Washington, D.C. -- The U.S. House of Representatives today approved comprehensive credit card reform in legislation co-sponsored by Rep. Neil Abercrombie. The Credit Cardholders Bill of Rights will level the playing field between credit card companies and consumers.  The bill is aimed at preventing major credit industry abuses while fostering fair competition between card issuers.

“A credit card agreement is supposed to be a contract, but in recent years, cardholders have lost the ability to say no to sudden and unfair increases in the interest rate they’re being charged or the imposition of all kinds of add-on fees,” said Abercrombie.  “Consumers have a right to understand their credit accounts and should be able to control them.”

The balanced measure establishes the following rights for credit cardholders:

• Cardholders will not be subjected to arbitrary interest rate increases.
• Cardholders who pay on time will not be unfairly penalized.
• Cardholders will not be subjected to due date gimmicks.
• Cardholders will be shielded from misleading terms.
• Cardholders may set their own limits on their credit.
• Card companies will apply credits and allocate payments.
• Card companies will not impose excessive fees on cardholders.
• Card companies will not issue subprime credit cards to people who can’t afford them.

“Credit card companies are a vital part of our modern retail economy,” Abercrombie said.  “The goal is that all the details of the contractual relationship are clear and understood by both parties — no surprises; no gimmicks.  The best kind of consumer protection is information.” 

Abercrombie co-sponsored The Credit Cardholders Bill of Rights with Rep. Carolyn Maloney (NY), who chairs the House Financial Services Subcommittee on Financial Institutions and Consumer Credit.  The legislation follows numerous hearings and meetings to determine the best way for Congress, financial regulators and credit card companies to work together to improve both the protections and services for card holders.

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