Guess what? There are a lot of pro-consumer changes in how the credit card industry will have to treat you if Chris Dodd’s Credit Card Reform bill goes through. Going through the questions you sent in and left as comments, it turns out that a good number of what you’re asking for are in this bill. So then, let’s check out the latest version bill out and see what changes are in store. I know Alex linked to this as a PDF but these are so important I wanted them posted front and center.

THE CREDIT CARD ACCOUNTABILITY RESPONSIBILITY AND DISCLOSURE ACT

PREVENTS UNFAIR INTEREST RATE INCREASES AND TERM CHANGES
•Prohibits arbitrary interest rate increases and universal default on existing balances;
•Requires a credit card issuer who increases a cardholder’s interest rate to periodically review and decrease the rate if indicated by the review;
•Prohibits credit card issuers from increasing rates on a cardholder in the first year after a credit card account is opened;
•Requires promotional rates to last at least 6 months.

PROHIBITS EXORBITANT AND UNNECESSARY FEES
•Prohibits issuers from charging a fee to pay a credit card debt, whether by mail, telephone, or electronic transfer, except for live services to make expedited payments;
•Prohibits issuers from charging over-limit fees unless the cardholder elects to allow the issuer to complete over-limit transactions;
•Requires penalty fees to be reasonable and proportional to the omission or violation;
•Enhances protections against excessive fees on low-credit, high-fee credit cards.

FAIRNESS IN APPLYING AND TIMING CARD PAYMENTS
•Requires payments in excess of the minimum to be applied first to the credit card balance with the highest rate of interest;
•Prohibits issuers from setting early morning deadlines for credit card payments;
•Requires credit card statements to be mailed 21 days before the bill is due rather than the current 14.
Protects the Rights of Financially Responsible Credit Card Users
•Prohibits interest charges on debt paid on time (double-cycle billing ban);
•Prohibits late fees if the card issuer delayed crediting the payment;
•Requires that payment at local branches be credited same-day.

PROVIDES ENHANCED DISCLOSURES OF CARD TERMS AND CONDITIONS
•Requires cardholders to be given 45 days notice of interest rate, fee and finance charge increases;
•Requires issuers to provide disclosures to consumers upon card renewal when the card terms have changed;
•Requires issuers to provide individual consumer account information and to disclose the period of time and total interest it will take to pay off the card balance if only minimum monthly payments are made;
•Requires full disclosure in billing statements of payment due dates and applicable late payment penalties.

INCREASED OVERSIGHT OF CREDIT CARD INDUSTRY
•Requires each credit card issuer to post its credit card agreements on the Internet, and provide those agreements to the Federal Reserve Board to post on its website;
•Requires the Federal Reserve Board to review the consumer credit card market, including the terms of credit card agreements and the practices of credit card issuers and the cost and availability of credit to consumers.

ENSURES ADEQUATE SAFEGUARDS FOR YOUNG PEOPLE
•Requires issuers extending credit to young consumers under the age of 21 to obtain an application that contains: the signature of a parent, guardian, or other individual 21 years or older who will take responsibility for the debt; or proof that the applicant has an independent means of repaying any credit extended;
•Limits prescreened offers of credit to young consumers;
•Prohibits increases in the credit limit on accounts where a parent, legal guardian, spouse or other individual is jointly liable unless the individual who is jointly liable approves the increase in writing.
Enhanced Penalties
•Increases existing penalties for companies that violate the Truth in Lending Act for credit card customers.

GIFT CARD PROTECTIONS
•Protects recipients of gift cards by requiring all gift cards to have at least a five-year life span, and eliminates the practice of declining values and hidden fees for those cards not used within a reasonable period of time.

TRANSPARENT CREDIT CARD PRICING
•Requires the GAO to study the impact of interchange fees on consumers and merchants, specifically their disclosure, pricing, fee and cost structure.

(Photo: yksin)

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