Senate nears passage of legislation to help out credit-card holders

McClatchy Newspapers

WASHINGTON — Consumers jolted by sharp, sudden interest rate increases on their credit cards would get strong new protection from such surprises under legislation that appears headed for Senate passage later this week.

The bill’s journey became smoother Tuesday as key lawmakers from both parties agreed to push a measure giving 45 days’ notice before interest rate, fee or finance charge increases can go into effect and requiring promotional rates to stay in effect for six months.

The Senate bill is almost identical to the one passed in the House. A key Senate section, one that helped produce the compromise bill debated this week, would bar card issuers from imposing retroactive rate increases until a consumer was more than 60 days behind in making a payment.

If, after six months, the consumer paid the minimum balance on time, the lower rate would be reimposed.

The measure also would put tough new restrictions on issuing credit cards to minors and make it easier to use gift cards.

The House of Representatives passed its own “Credit Cardholders’ Bill of Rights” last month with strong bipartisan support — and a strong push from President Barack Obama, who plans to discuss the issue at an Albuquerque, N.M., town hall meeting later this week.