It seems that the government bail out has been put into action prematurely. Why would you bail out credit card companies and then allow the company rescued by tax payers to then turn around and create more of a problem for consumers holding credit card debt?
Lawmakers in congress should have passed laws with new protections and regulations for credit card companies prior to giving these companies our tax dollars.
The list of questionable actions credit card companies are engaged in is lengthy and disturbing. The piling on of hidden fees on consumers incurred for telephone payments, balance transfers, replacing lost cards and cash advances: arbitrary interest rate hikes for a variety of reasons; and inadequate time to pay bills, should all have been outlawed before the government agreed to assist these companies.
The following rules, which take effect in July 2010, designed to protect consumers from unscrupulous credit card company practices, should be effective immediately.
- consumers will have to be given 45 days notice before any changes are made to the terms of an account. Under current rules, companies in most cases give 15 days notice before making certain changes
- a payment can not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay
- credit card companies are prohibited from charging interest on penalty fees
- card issuers are required to lower penalty interest rates if no further violations occur after six months
- charging consumers to pay bills via mail or telephone is prohibited
- issuers soliciting anyone under 21 are required to get the signature of the parent or guardian who will co-sign for debt
No wonder consumers are defaulting at high levels on credit card bills. These companies should adopt fair business practices on their own instead of being forced by the governmental laws.
Tags: consumer protection, credit cards, fees, government bailout, interest rates, laws, tax payers
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