While the credit card reform is in the horizon, some members of the congress want to speed it up. Currently the new reform is schedule for the end of the February of 2010.
Illinois Republican congressman Louis Gutierrez says that while we can't turn back the clock, we can make sure that the new credit card rules reach to the public sooner than scheduled. The implementation date of the Credit Card Holder Bill Of Rights must be sped up to accelerate it.
Speaking to the media, he told about his own experience with the credit card companies. After the signing ceremony in the White House Gutierrez went home and found a letter from his credit card company notifying him about changes in his interest rate and the available credit. This obviously made the congressman very upset and he asked the reporters "what changed." He said what changed in one day from the signing ceremony and between going home and getting that mail from a credit card company.
Many credit card companies have been slashing credit limits, rising interest rates and increasing fees. How fair is this? We, the public just gave so much money to these greedy bank companies to save them. But look at the reward they are giving to the public. This is just not right.
No wonder there is the growing desire among some congressmen to accelerate the February 20th deadline when the Credit Card Holder Bill of Right will take effect.
According to the Pew Safe Credit Card Project researched the advertised rates of credit cards have jumped nearly 20 percent between December of 2008 and July of 2009. In December the interest rates on credit cards were about 9.99 percent. In July, the Pew research shows, they reached to 11.99 percent.
Now the congressmen want the new rules to take effect starting December 1st of 2009. I think this will be great, provided it's before the Christmas shopping season. In fact, I am not one of those people who advocates shopping, but rather the real meaning of the festivity. Yet, credit card debt increases and the spending goes up during the holiday shopping season.
The new credit card rules will limit the interest rate increases on existing balances. This is a very good way to help the consumer and not fair to increase the rate. It's like changing the rules in the middle of the road. Another good point in the new upcoming rules is that the payments will go to the balances with higher interest rates first. This is important when you have a balance with different interest rates. Paying off the highest interest rated balance is key for consolidating your credit card debt.
Yet, another major point is that there will be no more universal default. Here is why this is very important. Currently when you default on one bank, all other credit card issuers can raise your interest rate. Now, that will not be allowed. The end of the universal bank default is coming here.
The new deadline of the Credit Card Holder Bill Of Rights moving to December 1st is also good for those who apply for credit cards. Experts say the applications are high in January and February. As more people will apply for new credit cards, the new rules taking effect in December may help many new consumers.
Written by Armen Hareyan
HULIQ publisher
Materials from CNN report are used in this news.
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