Commentary: Credit card bills of rights is a must

This editorial appeared in The Rock Hill Herald.

Consumers bear considerable responsibility for recklessly running up credit card debt in recent years. But credit card issuers also bear some of the blame for abusive interest and fee policies, and for relentlessly hawking credit cards to consumers who couldn't afford them.

President Barack Obama is pressing the Senate to pass a Credit Cardholders' Bill of Rights before Memorial Day. The bill, which would make it harder for credit card companies to charge exorbitant interest rates and late fees, won easy approval in the House last week with a vote of 357-70.

Obama acknowledges that people shouldn't take on debt they can't handle and that banks have a right to insist on timely payments. But at a time when taxpayers are bailing out banks and banks are borrowing money at record low rates, credit card users deserve a break as well.

The banks also played a big role in the high rate of bad credit card debt. For years, they have marketed credit cards to anyone and everyone, including young people. It is estimated that half of all college students have four or more credit cards.

Credit card debt has increased to nearly $1 trillion, and, with the ongoing recession, some project that 20 percent of that could be bad debt. While a sour economy and credit card abuse are partially responsible, banks also exacerbated the problem by using devious billing practices.

Among other things, the bill passed by the House would require 45 days notice for a rate increases; require banks to mail bills at least 21 days in advance instead of just 14; bar extra fees for customers who pay by telephone or electronically; and ban interest rate increases on existing balances unless a customer is more than 30 days late. If regular payments resume, banks would be required to restore the lower rates.

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