Credit Card Protection Provision May Be Moved Up

The much ballyhooed credit card protection legislation that was signed into law by Pres. Barack Obama last May is being revisited by Congress due to the actions of the credit card issuers.

United States Representatives Barney Frank and Carolyn Maloney are scheduled to have hearings on the bill next week. Simply put, they want some of the provisions that are not set to go into effect until February 22, 2010 to be moved up and go into effect on December 1, 2009.

Basically what we have seen, and how can anyone possibly be surprised that this happened, is credit card issuers proactively moving to raise interest rates on account holders that carry balances from month to month.

Their ability to raise rates will be greatly curtailed when the new provisions to go into effect. They have also aggressively slashed cardholders credit limits and in some cases are now charging annual fees.

The consumer protection provisions will clearly not allow this to happen in the future. Credit card companies must strictly adhere to the terms that are spelled out in the terms and conditions of the credit card offer when it was issued and cannot deviate from it whenever they wish as they have in the past.

Credit card issuers argue that raising rates, instituting fees and slashing credit limits are necessary due to the record number of charge-offs that the industry has faced because of the poor economy.

Related Information:

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