2009-05 (May)
May 27, 2009
Credit Card Protection
Consumers are faced with several choices when they pay for their purchases; cheque, cash, debit or credit card. Approximately 25 million Canadians have credit cards, and while most of them pay their balance in full when the bill arrives, others who can’t or miss a payment face high fees.
When Canadians make the choice to use a credit card, they don’t expect to sign away all their rights. As promised in the January Budget, Canada’s Economic Action Plan, our Government is helping consumers with strong new consumer protection rules. Canadians shouldn’t need a magnifying glass and dictionary to read their credit card agreement or application, and they shouldn’t have to be a lawyer or economist to understand them either.
We want to ensure that Canadians who are unable to pay their balance are treated fairly, that interest rates and penalties are clearly shown, and that companies use only appropriate debt collection practices. The new proposed rules include:
•· Summary Boxes on Contracts and Applications will help improve disclosure to consumers by clearly stating key features such as interest rates and fees
•· Clearer Implications of Minimum Payments by improving consumer awareness of the time it would take to fully repay loans if only the minimum payment is made each month
•· Timely Advance Disclosure of Interest Rate Changes to protect consumers from sudden and poorly disclosed interest rate hikes.
In addition, the proposed new regulations will limit other business practices not beneficial to consumers, including:
•· Minimum 21 Day Grace Period: all new purchases made within that period to remain interest free so long as the consumer pays their balance in full by the due date
•· Lower Interest Costs with mandatory allocations of favoured consumer payments
•· Express Consent for Credit Limit Increases
•· Limits on Debt Collection Practices
•· Prohibit Over-The-Limit Fees by restricting fees due to merchant holds placed on credit cards, protecting consumer from inadvertent fees they are not responsible or aware of.
I believe the changes we are proposing are an important first step. Parliament is formally examining these important issues, as both the House of Commons Standing Committees (Finance and Industry and Science and Technology jointly) and a Senate Standing Committee (Banking, Trade and Commerce) are currently holding in-depth examinations. I support these undertakings, and I am looking forward to the reports on their findings.
Please contact my Constituency office for assistance or for information on federally related matters, postage free at: #6, 4612 - 50th Street, Ponoka, T4J 1S7, tel: (403) 783-5530; toll free: 1-800-665-0865 or visit my web site: www.blainecalkinsmp.ca
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