President Obama held an unprecedented meeting on Thursday with 14 of the country’s top credit card executives to discuss what he called the unfair practices of the industry.
Chances are you know what the President is talking about. From surprise rate hikes to lowered credit limits to new fees, the credit card companies are playing offense in the face of a deteriorating credit environment and unstable economy.
But many feel like they’re overstepping their bounds in their relationship with consumers. Take John Ulzheimer, our own resident credit guru with pristine credit scores and an immaculate credit history. For the second time in months, he got a letter from his credit card issuer informing him that his credit limit has been cut in half for “under-usage.” (Watch the Web Extra where he re-enacts his phone call to the credit card company here). If Ulzheimer has to play hard ball with the credit card industry, then we’re all in trouble.
After the meeting, President Obama told reporters how important he believed it was for consumers to be offered protection from rate hikes for no reason and fee traps. He urged the credit industry to re-write their forms in plain English. “No more fine print, no more confusing terms and conditions,” Obama said. “We want clarity and transparency from here on out.”
Over on Capitol Hill, Senators Chris Dodd (D-CT) and Chuck Schumer (D-NY) drafted a letter to Fed Chair Ben Bernanke asking him to use his authority to immediately freeze credit card rate hikes. Sen. Dodd already has a bill moving through the Senate that would increase the protections offered in the Credit Cardholder’s Bill of Rights (to take effect in July 2010) including making it illegal to aggressively market credit cards to minors under 21.