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July 8, 2009

Credit Card Terms Likely To Change Against Cardholders As New Bill Approaches Activation

Last May, President Barack Obama signed into law the credit card bill. The credit card bill introduces several regulations that aim to help credit card holders get fairer treatment from their credit card companies. The bill contains regulations that will stop the arbitrary raising of interests and fees, minimize the offering of credit to high risk consumers such as those below 18 and force credit card companies to have clearer and more easily understood languages on their credit card agreements and bills.

Credit Card Terms Likely To Change Against Cardholders As New Bill Approaches Activation Many of these changes would certainly help in reinvigorating the finances of many an American consumer. Unfortunately, the bill will not become active until February of next year. In the meantime, credit card companies are doing their utmost to change their credit card terms in an effort to earn as much as they can now and to prepare for the credit card bill when it becomes active.

Right now, many credit card companies are raising interest rates to very high levels. They are also increasing their fees for most credit card transactions such as balance transfers and cash withdrawals. This is because, when the credit card bill becomes active, credit card companies won’t be able to raise their interest rates and fees just as easily. Because credit card companies also see that credit is going to be harder to secure next year with the bill in place, they are also cutting available credit right now. Thus, many credit card holders are finding that they have less and less credit available in their credit cards.

The effect of these drastic steps among consumers is quite devastating. Many credit card holders are already having a hard time paying off their debts. With the increasing interest rates and fees, many are finding it more and more difficult to continue paying their bills off. It is not hard to see that the number of delinquencies and charge-offs may soon rise. With their available credits cut off, card holders are also finding that they have lost what little financial leeway they had to maneuver. More and more credit card holders now find themselves in a high risk of going bankrupt.

Credit card companies are also not reserving these drastic steps for their less than stellar borrowers. Credit card holders with high credit scores are getting hit just as bad. What’s more, what the credit card companies are doing are also having a large negative effect on most credit card holders’ credit scores.

While a lot of people are thinking that the activation of the credit card bill will save them from credit card problems, the credit card industry is now making sure that that is not the case. Credit will become more expensive by then and only time will tell if that is a good or bad thing.

June 24, 2009

Credit Industry Fees Over Credit Card Bill May Be Unfounded

The credit card industry has been quite loud in expressing their fears over the negative effects that the passage of the credit card bill will bring. While consumers are hailing the credit card bill as their long awaited relief from oppressive credit industry practices, the credit industry insists that the bill stifle credit availability for consumers instead.

Credit Industry Fees Over Credit Card Bill May Be Unfounded Last week, President Barack Obama presented his plans for establishing a separate agency to monitor and safeguard the rights of consumers. The agency will be called the Consumer Financial Protection Agency and, among other things, it will be in charge of implementing the rules and guidelines of the credit card bill. This has increased concern among the credit industry even more.

The credit card bill basically aims to limit the ability of credit card companies to issue fees, such as those issued to credit cardholders who go over their credit limits, and interest rate increases, such as those experienced by credit cardholders who miss a payment. Cardholders are naturally all for the credit card bill. However, credit industry advocates have been strongly campaigning that the credit card bill will actually bring more ill than help for consumers. According to them, the credit card bill will instead dry up available credit, especially for risky borrowers. They are also saying that, by cutting off the income generated from the fees issued to delinquent borrowers, the credit card bill will essentially force credit card companies to stop offering rewards programs, greatly limit available credit and credit limits and issue annual fees for all their customers.

While the warnings of credit industry advocates seem worrying, some experts are disagreeing. A few are citing the situation of credit unions as a perfect example of how legislation like those in the credit card bill can actually help both the consumers and the creditors. While major credit industry players are worried over the credit card bill, most credit union operations are already similar to what the credit card bill insists on.

According to a recent study, credit unions are not as likely to charge high fees and interest rates as major credit companies. They also have a lower annual fee and grace periods that last longer than what other creditors offer. However, these credit unions are still able to make a profit. Some may argue that credit unions are different from other credit companies but, on the whole, these companies actually share many similarities. For one thing, they are competing in the same market.

