[ti:Economics Report]
[ar:Voice of America]
[al:VOA News English]
[by:WWW.51VOA.COM]
[00:00.00]This is the VOA Special English 
[00:03.22]Economics Report.
[00:04.90]A bill to place new restrictions 
[00:08.02]on the credit card industry 
[00:10.23]in the United States 
[00:12.14]won final approval this week in Congress.
[00:15.66]The measure went to President Obama 
[00:18.71]to sign into law with popular support,
[00:22.14]except among banks.
[00:24.77]Credit card companies will have to 
[00:27.91]inform cardholders forty-five days 
[00:31.64]before they raise interest rates 
[00:34.11]or change other important terms.
[00:37.69]The new act will also bar companies 
[00:41.93]from raising rates on existing debts 
[00:45.13]unless payment is at least sixty days late.
[00:49.74]Also,companies will have to 
[00:53.03]send out billing statements 
[00:55.15]at least twenty-one days 
[00:57.27]before a payment is owed.
[01:00.11]They will have to tell how long 
[01:02.80]and how much it would take to pay off a card 
[01:07.19]if the holder makes only the lowest 
[01:10.37]monthly payment.
[01:12.02]And they will have to write 
[01:14.10]their cardholder agreements clearly 
[01:17.10]and publish them online.
[01:20.05]These changes,
[01:22.11]however,will not take effect for nine months.
[01:26.10]President Obama recently said it was time 
[01:29.94]for credit card reform: 
[01:32.39]"Instead of an 'anything goes' approach,
[01:35.04]we need strong and reliable protections 
[01:37.06]for consumers.
[01:38.04]Instead of fine print that hides the truth,
[01:40.48]we need credit card forms and statements 
[01:42.71]that have plain language in plain sight." 
[01:44.78]Credit card companies say the changes 
[01:47.69]will only reduce the availability of credit.
[01:51.36]These come at a time of recession 
[01:54.07]when banks are reporting billions in losses 
[01:58.31]in their credit card divisions.
[02:01.00]The president of the American 
[02:03.82]Bankers Association says the legislation 
[02:07.24]"changes the entire business model 
[02:10.63]of credit cards." 
[02:12.31]Edward Yingling says it restricts the ability 
[02:16.87]to price credit for risk -- in other words,
[02:21.05]to charge more for those more likely 
[02:24.37]not to repay their debts.
[02:27.10]Lots of people pay off their credit cards 
[02:31.25]in full each month to avoid finance charges.
[02:35.91]But industry experts say card providers 
[02:40.70]might now start charging new fees 
[02:44.45]for all cardholders.
[02:46.49]And,they say,
[02:48.32]companies could raise their interest rates.
[02:51.70]Americans held nine hundred forty-six 
[02:56.14]billion dollars in credit card debt 
[02:59.21]at the end of March.
[03:01.08]That was down from last year,
[03:04.41]but still about twenty-five percent 
[03:07.82]more than ten years ago.
[03:10.29]Elizabeth Kiss is a personal 
[03:13.92]finance specialist with Perdue University 
[03:17.34]in Indiana.
[03:18.90]She says the main value 
[03:22.03]of the new credit card act 
[03:24.39]is that it "provides an opportunity 
[03:27.52]for consumers to have more information." 
[03:31.16]But,she says,
[03:32.90]consumers have to make 
[03:34.93]their own informed decisions.
[03:37.30]In her words,
[03:39.17]"We need to know how using credit 
[03:43.12]fits into our plans and goals." 
[03:46.40]And that's the VOA Special English 
[03:50.23]Economics Report,
[03:52.00]written by Mario Ritter.
[03:54.01]I'm Steve Ember.