According to an article in the Star-Telegram, new credit card legislation is making its way through the Senate. The bill, if passed would include measures that protect credit card holders from some rate hikes and require special treatment of credit card holders under 21 years of age.
The article said:
The latest proposal would prohibit lenders from increasing interest rates on past purchases unless the cardholder has fallen at least 60 days behind. At the same time, lenders would be required to review a cardholder's terms every six months.
Also, if the debtor pays on time for six months they may be able to regain the lower interest rate. This could be particularly helpful for debtors who fall behind on their bills because of a job loss, divorce or other life changing event. Once they are able to stabilize (i.e. find a new job, finalize divorce etc.) they can begin repaying in a timely manner and repairing the relationship with the lender. The Senate bill would require that promotional rates last at least six months. It also prohibits rate increases in the first year after an account is opened.
Other provisions in the bill would:
- Require anyone under 21 to prove that debt can be repaid before a card is issued, or have a parent or guardian promise to pay off the debt if the cardholder defaults.
- Require lenders to give customers 45 days' notice before increasing rates and mail their bills 21 days before the balance is due.
- Ban fees if customers want to pay their bills by phone or online.
- Prohibit over-the-limit fees unless a cardholder elects to be allowed to go over their limit.
- Require lenders to say how much time it would take and how much money in interest would be paid if only the minimum monthly payments are made.
- Require that gift cards remain valid for five years.
The special measures for those under 21 years old is way overdue. So many college-aged people accumulate tremendous amounts of debt before they graduate. Credit card companies have, in the past, given out credit cards to these young people without any substantial proof that they can repay the debt. More often than not, these young people have no resources to repay credit card debt and end up struggling just to make the minimum payment. This can put a tremendous amount of pressure on a young person who is just starting out in life. Fortunately, for those who have already accrued large amounts of credit card debt, bankruptcy is available to discharge those debts and give them a fresh financial start. If you are struggling with a substantial amount of credit card debt contact a Dallas-Fort Worth bankruptcy attorney to find out how you can discharge your credit card debt in bankruptcy.