The example being given by credit unions show that the credit card bill can work. There might be some sacrifices but, on the whole, the bill will make the credit industry much more balanced between creditors and credit cardholders.

June 13, 2009

Probable Credit Card Bill Side Effects Could Add More Burden To Cardholders

Judging by the clamor for the credit card bill and the general jubilation among credit cardholders and their supporters when President Barack Obama signed it this May, it could not have come at a more timely fashion.

Probable Credit Card Bill Side Effects Could Add More Burden To Cardholders The credit card bill is a very important and much needed piece of legislation for credit cardholders. Already burdened with the economic recession and the employment crisis, credit cardholders were staggering under the weight of rising interest rates and fees that credit card companies, themselves trying to stem the tide of the bad economy, were giving out every month. Unfortunately, while the bill has already become law, credit cardholders will still have to hold out for a few more months before it actually becomes active. In the meantime, credit companies are doing everything they can to cover their expected losses due to the bill.

The credit card bill provides many changes in the credit industry which is supposed to benefit credit cardholders. These include more transparency for credit card company practices, a tighter hold on the capability of credit companies to raise interest rates and fees and more control on who can and cannot be offered credit cards. Legislators expect the bill to bring a lot of benefits to cardholders. However, industry watchers see some negative side effects when the credit card bill becomes active.

Obviously, credit card companies are going to lose a lot of profits when the bill goes active. They will be seeking out ways to make up for those lost profits. The bill does not set a cap for interest rates or banking fees and provides no price control. This may be one way where credit card companies could make up for their losses. Cardholders can expect a higher starting interest rate and higher banking fees. Annual fees are going to be much more common for credit cards as well.

Credit cardholders who keep up with their bills, while they seem to be good customers, actually do not generate enough profits for credit card companies. As a result, many perks that they’ve been enjoying such as reward programs and more attractive interest rate offers will probably be ended. They won’t be exempt from high initial interest rates and fees either and they will probably be burdened with annual fees too, if they are not already.

While credit card companies will lose their capability to arbitrarily raise interest rates, they will still be able to raise it as long as they provide notifications according to the requirements of the credit card bill.

To avoid difficulties in the future, credit cardholders should do their best right now to pay off their debts, keep their debt balances low and use their rewards points as well.

June 8, 2009

What Good Credit Actually Means When The Credit Card Bill Goes Live

Consumers heaved a sigh of relief when, last May, President Barack Obama signed into law the credit card bill which was fast tracked through Congress and released also this May. Consumers are seeing the credit card bill as a great equalizer which will give them better control over their credit and curtail the unfair and abusive practices of credit card companies.

What Good Credit Actually Means When The Credit Card Bill Goes Live However, credit industry insiders are warning that the credit card bill may not be as consumer friendly as it sounds.

For the past years, credit companies had been profiting greatly, expanding available credit without taking into account the rising debt of cardholders and profiting mainly from high interest rates and large fees instead of debt payments. When the economic crisis hit, the credit industry found itself in a financial dilemma, burdened with toxic assets and increasing defaults. As a way to salvage what they could, they raised interest rates to astronomical levels and increased fees.

With the credit card bill in place, cardholders are hoping that things are going to change for the better for them, credit wise. However, if credit industry experts are to be believed, their sense of relief may be misplaced.

While the credit card bill does provide legislation which will make credit card practices less predatory and more consumer friendly, these same legislation will also mean that credit cardholders are going to have to deal with credit that is harder to get. For instance, the legislation limiting the capabilities of credit card companies to adjust interest rates of an existing debt means that credit card companies are going to be offering higher interest rates at the very start. It won’t matter either how good of a borrower the credit cardholder is.

