The Obameter

Establish a credit card bill of rights

The credit card bill of rights would "ban unilateral changes ... apply interest rate increases only to future debt ... prohibit interest on fees ... prohibit 'universal defaults' (whereby a credit card raises its rates because the consumer was late paying a different creditor ... require prompt and fair crediting of cardholder payments."


Obama signs credit card bill of rights

On the campaign trail, President Barack Obama promised to clean up the credit card industry by establishing a consumers bill of rights. No more "any time, any reason" rate increases, no more confusing contracts, he said.

Once in office, Obama wasted little time weaving that promise into speeches and town hall meetings, saying that "it"s time for reform that is built on transparency, accountability, and mutual responsibility — values fundamental to the new foundation we seek to build for our economy." On April 23, 2009, he told credit card company executives that he was supporting the consumer credit card bill of rights already inching its way through Congress.

The bill passed and Obama signed it on May 22, 2009, despite worries from the banking industry that it would reduce credit availability during the economic crisis. In large part, the law fulfills Obama's campaign pledge: It prevents creditors from imposing arbitrary rate increases on customers, it prohibits most rate increases meant to penalize consumers for late payments on unrelated accounts, and it requires companies to post credit agreements on the Internet, among other things.

The bill falls short when it comes to a prohibition of interest on the fees card companies charge consumers if they go over their credit limit or fail to pay their bills on time.  But this omission is not considered significant by consumer advocates. They say the measure goes a long way in reforming the credit industry. For example, most people pay more than their minimum payment every month. That extra cash will now go toward paying down card balances associated with the line of credit, said Lauren Saunders who works for the National Consumer Law Center.

Another example: The new law prevents companies from raising interest rates on existing balances unless the bill goes unpaid for more than 60 days.

"That's a big win," said Ed Mierzwinski of U.S. Public Interest Research Groups. "It gets rid of any 'gotcha' tricks."

Obama promised voters a credit card bill of rights that prevents arbitrary rate hikes and makes contracts clear, and nearly every line of the new law matches Obama's pledge. Even though the law does not prohibit interest on fees, consumer advocates who have spent years lobbying on the issue say the bill represents a major step forward for consumers. As a result, we give Obama a Promise Kept.


White House, Obama town hall meeting in Rio Rancho , N.M, May 14, 2009.

Bloomberg News, Congress Sends Credit-Card ‘Bill of Rights" to Obama , by Jeff Plungis, May 20, 2009.

Senate Banking Committee, Summary of credit card bill of rights , accessed May 22, 2009.

White House, Fact sheet on the credit card bill of rights , May 22, 2009

Interviews: Ed Mierzwinski of U.S. Public Interest Research Groups, Lauren Saunders, National Consumer Law Center, Nick Bourke, Pew Safe Credit Cards Project.

Obama's pushes credit card bill of rights

President Barack Obama brought credit card company executives to the White House on April 23, 2009, to tell them he was supporting a consumer credit card bill of rights making its way through Congress.

"I trust that those in the industry who want to act responsibly will engage with us in a constructive fashion and that we're going to be able to get this done in short order," Obama said.

Obama outlined four principles he wants to see in the legislation.

  • Strong and reliable protections against unfair rate increases, fees and penalties. "The days of any time, any reason rate hikes and late fee traps have to end," Obama said.
  • Plain language for forms and statements. "No more fine print, no more confusing terms and conditions," he said.
  • Contract terms that are easy to understand and posted online, so people can easily comparison shop.
  • More accountability. "That means more effective oversight and more effective enforcement so that people who are issuing credit cards but violate law, they will feel the full weight of the law.

The legislation is pending in Congress. We rate this promise In the Works.


White House Press Office, Remarks of the President after meeting with representatives of the credit card industry , April 23, 2009

Thomas, HR 627 , credit card bill of rights legislation, accessed April 23, 2009

Thomas, S 414 , credit card bill of rights legislation, accessed April 23, 2009