Senate Passes Bill That Prohibits Abusive Credit Card Practices
The Senate passed a bill (90-5) yesterday that will help curb credit card abuses that have unfairly harmed millions of borrowers.
The Credit Card Accountability Responsibility and Disclosure Act will forbid credit card companies from unfairly raising interest rates and imposing unnecessary hidden charges and penalty fees on borrowers. It will also limit credit card companies’ ability to issue cards to consumers younger than 21, who may not be able to repay debt.
Credit card debt has tripled in the last 20 years, hitting low- and middle-income families hardest. Many of these families use credit cards to deal with losses in income or unexpected expenses, like car or home repairs. A 2005 Center for Responsible Lending study found that 70 percent of these families also use credit cards for basic living expenses, like rent, groceries and utility bills.