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US Credit Debt

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US Credit Debt

Credit Cardholders' Bill of Rights has never been more passionately advocated than today, just two months before the November presidential elections. Barack Obama together with two other senators Joseph Biden and John McCain are making sweet promises to provide for greater consumer protections though a House vote on the bill.

The need for essential credit consumers' protection became evident when the stricter industry regulation did not bring as much debt relief as expected. Lots of people still face abuses even when they pay bills on time, keep their debt-to-credit ratio low and spend right to be eligible for rewards. Obama's promise to curb unjustified interest rate hikes wins consumers' approval and, consequently, their votes.

The Senator's aim now is to settle the question with the House Speaker and get permission to vote on the bill before the elections take place.

What is expected to change once some provisions of Credit Cardholders' Bill of Rights come into effect? No arbitrary interest rates increase should hurt the cardholders while they pay their bills regularly on time, as well as no new interest rates can be applied to balances accumulated under the previous low interest rate. Late penalty fees should be forbidden to be charged to checks sent in some days before the due payment day. Credit applications, especially those with instant approval should have better disclosures.

The provisions will favor not only financially vulnerable customers but also responsible cardholders, protecting them from excessive fees draining their wallets and pulling them into credit debt. The approval and introduction of the greater consumer protections promise an easy campaign for Obama.

Interesting facts about Mr. Obama's running mate Senator Biden add spice to their consumer protection campaign. Mr. Biden is known to have had some close links with the banking industry of Delaware that sponsored some of his campaigns and gave his son a job. Not only that. Joseph Biden contributed to the ruinous bankruptcy reform some three years ago. Today, he is voting for the ordinary American, which means against the bankers.

Senator McCain is not voting for the better consumer protection reform with entirely clean hands, either. He was also loyal the new bankruptcy law, which made it much more difficult and expensive to file. As required by the law, people were to pay penalty fees and higher interest rates for a long period of time until they could finally declare bankrupt. It forced consumers into living in the ever lasting debt, adding up to the national debt figure.

Unlike both Senators, Mr. Obama voted against the new bankruptcy law and opposed it with milder terms for the elderly, the military and victims of natural disasters. He also contributed to the new and stricter card rules and cardholders' rights protections aimed at prohibiting or at least limiting the predatory policies exercised by banks and companies.

Now that the presidential elections are close, more radical measures are needed. The support of the Credit Cardholders' Bill of Rights would be a smart political trick and also a ray of light for the ordinary American credit consumer.

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