Credit card companies see adjusting interest rates on an existing debt as a way to adapt the specific credit line according to the risk exposure of the cardholder. Without this capability, they say that they have no other choice but to spread their risks across their customers, regardless of risk. What this means is that, if a one cardholder is not able to pay the interest rate commensurate to the risk that he or she poses for the credit company, then all the other customers of that company have to pay a higher interest rate as a result.

Whether this scenario will actually happen or not still remains to be seen, cardholder advocates counter. Credit cardholders are getting smarter about managing their credit and, with the disclosure amendments in place, they can make much more intelligent decisions. Competition among credit card companies is another factor in their favor as well.

June 1, 2009

Controversial Credit Card Bill Basically Good Despite On-going Criticisms

The credit card bill was signed before Memorial Day just a few days ago and already, it is getting hit by criticisms left and right. Credit card industry supporters are saying that the bill ultimately cuts off credit from people when they need it the most. Credit cardholder advocates are calling the legislation weak.

Controversial Credit Card Bill Basically Good Despite On-going Criticisms The credit card bill is essentially a legislation that came out directly from the credit cardholders themselves. The complaints of credit cardholders got loud enough that lawmakers finally paid attention. With the constant prodding of their constituents and President Barack Obama himself, Congress released a workable credit card bill in record time. Except for the “guns in national parks” amendment, the credit card bill is basically what the credit cardholders asked for.

Unfair and downright deceptive practices of credit card companies had gone on for several years before the government finally took a stand against them.

Over the years, credit card companies had figured out that they could maximize profits by shifting their target from responsible credit card owners to credit cardholders who cannot fully pay off their debts but are willing to pay penalty fees to be allowed credit. The credit card companies basically make money off people who are desperately trying to pay off their debts as much as they can. They do this by increasing interest rates as the debt ages, adding penalty fees to late payments, and deceptive practices, such as including a “minimum amount due” entry in their bills, which when followed does not actually subtract from the debt balance of the credit line.

Other practices include initially offering very low interest rates that go sky high once the balance goes unpaid even for a month, and allowing overdrafts by default but charging high penalty fees for it later on.

The credit card bill restores some semblance of fairness between credit card companies and cardholders. Legislation in the credit card forces credit card companies to give ample warning to credit cardholders before raising interest rates, restores raised interest rates to lower levels if the cardholder consistently pays off the balance for six months, and encourages full disclosure by credit card companies of their policies.

These measures will definitely hurt the profitability of credit card companies. However, it will not mean the end of their business; they simply have to adjust to a fairer, more consumer-oriented business model. Credit cardholder advocates should also appreciate the advantages of credit cardholders receive and they should face the fact that a lot of the responsibility for avoiding credit card debt lies on the credit cardholders themselves. In any case, the credit card bill may only be the opening salvo, as legislators continue to look into other issues pertaining to the credit card industry.

May 28, 2009

Dodd Sees More Work Ahead after Credit Card Bill Passes

Last Friday afternoon, President Barack Obama and key personalities from congress gathered in the White House for the signing of the credit card bill.

Dodd Sees More Work Ahead after Credit Card Bill Passes The credit card bill is a controversial bill that aims to correct what many see to be the fraudulent and deceptive practices of the credit industry. Amidst the outcry of overburdened credit cardholders, the President and the Congress responded with a bill that curtails arbitrary interest rate increases, protects cardholders paying off debts, and demands more transparency from credit card companies, especially with their credit card agreements.

The bill has its share of supporters and detractors. Credit cardholders, the main group to benefit from the legislation, are excited to see what the bill can do for them. However, many see that more could have been done with the bill. The credit industry, the target of the bill’s legislation, has been adamant that the passing of the bill will be detrimental – not only to the credit industry but to consumers themselves.

The President and the Congress have deliberated and seen to it that the credit card bill provides a middle ground for both sides of the argument. During the signing, President Obama stressed the point saying, “We’re not going to give people a free pass. We expect consumers to live within their means and pay what they owe. But we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives.”

