by Joseph Kenny | 08/26/08

Credit card debt is on the rise with $850 million dollars of debt being placed on US credit card users last year. In a time where the economy is weakened world wide, forecasters are expecting this number to continue to grow. Credit cards are no longer used just for those big ticket purchases but for necessities as well such as food, utilities, and even clothing. Those with credit card debt know just how easy it is to fall into the sandpit of debt and how hard it is to climb out.

Recently, many Washington lawmakers have brought the issue of credit cards to the attention of House members. Concerned about unfair practices that take advantage of card holders these lawmakers seek to reform the credit card companies. The Federal Reserve appears to approve many of these new proposals as a way to curb the amount of card holders being taken advantage of.

While the credit card industry are understandably upset over the proposals, which include the elimination of the double cycle billing, stating that if the proposals are approved the industry would suffer. Negative effects will include restricting the chances for those with bad credit to receive a line of credit and higher interest rates placed on those card holders with good credit.

If the proposals are approved which could happen as soon as the end of the year, credit card companies will be subjected to follow a set of new guidelines. Proponents of the guidelines claim that this will allow consumers to better understand what it is they are getting into. This is all in an effort to make the credit card industry more user friendly. If the proposal is passed credit card companies may have to do away with several of their smaller fees and be able to explain how the interest rates and other fees are factored in.