Bayh fighting for new credit card laws

Indiana Senator Evan Bayh is among lawmakers in Washington pushing legislation that cracks down on credit card companies.

24-Hour News 8 spoke with Senator Bayh about the legislation Wednesday afternoon. Sen. Bayh said credit card companies are unfairly squeezing middle class Hoosiers, that's where new legislation comes in.

"I've been getting hundreds of calls and letters and e-mail from people who are outraged at the abuse and practices of credit card companies," Bayh said Wednesday. "They're trying to make as much profit as they can. I guess we shouldn't expect anything else from them, but when it comes to abusive practices where your viewer has done nothing wrong, paid their bills on time, jacking up the rates isn't right."

The U.S. House has already passed its version of the legislation. The similar Senate version forces companies to send out billing statements at least a week earlier and keeps them from raising rates for no good reason, among other things.

Experts say the average household has close to $10,000 in credit card debt alone. And the interest rates are unbelievable.

"Interest rates as high as 36% is what we're seeing," said Cynthia Pratt of Momentive Consumer Credit Counseling. "36%, not unusual at all," she added.

Pratt said new rules on credit card companies are in order. She said the National Foundation for Credit Counseling has just gotten credit card companies to create hardship programs for delinquent payers.

"I would say that like the rest of the world, there's an element of greed that took over and if we can do it, we're going to do it. And that's kind of where it just became rampant. I don't think anybody set out to be evil. I think it was just like the rest of the financial world. It took on a life of its own," Pratt said.

By the way, Momentive said a good rule of thumb is that all of your credit card balances combined should be no more than 30% of your total credit card limit. Sen. Bayh said they're now working out a compromise that should pass the Senate. After that, the measure moves on to President Barack Obama who asked for it and is expected to approve it.