WASHINGTON (February 22, 2008) – Congressman Ben Chandler has joined his colleagues in the House of Representatives in cosponsoring legislation to protect credit cardholders from the unfair business practices of many credit card companies. H.R. 5244, the Credit Cardholders’ Bill of Rights Act of 2008, would help restore the balance between consumers and the credit card industry.

“Credit card policies are complex and often confusing to the customer, leading many of us to be unpleasantly surprised when interest rates suddenly skyrocket or new fees are charged seemingly out of the blue,” said Congressman Chandler.

Last month, the Federal Reserve reported that the amount of consumer credit debt in November 2007 was over 7% higher than the same time in 2006. The increase in credit card borrowing corresponds with a weakened economy and higher levels of unemployment. Compounding the hardships that a slowing economy has on consumers, USA Today recently pointed out that the credit card industry is expected to collect $19 billion in penalty fees this year, a 79% increase since 2003.

Introduced on February 7, 2008, H.R. 5244 would require credit card companies to notify consumers 45 days in advance before raising interest rates and would give consumers the option of canceling their credit cards and paying off the balance at the existing interest rate. Additionally, the legislation would require that credit card issuers bill consumers 25 days before payments are due in order to give consumers adequate time to pay their balances and avoid late fees. The bill would also prohibit credit card issuers from raising a cardholder’s interest rate as a result of payments that are not related to the cardholder's account—for example, a late payment on a phone bill.

“At a time when consumers, and particularly students and low-income individuals, are increasingly vulnerable to abusive credit card practices, we must do all we can to increase consumer protection against these unfair tactics,” said Chandler. “This legislation is an important step forward in eliminating the worst credit card practices that cost Americans billions of dollars every year.”

Introduced by Rep. Carolyn Maloney (D-NY), this bill is the result of numerous studies and meetings over the past year involving credit card issuers, regulators and consumer groups. Hearings on the bill are scheduled to begin next month.

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