Washington, D.C.--With Congressman Eliot Engel voting yes, the House Thursday passed the Credit Cardholders Bill of Rights to help protect the American consumer from arbitrary interest rate hikes and outlandish fees charged by credit card companies.

Specifically, the bill protects cardholders against arbitrary interest rate increases, empowers them to set limits on their credit and requires card companies to fairly credit and allocate payments. It also prohibits charging fees just to pay a bill by phone, charging over-the-limit fees unless a consumer opts-in in advance or issuing credits cards to minors.

The bill, which passed the House Thursday by a vote of 357 to 70, now goes to the Senate.

Rep. Engel said, “Some credit card companies have been excessively greedy in their interest rates and the excessive fees they charge. This legislation will halt these egregious practices and help to level the playing field for the consumer.”

The bill also requires card companies to give 45 days notice of all interest rate increases or significant contract changes (e.g. fees).

Further, the bill would end unfair “double cycle” billing – card companies couldn’t charge interest on debt consumers have already paid on time. Also, if a cardholder pays on time and in full, credit card companies may not pile additional fees on balances consisting solely of left-over interest. It also prevents the card companies from charging a fee when customers pay their bill.

Rep. Engel praised the passage of the legislation, saying, “When so many American families are struggling to make ends meet, consumers who play by the rules deserve to be treated fairly by their credit card companies – that’s what the Credit Cardholders’ Bill of Rights is all about, fairness.

“The Credit Cardholders’ Bill of Rights gives Americans the information and rights they need to make decisions about their financial lives.”

The congressman said he hoped the Senate would promptly pass this important legislation.