Sweeping Credit Changes

Sweeping changes on tap for consumers

Like most of the country Mississippi has seen an increase in credit card use because of the spiraling economy. But as MPB's Lawayne Childrey reports new legislation will protect debt -ridden consumers from many of the surprise charges common in the industry.

Congress easily passed a new bill that restricts when and how a credit card company can raise an individual's interest rate, who can receive a card and how much time people are given to pay their bill. Sherry Rainey with the Consumer Credit Counseling Service calls it a move in the right direction.

“Through this a lot of people are able to get back on a good footing to help repair damaged credit ratings. Or to help regain purchasing strength by knowing there is going to be a fair playing field for them. And that there won’t be these predatory lending practices continuing that sometimes people have fallen prey too.”

Under the new law banks may have to make up the cost somewhere. Many believe cardholders who pay their balance in full each month could see new annual fees and lucrative rewards programs canceled. But Michael Booker, President of Bancorp South doesn't believe the new changes will impact how Mississippi banks are already doing business.

“What we’ve done historically is when it comes to issuing credit cards we’re careful on the front end. In terms of who gets them and what the credit reports are to begin with. So our delinquencies have been half the industries norm. We’ve had good experiences with credit cards for years. But again it’s because we’re careful on the front end when we issue those cards.”

The bill which goes into effect in nine months would also require people under 21 to prove first that they can repay the money or that a parent or guardian is willing to pay off their debts if they default. For MPB News, I'm Lawayne Childrey.