Credit Card Bill of Rights Introduced

"American families are being crushed by credit card debt, and the increasingly predatory behavior of some credit card companies makes no sense beyond increasing the bottom-line for the companies," said U.S. Senator Robert Mendendez (D-NJ) who has introduced a 'Credit Card Bill of Rights' aimed at stopping "some of the most egregious credit card practices while also ensuring that future generations have the information they need to make financial decisions."

There are two pieces of legislation included in the Menendez "Credit Card Bill of Rights:" the Protection of Young Consumers Act and the Credit Card Reform Act.

The Protection of Young Consumers Act is geared toward protecting college students and other young people, against skyrocketing consumer debt and the barrage of credit card solicitations that lead to it. It will:

1. Stop credit card solicitations aimed at those under age 21 unless they "opt-in"
2. Establish a financial literacy and education program in elementary and secondary schools to help prepare young people to be financially responsible consumers.

The Credit Card Reform Act will protect consumers against excessive fees and interest rates. It will:

1. Prohibit "universal defaults" in which a credit card company imposes excessive increases in interest rates for events completely unrelated to the payment history on that account
2. Restrict excessive late fees
3. Tighten regulations on credit card companies to ensure that they are not offering credit to high-risk cardholders without verifying their ability to pay.

Some consumer advocacy groups are cheering, but as bankruptcy "reform" legislation illustrated last year, reining in the credit card industry is not an easy task. If you support Credit Card Reform legislation, contact your Senators.