Credit Card Companies in US Face New Limits This is the VOA Special English Economics Report.

A bill to place new restrictions on the credit card industry in the United States won final approval this wee in !ongress. The measure went to "resident Obama to sign into law with popular support# e$cept among ban s. !redit card companies will have to inform cardholders forty%five days before they raise interest rates or change other important terms. The new act will also bar companies from raising rates on e$isting debts unless payment is at least si$ty days late. Also# companies will have to send out billing statements at least twenty%one days before a payment is owed. They will have to tell how long and how much it would ta e to pay off a card if the holder ma es only the lowest monthly payment. And they will have to write their cardholder agreements clearly and publish them online. These changes# however# will not ta e effect for nine months. "resident Obama recently said it was time for credit card reform& 'ARA!( O'A)A& *+nstead of an ,anything goes, approach# we need strong and reliable protections for consumers. +nstead of fine print that hides the truth# we need credit card forms and statements that have plain language in plain sight.* !redit card companies say the changes will only reduce the availability of credit. These come at a time of recession when ban s are reporting billions in losses in their credit card divisions. The president of the American 'an ers Association says the legislation *changes the entire business model of credit cards.* Edward -ingling says it restricts the ability to price credit for ris %% in other words# to charge more for those more li ely not to repay their debts. .ots of people pay off their credit cards in full each month to avoid finance charges. 'ut industry e$perts say card providers might now start charging new fees for all cardholders. And# they say# companies could raise their interest rates. Americans held nine hundred forty%si$ billion dollars in credit card debt at the end of )arch. That was down from last year# but still about twenty%five percent more than ten years ago. Eli/abeth (iss is a personal finance specialist with "urdue University in +ndiana. She says the main value of the new credit card act is that it *provides an opportunity for consumers to have more information.* 'ut# she says# consumers have to ma e their own informed decisions. +n her words# *0e need to now how using credit fits into our plans and goals.* And that,s the VOA Special English Economics Report# written by )ario Ritter. +,m Steve Ember.