Credit card help is on the way

Gerri Willis tells you how the Credit Card Bill of Rights can keep you from getting burned.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Gerri Willis, CNN

For more information on managing your largest investment, check out Gerri Willis' "Home Rich," now in bookstores.

NEW YORK ( -- Questionable credit card company practices have been dogging consumers for years. But a Credit Card Bill of Rights is working its way to congress. Here are the details.

1. Get the headlines

The Credit Card Bill of Rights, authored by Rep. Caroline Maloney will be considered Thursday by a congressional committee. This is the final hurdle before it reaches a vote in the House of Representatives.

Here are some of the proposals in the bill:

  • It prevents companies from applying interest rate hikes retroactively to old balances as long as the customer is in good standing with that particular card
  • It prohibits card companies from arbitrarily changing the terms of their contract
  • This bill requires that consumers get 45 days notice of interest rate increases and companies must mail billing statements 25 days before the due date.

Maloney emphasizes that credit card company practices, like penalty interest rates, universal default, interest rate changes and double-cycle billing may push more and more people into bankruptcy.

2. Watch out for fees

Thanks to the credit crunch and a growing number of defaults, card issuers are coming down hard on borrowers. Even if you have a good credit score and you pay your balances on time, you're not safe.

A recent study by Consumer Action found that more credit card companies are cutting credit limits on your cards - which can hurt your credit score, especially if you charge close to the limit - and raising interest rates or terms at any time and for any reason.

Fees are one way that credit card companies can raise money. "Fees are such an attractive profit, they can't let go of them," says Linda Sherry of Consumer Action.

3. Mitigate your risk

Pay your bills online. Consumer Action's survey found that a majority of lenders, even if you're payment was received one or two days late, you would trigger a default APR averaging almost 27%.

If you find that your credit limit was cut, call your issuer and ask to have your previous credit limit raised. In the meantime, try to keep your balances less than 30% of your credit limit.

4. Keep current

The Credit card bill of Rights is set to be voted on in committee in a day or two. After that, it will head to the House in September. In the meantime, the Federal Reserve is also outlining some changes to the way credit card companies operate.

If you have a complaint about your credit card company, send it to the Fed. They want to hear from you. Go to, click on consumer information. So far, over 33,000 people have left comments. To top of page

Gerri's Mailbox: Got questions about your money? We want to hear them! Send e-mails to or click here - each week, we'll answer questions on CNN, Headline News and
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.