Sen. Chris Dodd called the credit card bill “the strongest piece of consumer legislation that has been passed in Washington in a decade”. However, he also said that there is still a lot of work to do with regarding unfair credit card industry practices.

During a conference call last Friday, Sen. Dodd said that two major problem areas in credit industry practices still need to be addressed: unlimited interest rates and high merchant fees. The senator stated that there is still a need to create some kind of legislation that will put a limit on how much interest credit card companies can issue and on the fees that merchants have to pay to credit card companies when customers pay with plastic.

These two issues were already heavily debated when the credit card bill was being deliberated in the Senate. In the Senate, a proposal putting a 15% cap on interest rates was ultimately killed by the strong lobbying of the credit industry and by worries in the Senate that the proposal might ultimately kill the credit card overhaul package.

Sen. Dodd has not given up on these issues and is already making preliminary steps to pursue legislation on interest rate caps and regulation of merchant fees.

May 27, 2009

Will Credit Card Bill Burdens Responsible Credit Cardholders?

The passage of the credit card bill has gone remarkably fast. The House version passed during the last days of April and the Senate version just got passed last week. A few days later and President Barack Obama signed the bill into law.

Will Credit Card Bill Burdens Responsible Credit Cardholders Credit cardholders are excited to finally see some sensible regulation for credit cards. Long feeling oppressed and frustrated by arbitrary interest rate increases and unreasonable fees, credit cardholders have been pressing for the passage of the credit card bill since it first came out in congress.

On the other hand, the credit card industry has been against the credit card bill from the start. Their stance is quite understandable, considering that, with the passage of the credit card bill, they have been essentially stripped of their most lucrative customers the past few years, subprime borrowers.

Partially to limit support for the credit card bill, the credit card industry has been issuing dire warnings of what is to come should the credit card bill become law. One of the most ominous is that responsible cardholders, those who keep their payments up to date and maintain good credit scores, will get hit hard and will basically end up supporting bad borrowers.

The credit card industry says that this will happen because, in order to make up for their losses and decrease their exposure to financial risks, they will have to make credit much less available to credit cardholders, regardless of credit standing. Annual fees will be making a comeback. Initial interest rates will also soar to balance out the inability of borrowers to increase interest rates on existing debts. Reward point programs will also be put a stop or, at least severely curtailed.

These dire warnings, though worrying, may not actually come true. What will assuredly happen when the credit card law becomes active is that credit cardholders will again have some confidence and trust on their credit cards. They won’t be worrying about high interest rates and fees and other unfair credit card industry practices.

The credit card bill won’t save all credit cardholders, however. Those with large credit card debts will have a ways to go to get out of debt. At the very least, however, they won’t have as hard a time paying down their debts.

With credit cardholders much more confident, cardholders will most likely be returning to their plastic for their purchases. They will also most likely be more choosy and intelligent in their choice of credit cards, what with the new credit card bill transparency measures. This will mean high competition among credit card companies. With competition taking place, the credit card company able to offer the best features and incentives package wins which makes the probability of the industry’s dire warnings coming true very low indeed.

May 25, 2009

The Downside Of The Credit Card Bill

With the recent signing of the credit card bill by President Barack Obama, it seems that consumer friendly credit cards will be on the way. Or will it?

barack obama Throughout the deliberations of the credit card bill, the credit card industry has largely been on hand providing dire warnings that the passage of the bill could have largely negative effect on the credit industry. According to credit card companies, with the passage of the bill, American consumers will experience a drying up of credit.

R.K. Hammer Investment Bankers’ chief executive officer Robert Hammer, who also serves as an adviser to credit card companies, said that the credit card bill, aside from protecting consumers, may also force banks to lower the available credit, cutting available credit by as high as $90 billion in order to decrease risks.

According to New York University economics professor Andrew Caplin, with such a high reduction on credit, the overall economic recovery led by consumer spending will be hurt. According to figures, the U.S. Economy relies heavily on consumer spending, with 70% of the economy relying on it.

