Credit Cardholders' Bill of Rights: Some Important Facts

The Credit Cardholders’ Bill of Rights was passed by the House of Representatives on September 23, 2008. The bill was introduced on February 7, 2008 and reported by the committee on July 31, 2008. The bill was passed by a huge margin. The voting result was 312-112 since 84 Republicans and 228 Democrats voted for it in the House that is dominated by the Democrats. One Democrat and 111 Republicans voted against it. The sponsor and author of the bill is Rep. Carolyn Maloney (New York - Democrat) and according to her, it is an all-inclusive and restructured credit card statute. She is also the Consumer Credit and House Financial Institutions Subcommittee Chairwoman. Barney Frank, House Financial Services Committee Chairman and 40 other representatives are the actual co-sponsors of the bill.

This bill has been planned to save the consumers from unfair lending practices of the credit card companies and to create a level playing field between the consumers and credit card providers.

The principal objective of the Credit Cardholders’ Bill of Rights (HR 5244) is to modify the Truth in Lending Act to ascertain justified and dependable practices associated with the lending of credit under a charge account consumer credit or revolving consumer credit plan and for other uses.

Features of the Credit Cardholders’ Bill of Rights

Following are the essential features of the Credit Cardholders’ Bill of Rights:

• This saves credit cardholders from random interest rate hikes
• This bill protects cardholders making timely payments from being wrongly fined
• This protects cardholders from deceptive or ambiguous terms and conditions and spoiling their credit scores
• This saves cardholders from due date tricks
• Authorizes cardholders to fix limits on their credit cards
• Necessitates credit card companies for reasonable allocation of consumer payments
• Bars credit card companies from levying too much fees on cardholders
• Necessitates Congress to offer improved supervision of the credit card industry
• Stops credit card companies from offering subprime credit cards to individuals who are not able to afford them      
• Incorporates no fee structures, no rate caps or price controls
• Forbids card providers from intentionally offering credit cards to individuals below 18 years of age