Like millions of Americans I have had a credit card. I noticed once you had money charged to one of these things, sometimes even if you paid over the minimum balance all the time, you just never seemed to get it all paid off. I have since paid off my credit cards and decided I don’t want another.
However, today President Obama announced that he expects changes to how these companies do business to protect American consumers in a time of recession:
President Barack Obama said Thursday he is determined to get a credit-card law that eliminates the tricky fine print, sudden rate increases and late fees that give millions of consumers headaches.
“I trust that those in the industry who want to act responsibly will engage with us in a constructive fashion, and that we’re going to get this done in short order,” Obama said, delivering a pointed message to leading executives of credit-card issuing companies after a closed-door White House meeting.
The good news is it appears as if both houses of Congress is on board to make the billing of consumers more fair:
Both the House and the Senate are pursuing bills to give consumers greater protections as an expansion of new rules slated to take effect next year. Obama said his economic advisers will examine the various proposals and work with Congress and the industry, but he made clear he wants to sign a bill into law.
Obama has set out his goals for any legislation to meet to be signed into law:
So Obama outlined the principles for any legislation: Protections so that consumers won’t face sudden, surprising jumps in fees; requirements that companies publish their forms in plainspoken language, with no more fine print; the availability of customer-friendly comparison shopping on credit-card offers; and greater enforcement so that violators feel the full weight of the law.
It seems to me these principles are pretty reasonable. It seems as if the President is just asking these companies to behave honestly and ethically in reasonably billing their consumers.
While credit cards are one important source of funding for millions of Americans:
The president also acknowledged the importance of credit cards; almost 80 percent of U.S. households have one.
Credit cards often serve as a vital source of liquidity, both for individuals and small businesses.
In recent years it has become a huge burden and source of endless debt:
Credit-card debt has increased by 25 percent in the past 10 years, reaching $963 billion by January, according to figures released by the White House. The average outstanding credit card debt for households that have a credit card was $10,679 at the end of 2008, according to CreditCard.com, an online marketplace designed to link consumers and card issuers.
I am glad that President Obama and Congress are tackling unscrupulous lenders. However, I believe that any kind of reform in the credit card industry must include more responsibility by the consumer but must ultimately begin with more reasonable fees and terms.
Maybe then I can charge it again.