Credit card companies face stricter regulations designed to help consumers under a sweeping reform bill signed by President Obama last week.
The reform measures include restrictions on interest rate increases, penalty fees and offering credit to college students.
The banking industry lobbied hard against the bill, but proponents of the changes say loose regulations on credit cards helped create the economic crisis the country faces now and have kept consumers from digging out of debt during the recession.
At the bill signing May 22, the president called the credit card reforms “common sense.”
“We’re not going to be giving people a free pass and we expect consumers to live within their means and pay what they owe. But we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives,” Obama said, reported USA Today.
With no cap on interest rates or fees, some consumer groups say the new regulations do not go far enough.
About 90 million American households carry credit cards, with an average debt load of more than $10,500, according to CardTrak.com
This article was submitted by Katie Kapler, Director of Online Strategy for Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to firstname.lastname@example.org.