Would a Credit Card Bill of Rights Ultimately Help or Harm Consumers?

• “Help”

  

  “Issuers Would Have to Fairly Apply Payments to Card Balances ”

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Issuers Would Have to Fairly Apply Payments to Card Balances

Consumer Federation of America

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Currently, if a consumer makes a credit card payment, credit card companies apply all payments to the lower interest rate balance that is owed, such as for a low introductory offer, rather than to higher rate debt that may be owed, such as for a cash advance.  This practice prevents the consumer from paying off higher interest balances quickly and adds  unwarranted and costly finance charges to the balance.  The Act would require credit card issuers to apply payments to either the highest interest rate debt or proportionally to both high and low rate debt.

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"Help" CFA

• Act Would End Bait and Switch Contract Clauses
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• Cardholders Would Not Pay Interest on Debt Already Paid Off
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• Issuers Would Have to Fairly Apply Payments to Card Balances
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• Prohibits Retroactive Application of Rate Hikes for Consumers
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• Act Curbs Late-Fee “Gotcha” Tricks
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"Harm" AFSA

• Policymakers Need to Look at the Big Picture
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• The Right Numbers Tell a Different Story
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• Price Controls are Not the Way to Go
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• Risked-Based Pricing Benefits the Customer
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"Harm" CEI

• The Market Provides Abundant Choices
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• The Poor—and Those With Bad Credit—Would Suffer Most
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• Deregulation Provides the Best Path to a Better Consumer Experience
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Do We Need Credit Card Rights?

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