Prohibits a creditor from furnishing information to a consumer reporting agency concerning a newly opened credit card account until the consumer has used or activated the credit card.
Now this is really dumb. The credit lines are pretty much available once you have the card in hand, but you often have a few weeks to activate the card. The only people this will help is people who want to open several unsecured lines of credit (since this bill is targeted at credit cards) within a short window. I can think of two types of people who would want to do that: The AOR folks, and the people who want to run up their cards, with no intention of paying them off. And let's face it, if the AOR folks were anything more than a trivial percentage of credit card users, AoRs would be made nigh impossible overnight. This "right" is tailor-made for fraud.

I agree that disclosure is the best way to ensure free market principles work efficiently...

That said, there are some provisions in this bill that I think are good.

Credit Cardholders' Bill of Rights Act of 2008 - Amends the Truth in Lending Act to prohibit a creditor from using certain adverse information, including information in a consumer report or any change in a consumer's credit score, as the basis for increasing any annual percentage rate (APR) of interest on the consumer's outstanding balance under an open end consumer credit plan, except for actions or omissions of the consumer directly related to such account. (Thus eliminates the universal default for credit already outstanding.)Eliminating universal default is a good thing because, as many of us know, credit report information can be inaccurate. It's not fair to alter the terms of a contract because of potentially unreliable information from another source. If two parties enter into a contract and it is being upheld by both parties, I don't see why another relationship has anything to do with it.

Requires advance notice of credit card account rate increases.
Authorizes a consumer who receives such notice to: (1) cancel the credit card without penalty or the imposition of any fee; and (2) pay any outstanding balance that accrued before the effective date of the increase at the APR and in the repayment period in effect before notice was received.Again, purchases are made at an agreed-on finance rate. Other than rate changes associated with normal variable rate products, no retroactive rate changes should apply. Variable terms such as "prime + 5.9%" can obviously still vary to the extent that prime does.

Requires each periodic statement of account to provide specified information on obtaining the payoff balance.I like this provision, because it helps provide disclosure. A LOT of people don't understand the double-cycle billing, and think that by paying off their card one month, it is paid off for good. Not so. Just like the "14-day payoff" amount we are furnished for a car loan, this would help resolve the confusion over double-cycle billing.

Authorizes a consumer to opt-out of creditor authorization of over-the-limit transactions if fees are imposed.My favorite provision! If you extend $1000 in credit to me, and a third party comes along and requests to be paid $1200 on my behalf, I should at least have the right to request that you refuse that payment.

chimeer said:1. The same principal of universal default is used in many different type of contracts, and is perfectly reasonable for a creditor to change the interest rate they are charging you based on your recent credit history. Especially when you are dealing with unsecured financing.Perhaps so, but it's not the way a mortgage or an auto loan works, which are the two other major kinds of financing that average Joes maintain. Either way, my objection to universal default is due to the fact that credit reporting agencies are highly imperfect entities, and one data entry person's typo can result in thousands of dollars in penalties for the innocent.

chimeer said:2. Purchases were made upon an agreed upon contract and both parties need to live up to the contract.I wasn't arguing the legality of the practice; of course it is legal. But unfortunately, it's always difficult and often impossible for people of non-legal persuasions to comprehend the amount of legalese encountered to perform basic daily functions in society. Do you read every software license agreement before you install it? I don't. And I certainly don't pore over all my AOR credit card agreements. What if there's a provision hidden on page 13 in 5-pt font that they can cancel my promotional APR at any time if they deem my payments to be too small? Well, by golly, I agreed to it! Bottom line is, I'm in favor of letting people enter into contracts and letting the free market work, if there is disclosure that can be comprehended by the majority of citizens. Currently, in the credit card arena, there is not.

chimeer said:3. There is nothing wrong with providing this information, but I don't think it would do much good.Probably not.

chimeer said:4. If you are dumb enough to charge $1200 to a card that has less than $1000 remaining credit available it is your own fault.It's not a matter of "dumb". People often put recurring payments such as utilities on credit cards. What if there is a billing error, or you use too many cell phone minutes and your bill is higher than usual, or any number of other situations? It's often impossible to know what a service provider will charge your card until the charge is already processed and approved. Verizon does this to me -- my statement closes the exact same day as my card is charged. Another example: what if you have a $10,000 credit line and want to purchase $9,950 worth of items? You swipe your card. But little did you know that your statement closing date was that day and it happens to be your 1-year anniversary and a $60 annual fee is charged. That puts you $10 over your credit limit, subjecting you to fees. The idea that a consumer does not have the ability to request that the creditor not approve a charge for over their credit limit is ludicrous. It would be akin to taking out a mortgage for $100,000 including closing costs, and then arriving at the closing table with the final amount adding up to $100,033, and then the lender cutting a check for the larger amount but charging the borrower an extra couple hundred bucks in "overlimit" charges.

chimeer said:People just need to grow up and take responsibility for their own actions rather than limiting the actions of others to "protect" the irresponsible and lazy.I agree about people needing to grow up and take responsibility, but I also think you need to enable people by requiring full disclosure of anything and everything that might happen to them, rather than hiding it in a legal document that you only receive after you have already opened the new account.

okwiater said:I agree about people needing to grow up and take responsibility, but I also think you need to enable people by requiring full disclosure of anything and everything that might happen to them, rather than hiding it in a legal document that you only receive after you have already opened the new account.

I can agree that full easy to read disclosures are important, but limiting my ability to obtain cheap credit in order "protect" against other people's stupidity is rather asinine in my opinion.

Don't for a moment think that further regulation won't cost responsible and capable people money and opportunities with credit. Credit card companies will change their lending standards because they will no longer be able to dynamically adjust for risk, so they will move to the next alternative to increase rates and decrease limits for the majority of consumers.

I think inexpensive credit will always be available to people who maintain good repayment histories. Credit limits may be lowered, sure, but that's probably not a bad thing. Latest tally shows that I have $271,800 in revolving credit line, which is less than my mortgage, and it's backed by nothing but a couple of digits typed into a "Household Income" field. No average Joe requires this much credit.

I agree with you chimeer that additional regulations will result in additional costs, but you know there is a Biblical verse that I do believe has merit: do not place a stumbling block before the blind. I'm not in favor of the government infringing on a person's right to make the wrong decision, but I am in favor of government preventing companies from doing things that are purposely designed to stick people with bullshit fees that don't really reflect their costs or pricing of risk.

That's all.