Credit Card Holders Bill of Rights - Too Risky?

In the midst of all the financial turmoil, the Wall Street Journal published an editorial warning that if the Credit Card Holders Bill of Rights becomes law, the cost of credit will go up, and the availability of credit will go down. Their position is that lenders will have to tighten lending standards to make up for costly bad loans.

I beg to differ, and I said so in my reply on their forum. Judging by the replies from other consumers, there are many who also find their arguments against this legislation a bit out of touch.

In case you've missed our previous posts on this topic, you can learn the details of this legislation here.

The Credit Cardholders’ Bill of Rights basics:

• Protects cardholders against arbitrary interest rate increases
• Prevents cardholders who pay on time from being unfairly penalized
• Protects cardholders from due date gimmicks
• Shields cardholders from misleading terms
• Empowers cardholders to set limits on their credit
• Requires card companies to fairly credit and allocate payments
• Prohibits card companies from imposing excessive fees on cardholders
• Prevents card companies from giving subprime credit cards to people who can’t afford them
• Requires Congress to provide better oversight of the credit card industry
• Contains NO rate caps, fee setting, or price controls

What do you think? Feel free to share your views here or on the Wall Street Journal's opinion forum.

Comments

[Credit-Help]

While in the short run lenders may experience a need to recoup some cost due to the new legislation, this cost will almost certainly pass within a few months.

Ultimately they will save money as their risks go down and consumers are better able to manage their credit risks. Healthy consumers means a healthy credit market where they can continue to lend money year after year.

[Gerri]

I like that...healthy consumers mean a healthy credit market. Thanks for your input!