New protections on credit cards were approved

A package of new protections for credit cardholders headed toward an expected U.S. Senate vote next week after overwhelmingly clearing the U.S. House on Thursday. The bill would require card issuers to give consumers a 45-day notice before an interest rate increase; require statements to be mailed at least 25 days before payment is due; and prohibit so-called double cycle billing, in which interest charges are added to the second month of a bill for balances paid the previous month. The House approved 15 amendments to the Credit Cardholders' Bill of Rights Act of 2009. The new provisions - which would add protections for members of the military deployed overseas and require payments above the monthly minimum to be applied to the highest interest balance - reflect the wide range of complaints lawmakers have received regarding the increasingly arbitrary practices of major credit card issuers. For example, one of the amendments would set new underwriting standards for credit cards issued to college students by limiting the credit line to 20 percent of the student's annual income if there is no co-signer over age 21.New credit card regulations devised by the Federal Reserve are scheduled to take effect in the summer of 2010, but many lawmakers want to act sooner.