AARP: Senate Passage of Enhanced Credit Card Legislation Brings Financial Relief One-Step Closer for Consumers

Amplified Oversight of the Credit Card Industry Will Help Protect the Rights of Consumers Who Are Experiencing Economic Hardship

May 19, 2009 -- Washington, D.C. – AARP today hailed the passage of the “Credit Card Accountability Responsibility and Disclosure Act of 2009” as a vital step forward to further protect consumers who are facing serious financial difficulties.

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At a time when consumers are increasingly relying on credit cards to pay for basic necessities, this legislation provides a welcome opportunity to improve transparency and accountability within the credit card industry.

“Each and every day, the lingering recession continues to take a toll on the millions of financially struggling Americans who are trying to make ends meet,” said AARP Executive Vice President Nancy LeaMond. “These people, young and old, cannot afford to wait for the credit card industry to ‘do the right thing’ during this time of unprecedented economic strife. The significant, bi-partisan progress made today in the Senate will provide important protections for consumers as they not only work to pay their everyday expenses, but also strive to pay down crippling credit card debt. AARP calls on Congress to move quickly to get this vital legislation to the President to help bring relief to help bring this much needed financial relief one-step closer for consumers.”

Credit card practices and related debt are of particular significance to older Americans, and never more so now when savings, retirement accounts, and home equity have plummeted in value. Job loss and growing medical and other insurance costs have compounded the financial burden many now face. Older individuals are relying more and more on credit cards to defray financial obligations that previously were paid by other means. Research shows that credit card debt among card holders age 65 and older nearly doubled from 1989 to 2004. Further, AARP research shows that 44% of older individuals consider credit card debt to be a “major concern.” The same research also found that 27% of older individuals reported having difficulty paying off credit card debt.

If enacted, the “Credit Card Accountability Responsibility and Disclosure Act of 2009” would improve the rights of consumers by curtailing unfair increases in interest rates, prohibiting exorbitant and unnecessary fees, re-allocating payments so that higher rate balances are paid off first, do away with double cycle billing, and prohibit universal default on existing balances.

Source: AARP