by Joseph Kenny | 02/14/08

A Colorado Congressman is lobbying for legislation that would provide extra protection for credit card customers. Rep. Mark Udall, a Democrat from Boulder who's running for the Senate, says the proposal amounts to a credit card customer's bill of rights.

Under the legislative plan, consumers would have to be told in advance of any hike in a credit card's interest rate. The proposal would also place a freeze on rate terms and fees on cancelled credit cards. The legislation would ban penalties for payments made on time, as well as fees for refraining from using the card. The plan would also bar over-the-limit fees for transactions that have been approved. Under the proposal, credit card issuers would be barred from using information unrelated to the account to hike interest rates.

Udall insists that the plan is an attempt to ensure that consumers receive a fair deal, as far as credit is concerned.

"All of us in our busy lives, without hours and hours to spend on paying our bills and studying the fine print, we need to know that the credit card companies are playing in a fair fashion," Udall said.

A number of consumer advocates have been concerned about the practices of credit card companies. In addition to charging consumers high interest rates, the companies have been known to hike rates without warning-especially when consumers fall behind on other bills. Some observers say modern-day credit cards amount to usury, with consumers being charged exorbitant rates and fees for their credit card balances.

A number of consumers, strapped by high mortgages and large student loan bills, turn to credit cards to finance their lifestyles. However, it could take them years-if not decades-to repay what they owe. As a result, their quality of life suffers as their purchase power decreases.