In The US, Credit Card Companies Have Come Under Fire From Both Republicans And Democrats

Category: Finance, Credit.

Credit card companies, who stand accused of rip off practices, are facing mounting pressure from politicians all around the globe.

The backdrop to this unfolding drama is toughening economic conditions for consumers who are now facing rising food, energy and mortgage bills, and are looking for help from their elected representatives. No matter where you go, be it the US, credit card companies, UK or Australia are experiencing a backlash from politicos, angry at the way consumers have been treated. The list of offences committed by credit card companies, in the eyes of legislators and the public, include lending to people who cannot afford to repay, charging excessive interest rates, and alleged extortionate, dodgy billing practices penalty charges. The latest initiative to help protect consumers has come from former Democratic presidential contender Chris Dodd, who launched the CARD act- The Credit Card Accountability, Responsibility and Disclosure Act. In the US, credit card companies have come under fire from both Republicans and Democrats. Senator Dodd wants greater regulation and supervision of the credit card industry to tackle sharp card practices by lenders. The CARD Act looks for credit card companies to apply payments to the card with the highest interest rate first to help consumers clear their debts faster.

He has also called for and end to any time, any reason interest rate hikes, where interest rates rise on multiple cards if one of a consumer s cards goes into default. It also wants double cycle billing scrapped- where interest is effectively charged on balances already cleared. Senator Dodd said his reforms were aimed at preventing some credit card companies dragging Americans deeper in to debt, and ending practices that, harm, he argues, rather than help, American families. If the CARD Act becomes law, it would see an end to card companies charging interest on penalty charges, such as late payment fees. He added: "Americans do not deserve to be pushed down the economic ladder by credit card companies. She said: "Credit card industry abuses have become more pronounced in this troubled economy as more families turn to their credit cards to help pay the bills, buy groceries and make ends meet.

It s wrong, it s unfair and it must end. " Another American politician backing the CARD Act is Republican Congresswoman Carolyn Maloney, who in early 2008 launched a campaign for a Credit Cardholder s Bill of Rights in the states. It s clear that America s credit cardholders need- and deserve- relief now. " She also expressed concern that many American cardholders would be buried under mountains of inescapable debt, while waiting for help from the Fed. On the far side of the Pacific, Australian credit card companies have come under fire for being too free and easy with their lending. In the UK, credit card firms were forced to curb late payment penalty charges, which saw many cardholders facing fees of up to �35 for missing payment deadlines. Linda Burney, New South Wales Fair Trading Minister, recently said: "The ease of access to credit cards, the ready availability of increased credit limits, and lack of rigour applied by lenders to assess a person s ability to repay is leading to an ever increasing number of people being caught in a cycle of debt. "

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