Caplin says that, “The bill may stop various forms of abuse, but it will stop some various forms of credit. If the economic recovery is going to rely on consumer spending, it will be a long wait”.

According to Britt Beemer of America’s Research Group, consumers who use credit cards usually spend more. With the credit card bill reeling in credit card spending, luxury items such as electronics will be hurt. The apparel industry, already ailing in this economy, will be one of the industries most affected.

However, some are saying that the credit crunch is already underway. According to figures in the May Federal Reserve report, consumer credit dropped by $11.1 billion during March. This makes it the biggest drop in credit since 1990, equivalent to an annual rate of 5.2%.

Josh Frank, a supporter of the bill and center for Responsible Learning senior researcher, puts the blame of credit drying up to the practice of reckless lending and the lack of regulations in the credit card industry.

According to Frank, “The impact on available credit has been greatly overstated as an industry tactic to scare people to be against the bill”.

Although the bill puts restrictions on arbitrary interest rate and fee increases, banks can still recoup losses by increasing the initial rate. Incidentally, an issue which consumer groups find troubling. However, major credit card companies have already stated that, to recoup their losses, they will probably turn to increasing initial borrowing rates, issuing annual fees and stopping reward programs.

In the end, the issue will be decided by the credit card industry’s reaction to the bill and the change in the buying habits of American consumers.

May 20, 2009

Credit Card Legislation, a Step in the Right Direction

Credit Card Legislation, a Step in the Right Direction Government legislators are up in arms over what to do with the economic downturn that is recently plaguing the United States. Their latest bid to stem the tide is the much hyped credit card bill scheduled for release Tuesday.

The government is still reeling from the financial crash that happened late last year. The effect of the crash still continues up to this day. RealtyTrac Inc. recently reported that the foreclosure problem has worsened. This April, a jump of 32% of American homeowners facing foreclosure was seen compared to last year’s figures also taken in April. The rate of jobless Americans also race to 8.9% this April and predictions put the numbers even higher in the coming months.

Clearly the American public needs some breathing space and legislators are hoping to provide just that with the credit card bill. However, even if the bill were to be signed immediately, the earliest that they can expect to receive its benefits would be after nine months.

Once President Barack Obama puts his signature on the bill, the credit card industry will have nine months to update its business practices to reflect the legislations of the bill. The credit card bill will largely do away with arbitrary interest rate increases and high transaction fees that have been the bane of credit cardholders.

The credit card bill will have other provisions as well, which encourage transparency and fair practice in the credit industry. One provision requires credit card companies to make their credit card agreements available online. Credit cardholders will also be allowed to pay their bills through the phone or through the Internet for free. Interest rate increases would also be applicable only after the credit card company has given the cardholder a 45-day notice and an explanation for the rate increase.

A key provision of the credit card bill addresses what is being called in the industry as “universal default”. Universal default is when a credit cardholder’s interest rates are changed by a lender when the credit cardholder misses a payment to another lender on an unrelated debt.

The credit card bill will give a cardholder a leeway of 60 days to catch up with the debt payments before seeing an interest rate increase. If the cardholder consistently pays the required monthly amount for six months, the credit card company must return the interest rate of the cardholder to the previous rate.

The credit industry is against the bill, naturally, and they are warning legislators that the bill could restrict access to credit for some Americans. However, lawmakers are dead set on the bill, stating that this time around, the credit industry has just gone too far.

May 18, 2009

Credit Card Legislation is Good, Says Government amidst Credit Industry Warnings

The credit card industry has issued warnings that the passage of the credit card bill will mean that credit will no longer be available to some consumers.

