In a year when any headline involving the term “credit” has been overwhelmingly negative, it seems that consumers may see some good news associated with credit shortly.

New rules which were proposed earlier this year would prohibit credit card companies from increasing rates at will, with some exceptions such as those that apply to people who fail to pay a bill within thirty days. Restrictions and limitations on late fees, universal defaults, shorter payment periods and confusing payment allocations for different balances are also addressed in the nearly 1000 page proposal.  The next and final step for this major reform proposal is a vote scheduled for December 18,  seeking approval of the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration. The measure is expected to pass with little difficulty.

The credit card industry naturally is not happy about the reform, but the inevitability of it’s implementation has pretty much arrived.  These changes, the most significant in almost thirty years, will fundamentally alter the way credit card issuers market, bill and advertise credit cards. Industry leaders have warned that interest rates charged on credit cards will rise for all borrowers, even those with stellar credit, and that credit limits may be reduced due to of the required changes.

For a full listing of all the highlights of the proposal, read this article.

If the reform proposals pass, and there is a high probability that they will, these practices of credit card companies that blindside consumers will hopefully be put to rest. At least it is a step in the right direction!

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