Simpson Votes To Ensure Transparency In Credit Card Contracts

Press Release

Congressman Simpson voted today for H.R. 627, the Credit Card Holder's Bill of Rights Act of 2009. H.R. 627 passed the House of Representatives by a vote of 357-70.

"Credit cards have, for better or worse, changed the way American families manage their finances, and today approximately half of the population own credit cards," Simpson said. "I believe that consumers must acquire and use credit cards responsibly, but I am concerned that some credit card companies make doing so difficult by charging hidden fees or changing their rules without much notification."

Specifically H.R. 627 would:

Prohibit certain unfair and deceptive practices by credit card companies. For example, the bill prohibits retroactive rate increases on existing balances and requires creditors to provide written notice of any rate increase at least 45 days before the increase goes into effect.
Prohibit double cycle billing, where an individual is charged interest on the entire balance of the credit card even when he or she pays off a portion of what is due, limits overlimit fees, and bans fees on interest-only balances.

"I've heard from many Idahoans who have been diligent about the way they use credit cards but are caught off-guard by huge interest rate increases or new contract terms. Especially in this economy, families need to have the tools to manage their finances responsibly," Simpson said. "H.R. 627 includes a number of common sense measures that ensure that credit card users have the information they need to do so."

In addition, the bill aims to protect young people from the pitfalls of credit card abuse by prohibiting companies from offering credit cards to minors without their parents or guardians cosigning. It would also require companies to ensure that college students qualify for credit by obtaining a credit and income history before approving credit applications.

"Credit card misuse can overwhelm family finances and leave young adults deeply in debt," Simpson said. "I think it is prudent to put some restrictions on a company's ability to solicit students and young adults with credit card offers."

It is important for consumers to be knowledgeable about their credit card contracts and aware of the fees being charged, and they should question those they believe are unfair or unethical.

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