules in May. They hope to finalize their plan before the end of the year.
The bills opponents believe Congress is interfering with these federal agencies ability
to regulate the credit card industry.
On Monday the White House, which opposes the legislation, released at statement saying,
"Regulations are better suited to addressing these problems than legislation because
they can be adapted more readily to changes in market conditions". The statement went
on to say that the bill would likely result in "less access to credit and in higher
interest rates for consumers".
The Senate has yet to vote on the bill.
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