Congressman Chandler Votes for Credit Cardholders' Bill of Rights

WASHINGTON (May 20, 2009)—Today, Congressman Ben Chandler cast a vote for the people of Kentucky by supporting the Credit Cardholder’s Bill of Rights, legislation ending many of the unfair, often predatory, practices of credit card companies. Chandler was an original co-sponsor of the bill.

“This is commonsense,” Chandler said. “Central Kentuckians are hard-working people who play by the rules. This is a win for them. They deserve to be treated fairly, and protecting financially responsible people has to be a part of any plan to help rebuild our economy.”

The legislation will end some of the unfair practices of the credit card industry that drive many Americans deeper into debt.  Under the bill, many retroactive interest rate hikes on existing balances would be banned, due-date gimmicks would be reduced, fees will be cut, “double-cycle billing” would be barred, and people under 21 who are financially dependent would be further protected.

Detailed changes would include:

·         Fees:  Credit cardholders will not be able to exceed a credit limit and incur fees unless they agree to pay an over-the-limit fee beforehand.

·         Interest Rates: Notification of interest rate increases must be sent in writing 45 days prior, and rates cannot be increased on existing balances unless the account is 60 days overdue. If a consumer is late on a payment with another, unrelated creditor, card issuers cannot raise interest rates on their account, eliminating “universal default.”

·         Payments: Bills must be sent at least 21 days before they are due. For separate balances with different interest rates, any additional payment over the minimum must be applied to the balance with the highest rate first. Fees will not be charged for paying the bill over the phone as opposed to mail.

·         Gift Cards: No charges can be accrued for lack of activity on these cards for at least one year, and they cannot expire for at least five years.

·         Youth: People under 21 years of age must prove they have an independent income or have a parent, guardian, or spouse as the primary account holder.

President Obama is expected to sign this legislation into law in the coming days. 

“For too long the consumer has taken a backseat to corporate profits, greed, and predatory credit card practices,” Chandler said. “After all these bailouts, it is about time we do something that directly benefits the people of Central Kentucky.”