Credit Card Legislation is Good

Following a huge outcry from consumers, President Barack Obama and the congress have made a legislation that aims to correct certain practices of the credit card industry, which many consider to be deceitful and unfair. There is a high probability that the legislation will be placed on the President’s desk by Tuesday next week. With the passage of the bill, the credit card industry will experience sweeping changes that will most likely have a negative impact on the profitability of credit card companies. The dire warnings of the credit card industry are most likely to come true as well.

In response to credit industry warnings of credit drying up for some consumers, the government is saying that it is fine with it. Backing up the stance of the government, many senators have been commenting that if getting credit comes at the cost of the credit cardholder not being able to pay it off, then the consumer is better off not having any in the first place.

The biggest impact that the credit card bill will have will be in the credit card industry, however. The most affected will be credit card issuers who issue credit cards to people with low credit scores. Some of these issuers survive on people who are unable to keep up with their monthly balances by having higher interest rates and more stringent penalties. The legislation in the bill will expressly stop this kind of flagrant abuse. Other industry players will also experience a slow down of profits as the legislation puts limits on interest rate hikes. For instance, a provision on the bill requires that if a customer gets an interest rate increase because of late payments, the issuer must lower the interest rate if the customer is able to pay on time for six consecutive months.

Austan Goolsbee, economic advisor of the White House, said in an interview that, “There’s nothing that says credit-card companies need to maintain exactly the same profit rates that they have when there aren’t rules on the road”.

“We’ve gotten into situations where some of the most egregious actors have pushed us to the point where it’s like, ‘Well if you didn’t want to be mugged, you shouldn’t have been walking out in the park because everyone knows there’s muggers out here,’ the economic advisor further elaborated.

May 17, 2009

Credit Card Legislation Voting Marked for Tuesday

It seems that President Barack Obama’s all out support for the credit card legislation may finally yield results come Tuesday. According to Sen. Harry Reid, Senate Majority Leader, the U.S, senators have decided that Tuesday evening will be when they will hold a vote on whether the credit card bill will get senate approval or not.

Credit Card Legislation Voting Marked for Tuesday The credit card legislation under deliberation in the Senate aims to stop controversial credit industry practices. It will also make it much more difficult for credit card companies to issue rate hikes on credit cardholders. The credit card legislation would also greatly limit credit card marketing practices for persons under 21 years of age.

The Senate’s credit card legislation bears many similarities to the Credt Cardholders’ Bill of Rights, which the House passed last April. However, it is much more stringent than the House’s bills in several areas. The Senate’s credit card bill will also take effect much sooner. Once enacted, it will come into effect nine months after. On the other hand, the House’s legislation would only become law a year after it is enacted or on July 1, 2010.

The issue of credit card regulation gained political prominence when households, already heavily burdened with financial problems, cried out against banks who were introducing sudden interest rate hikes and hidden fees, even as they received large financial bailouts from the government.

As a result of the public outcry, President Obama has made the issue a priority and has been calling for support from all sectors. His most recent campaign being his town hall meetings, one of which was recently held in New Mexico. He has also put a lot of pressure on Congress, demanding that they bring the bill to his table when Memorial Day comes.

The banking industry is understandably not very keen about the bill. They have warned that the new regulations being implemented by the bill might lead to a dry up of credit for a number of borrowers. It might also increase all borrowers’ introductory rates.

Whatever the banking industry may have to say on the matter, the legislation still continues to gather steam in the Senate. Sen. Reid recently released a statement saying that the senators had come to an agreement to proceed to a procedural motion vote to proceed to the bill. If the motion is passed, which is highly expected, all pending amendments that remain will be considered by the Senate; after which, they will continue to vote on the legislations’ final passage.

May 15, 2009

President Obama Answers Credit Cardholders’ Cries, Continues Support for Credit Card Bill

President Barack Obama continues to be an all out supporter of the credit card bill, which is aimed at protecting credit cardholders from some of the shadier practices of the credit card industry. To recall, credit card companies issued massive interest rate hikes and late fees, which had credit card consumers crying foul.

