Changes could be in store for credit card holders

by John Paul (jpaul@wsbt.com)

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More than 30 credit cards are being used by public officials in St. Joseph County.

(Tribune file photo)

By WSBT News1

Story Created: May 20, 2009 at 3:52 PM EST

Story Updated: May 27, 2009 at 10:45 AM EST

The U.S. House of Representatives passed a credit card reform bill Wednesday. The bill requires card issuers to give a 45-day notice before increasing your interest rate, and it requires promotional rates last at least 6 months.

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Sen. Evan Bayh says the credit card reform bill puts the cardholder's interest ahead of the credit card company's profits, but there's speculation people who pay their bills on time will foot the bill on this one.

Lee Morris and her family went to Potawatomi Park for a birthday celebration. To pay for the birthday cupcakes and gas, Morris used her credit card.

"I don't have to carry cash, it's just easier that way," said Morris. "I check everything off against the receipts, I then pay it online, then it's done until the next time."

And more Americans are making the charge toward plastic, not only for the convenience factor, but also the perks.

But a frightening surprise may be lurking between the card's benefits and discounts.

"Under current law a company, even if you pay on time, can raise your interest rate at any time for any reason whatsoever," said Bayh.

The deceptive practices have caught the attention of Congress.

"This bill will ensure that when you make a payment, you're maximizing your best interest, not the credit card company's profits," said Bayh.

But critics speculate the measure currently waiting for President Obama's signature could do more harm than good, especially for people who pay their bills on time.

Some financial analyst fear annual fees will return, rewards programs will be dropped, and instead of a grace period, companies would charge interest on purchases immediately.

"I don't think that's going to happen," Bayh said. "It's sad commentary for them to say we're going to gouge people for doing the right thing to maximize our profits."

For some, they're not taking chances.

"I think you learn your lesson once you get in too deep," said Sheila Greiner. "It's good to be debt free."

President Obama is expected to sign the measure into law sometime Friday.

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