Released: October 05, 2007

Common sense and credit cards

Source: New York Times (Free Registration)

After years of looking the other way, Congress seems finally poised to rein in the predatory practices that have become all too common in the credit card business. Several bills now pending would outlaw unfair billing practices, like the one known as universal default, under which a late payment on an unrelated bill — a utility bill, for example — allows credit card companies to raise their interest rates through the roof. Other legislation would place limits on the way companies market to college students. All too often, these companies sometimes deluge students with cards, even when they have no verifiable income, luring them and sometimes their families into debt. Under pending bills, the companies would be forced to consider a student’s ability to pay and could extend no more than a single card to a student with no income. In cases where parents are jointly liable, the spending limit could be raised only with parental approval.

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