We used to think stories about credit card companies erroneously issuing cards to family pets were funny. “Congratulations, Bowser T. Dog, you’ve been pre-approved for a $10,000 platinum rewards card. Start building your credit history today!”
In hindsight of the nation’s credit collapse, though, these scenarios don’t seem so amusing. Instead, they’re indicative of a much more serious problem with the credit card issuers. If they were careless enough to extend credit to any Spot, Duke or Harley, how careless were they with actual people?
Last week, the U.S. House of Representatives passed the legislation dubbed the “Credit Card Bill of Rights,” to finally pass some common sense reforms on the consumer credit industry. The product of their carelessness, after all, became byzantine, arbitrary rules that caught consumers in credit traps.
There is a measure of self-responsibility with credit, obviously. Not every cardholder exercised the right amount of restraint in its use. Yet the cardholders share responsibility, as the purveyors of this product, to act responsibly in recouping their debt, without practices that are best described as usury.
The federal bill is almost angering in its simplicity. Under its terms, credit card companies cannot smack consumers with retroactive penalties, unless the cardholder is more than 30 days overdue on their payments. Forty-five day notices would be required for all rate increases — no more suprises.
It bars “gimmicks” on due dates to ensure consumers get fair treatment. It would allow credit card holders to fix their credit limit. The legislation also does something that seems so obvious: it prevents credit card companies from charging fees to customers who pay their bills on time. It is enraging to think an Act of Congress is actually needed to stop this practice.
One other bill facet to mention: this “bill of rights” would prohibit companies from issuing cards to anyone under age 18, unless they were emancipated. We’re of two minds on this; this market is most vulnerable to the wiles of credit, but prohibition could prevent education on its responsible use.
Then again, this is an industry that would issue cards to eligible canines and felines. Maybe a few restrictions are not such a bad thing, after all.
This legislation now enters the U.S. Senate with our wholehearted endorsement. The perils and practices of the credit card industry have been known for years, yet Congress has elected not to act, almost if waiting for an excuse to exercise its authority.
Well, look around senators. Rationales abound for regulating the credit card industry.
The people — and their pets — will thank you for it.
editorialboard@sunjournal.com
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