President Obama Answers Credit Cardholders' Cries, Continues Support for Credit Card Bill The House has already answered the outcry of the consumers with their Credit Cardhoders Bill of Rights and Senate may release their Credit Card Accountability, Responsibility and Disclosure Act (Credit CARD Act) as early as the end of the week. Still, Obama continues to press Congress to hasten the passage of the bill, demanding that they send the bill to him by the time Memorial Day comes.

Just recently, President Obama was drumming up support in Albuquerque, N. M. where he held a town hall meeting. The meeting was attended by many consumers who expressed their views on how they have been deceived and misled by credit card companies.

Last week, President Obama released a statement where he said; “Americans know that they have a responsibility to live within their means and pay what they owe. But they also have a right to not get ripped off by sudden rate hikes, unfair penalties, and hidden fees that have become all too common.”

The credit card issue is a major priority for President Barack Obama. The number of Americans affected by the credit card crisis is staggering. The White House placed the number of households with credit cards at 80%. Of these 80%, almost half have outstanding balances. As the economic downturn continues, finding a resolution for this problem becomes more and more urgent.

The President’s recent actions have not gone unnoticed in the credit card industry. Industry insiders have stated that the legislation that the President and the Congress are pushing for are already redundant as the Federal Reserve has already established new rules, which take on many of the issues that are of primary concern to Congress and to the President. The American Bankers Association has also expressed its disapproval of the legislation, saying that it could backfire. The bill could limit the available credit for credit cardholders.

After his talk in Albuquerque, Obama plans to continue on to New Mexico where he will hold another town hall meeting at the Rio Rancho High School. The meeting will be on May 14. It will be attended by a number of people who have sent letters and e-mails to the president complaining about their bad experiences with their credit card companies.

May 12, 2009

Town Hall Discussion on Credit Card Issues on the Way

Town Hall Discussion on Credit Card Issues on the Way As the credit card crisis continues, the White House is once again flexing its influence to confront the issue affecting a large majority of American citizens. This time, President Barack Obama plans to hold a town hall meeting during a planned stop in New Mexico on May 14. The President plans to open discussions on the credit card crisis during the meeting and to push for the passage of the credit card reform bill in Congress.

Robert Gibbs, press secretary of the White House, expressed to reporters the administration’s “strong desire to get something done on an issue of tremendous importance to middle class families and that is to rein in some of the excesses and some of the abuses that we’ve seen from credit cards over the past many years”.

Gibbs further elaborated on the administration’s stance saying, “For many people, credit cards provide an opportunity to finance purchases, but we think there’s a more equitable way to do that. Those reforms are on their way through Congress.”

The White House press release came as cardholders were reeling after the effects of the sudden interest rate increases and banking fees that came to effect last year and earlier this year. Rate hikes and card fees became the norm as banks struggled to keep afloat while the economic crisis continued. Unfortunately, cardholders were ill prepared for the sudden interest and fee increases, having to contend with a failing job market and a drop in the property markets.

The first signs of the changes on credit card legislation were first seen in the new federal rules which were set to become effective on July 1, 2010. Earlier this year, the credit card crisis got some much needed attention from President Barrack Obama and a bill arrived in the House of Representatives early this year.

The credit card amendment has already passed through the lower house and is currently going through deliberations in the U.S. Senate. It passed through the House of Representatives late in the month of April and was known as the Credit Cardholders’ Bill of Rights. The passage was by an overwhelming vote of 357 to 70.

In the U.S. Senate, the bill is sponsored by Senator Christopher Dodd and Senator Richard Shelby, who is Dodd’s GOP counterpart. The Senate bill has been named as The Credit Card Accountability, Responsibility, and Disclosure Act or the Credit CARD Act. The bill is supposed to be a tougher version of what the House of Representatives recently passed.

As the bill continues to be deliberated in the senate, President Obama’s town hall discussion is calculated to boost support for it and, at the same time, inform the public on what the bill entails and what it will mean for the American cardholder.

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