Econ4U Supports Efforts to Make Credit Card Bills Fairer, More Transparent

WASHINGTON D.C. May 13, 2009 - Econ4U today expressed its support for rules currently being considered by the United States Senate, which would make credit card bills more transparent and protect borrowers from hidden fees.  While we do not endorse all the aspects of this legislation, the bill contains some core reforms that will empower people to make responsible decisions with their finances. 

The two key provisions that will help borrowers throughout the country are:

1. Less tiny print: For starters, you can say goodbye to tiny and unreadable fine print: all disclosures must be in 12-point font or larger. This is such a no-brainer it's hard to imagine anyone but magnifying glasses manufacturers opposing it.

2. No sudden/arbitrary rate increases: When you sign up for a credit card, or any other loan, you expect to know the interest rate you'll be charged. Recently, however, a lot of credit card customers have been surprised with arbitrary rate increases, even if they never missed a payment. Under the new law, if you are carrying a balance at 10% fixed APR, you'll know that interest rate won't change (unless your monthly payment is late, or it's a promotional rate that expired). And if it does change, you'll have at least 45 days' notice, plenty of time to look around for a better card and interest rate.

"It is important that all financial institutions make a good faith effort to ensure that contracts are easier to read, that there are no surprises lurking in the fine print, and no hidden fees.  Borrowers who make their payments in full and on time should not have to fear surprise, arbitrary rate increases," said James Bowers, Managing Director of the Center for Economic and Entrepreneurial Literacy.  "There is an epidemic of financial illiteracy in this country and policy makers should work to make sure that Americans have all the tools at their disposal to make wise financial choices.  If we eliminate confusing contracts and hidden fees as well as promote a renewed focus on financial literacy, the public will be better prepared to weather this financial crisis, and less likely to make the same mistakes again in the future."

The Center for Economic and Entrepreneurial Literacy, Econ4U.org, is a non-profit organization promoting financial education. Its economic education program presents facts on personal finance, business economics, entrepreneurship, and government spending in unusual venues such as movie theaters, restaurants, and bowling centers.