Labor Union Blog

If you have a credit card, and most of us have more than one, you’ve likely opened a monthly bill and seen your interest rate jump, even if you have an on-time payment record. Or worse: A company will increase the interest rate on a card raised because you’re not using it enough.

Then there’s the fine print, fees, penalties and changes in the rules that credit companies are piling on consumers, usually buried in a legalese-loaded notice too small to read without a magnifying glass.

A bill that could come to a U.S. Senate vote this week—debate starts Monday with a vote expected Wednesday—would put an end to deceptive and abusive credit card practices that are hurting honest and hard working families.

The AFL-CIO, Union Privilege, the Consumers Union and dozens of consumer, civil rights and community groups are urging the Senate to pass S. 414, the Credit Card Accountability, Responsibility and Disclosure Act.

Bank and credit card companies are fighting hard to defeat or gut the bill. Last week, financial industry lobbyists weakened the House version before it passed 357-70 . The stronger Senate version made it out of the Senate Banking Committee by just one vote, 12-11. Call your senators or click here to tell them it’s time to stop credit card company abuses.

The bill would better protect working families and make credit cards more consumer friendly, something that Union Privilege, the provider of the Union Plus Credit Card, has done for union members for more than 20 years.

In a letter to the Senate, the union-consumer coalition notes that many of these abusive credit card company tactics have been going on for years, but

as the U.S. economy continues to decline, financially vulnerable families need the protections of the Credit CARD Act more than ever.

An avalanche of credit card offers with low-interest rate come-ons and other gotchas are stuffing our mailboxes—and as a result, credit card debt has soared and now stands at $964 billion, up from $214 in 1990. Says the coalition:

As family debt increases, debt service payments on items such as interest and late fees take an ever-increasing piece of the household budget. For some families, the added costs of credit make it difficult if not impossible to manage their household income, especially if they experience an unexpected financial calamity, such as the loss of a job. At the same time, a growing number of American families have turned to credit cards not for unnecessary expenditures, but to meet basic living expenses as wages have stagnated and the costs of necessities like housing, education, gasoline, and health care have risen sharply.

The bill would:

• Prohibit credit card issuers from “any time, any reason” interest rate increases and account changes.
• Prohibit applying interest rate increases retroactively to existing balances and ensure that payments are first applied to the credit card balance with the highest rate of interest, to minimize finance charges.
• Limit hair trigger fees and penalties.
• Prevent issuers from changing the terms of a credit card contract for the length of the card agreement.
• Require issuers to offer consumers a fixed credit limit that can’t be exceeded.

The Union Plus Credit Card does not engage in many of the practices targeted by the legislation, and has long been a leader in developing consumer-friendly practices and protections for union members and their families.

Call your senators now, or click here and go to Consumers Union to tell your senators it’s time stop credit card company abuse.