TYLER, TX (KLTV) - The House already passed it, but some financial experts are not sold on some proposed new rules for credit card companies. The Senate is working on an amended version of the Credit Card Bill of Rights, which would tighten restrictions on what creditors can do on your bills. But, some East Texas experts say be careful what you wish for. President Obama wants Congress to finish a credit card reform bill by Memorial Day. But, some credit experts are calling the bill nothing more than a quick fix.
"There will be a reduction in the availability of credit by about two trillion dollars," said Scott Talbott, the Senior VP for the Financial Services Round Table. "Let me say it again, that's a reduction in credit by two trillion dollars, and that hurts Americans who need credit."
That means everybody. Credit experts say stricter regulations on credit could discourage credit card companies from lending in the future.
The tougher regulations would actually take place this year, three months before a law currently on the books, which isn't set to kick in until 2010.
The Credit Card Holder's Bill of Rights will end arbitrary rate increases. It will allow consumers to set hard credit limits and it will protect consumers from due date gimmicks.
But experts say if the credit industry is restricted from adjusting interest rates based on the consumer's credit history, they will have no choice but to set higher fixed rates for everyone.
"What that will mean is everyone who would have qualified for a credit card at 10,11,12 or 13 percent, will not be able to get a credit card," said Talbott. "And, everyone who would have qualified at 10 is now paying 15 percent."
Credit Counselor Glyndel Corzine says the responsibility lies with the consumer.
"I think many times people try to borrow their way out of debt, and you can't do that," said Corzine. "You know, if you're struggling, you don't need to open another account to try to take care of debt."
And East Texans we talked to agree.
"If they can't get it off their card or use their card or use their card for the purpose that they need it, then why, like I said, why go through with this if its still not going to help us," said Porche Roberts.
"I know my monthly payments," said Dominic Lozano. "I know what I make, and these people need to work their way out of debt and they need to pay it off. The government should not be helping these people in anyway."
Last week, the American Bankers Association wrote a letter to Congress stressing their objections to the amendments proposed by the Senate.