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Congress Puts the Squeeze on Credit Card Business

Thursday, April 16,2009 08:05 PM

Two versions of a bill limiting some of the shenanigans of the credit card companies are currently wending their way through the House and the Senate. The major issues that our elected officials are looking at are a) while still allowing the credit card companies to raise your interest rates with a set amount of notice, they would only be able to apply the higher rate to purchases going forward, b) they'd put an end to "universal default," the rule that makes it possible for ALL of the credit cards you have with any credit card company to raise your interest rates if you are late on a single card with a single company and c) they want to make it more difficult to give credit cards to people between the ages of 18 - 21. Banks are, of course, fighting back. They say that the credit card business already isn't very profitable and these changes would make it impossible to "squeeze" a profit from this sector of their business. They could still find a way to stop this madness; they did a pretty good job in getting legislation to go their way when they wanted the bankruptcy laws tightened and they have a couple of powerful Democrats on their side, too (SD and Delaware are both home to many credit card companies). But these issues have long been on the Democrat's wishlist of "things that need fixing" and banks have some pretty appalling popularity ratings right now ... what do you think? Could this kind of legislation pass? NPR has a story on this right now. Listen to it here: http://www.npr.org/templates/story/story.php?storyId=103070173&ft=1&f=1006