Maloney introduced comparable credit card legislation last year, which passed in the House but died in the Senate. The climate has changed significantly since then, however, with the economy ailing and Democrats in control of Congress and the White House.
Meanwhile, the American Bankers Association, which represents many of the nation’s credit card issuers, argues that the new rules and any potential congressional action threaten to limit credit availability and could lead to increased costs for cardholders. But they also applaud the disclosure requirement, calling it “a dramatic improvement over the existing legalistic disclosures.”
But consumer advocates say that less credit availability might not be a bad thing.
“If the only way that credit card companies can give credit is to use unfair and deceptive practices, then the credit shouldn’t be given out,” says Bowne of Consumers Union.
As things stand now, though, it’s up to consumers to be on “red alert,” according to Linda Sherry, director of national priorities for Consumer Action, a nonprofit advocacy group. She recommends paying your bills well before the due date and ensuring that your balance remains significantly lower than your credit limit to keep your credit score strong.
“Look at a credit card as a privilege, not a right,” Sherry says. She also encourages consumers to check their bills each month to make sure that their credit limit and interest rate have not changed.
Michelle Diament is a freelance writer based in Memphis, Tenn.