President Barack Obama and Congress are pushing for new protections for credit card users, but consumers shouldn't hold their breath for any meaningful change.
Obama, after meeting with executives from major credit card lenders at the White House Thursday, said he wants legislation that will protect consumers from sudden spikes in fees and confusing information provided by lenders. Both the House and Senate separately are considering a credit card "bill of rights" striking many of the same tones.
But isn't this a rather weak reply? The government owns major portions of big credit card lenders like Citigroup (C) and Bank of America (BAC). But while it considers allowing federal judges to alter the amount owed on mortgages to address the housing crisis, it seems powerless to set a cap on credit card interest rates.
All the proposed legislation does, essentially, is beef up disclosure. Companies like American Express (AXP) have nothing to worry about. So what, the bill says they have to notify cardholders before they go over their limits and incur extra fees? Guess what -- the companies will just decline that purchase. Big deal.
WTF? Credit Card Bill of Rights?
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV