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With growing reports that credit card companies are gouging their customers before new rules take effect, the House of Representatives has approved legislation to speed up the effective date of portions of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (known as the CARD Act), which otherwise would not go into effect until February or August of 2010.
The Consumers Union gives a good breakdown of the law. Here is what the law is about in a nutshell:
As you can tell, the CARD Act sets up a number of protections for you as a consumer. As a result, credit card companies have been scrambling to add last minute interest rate and penalty fee hikes before the new credit card reform takes effect.
However, the House passed a bill to ensure that consumers are protected from these last ditch attempts to milk consumers. They passed a bill this past Wednesday in order to move up the CARD Act's effective date from Feb and Aug 2010 to Dec. 2009.
CNN quotes a statement released by bill co-sponsor Rep. Carolyn Maloney (Dem-NY) as saying: "Just in time for the holidays, Congress can lock in a ban on interest rate hikes on existing balances, and the tricks that have kept far too many consumers trapped in a never-ending cycle of debt."
She continues by saying that credit card companies "brought this on themselves" by taking advantage of the time between when the credit card reform reform act was signed and when it would go into effect by pushing through even more rate and fee hikes.
"This marks a step forward in bringing consumers badly-needed relief," Maloney said in the statement.
While the House has voted 331-92 on this issue, it still must pass in the Senate. Stay posted on whether the Senate will OK the rush on this legislation.