RIO RANCHO, N.M. — President Barack Obama on Thursday called on Congress to send him a bill by Memorial Day that would curb what he described as abusive credit-card practices in which lenders raise interest rates and slap consumers with high fees.
Obama said such industry tactics are exploitative and need to be stopped through new legislation.
“You should not have to worry that when you sign up for a credit card you’re signing away all your rights,” the president said at a town-hall-style meeting in a high school gymnasium.
Legislation aimed at preventing credit-card companies from mistreating customers is moving through Congress.
Obama decried practices such as promising people low interest rates “while keeping the right to raise those rates at any time for any reason — even on old purchases.”
Introducing the president was an Albuquerque resident who conveyed a frustrating encounter with her credit-card company. The woman, Christine Lardner, has two daughters in college.
Pinched financially, Lardner and her husband have started using a credit card to pay some college expenses. When the card neared its limit, they contacted the school and tried to switch to another card, but it was too late. After the old card was mistakenly charged, the credit-card company tripled their interest rate to nearly 30 percent.
Lardner had sent a letter to the White House describing her predicament, leading to her appearance at the event Thursday.
Obama said he empathized.
He laid out principles he believes to be important in creating a more responsible credit-card industry. One was transparency. He said no one should need specialized legal expertise to understand the fine print of a credit-card contract.
“We’re going to require clarity and transparency from now on,” he said, and added: “Enough is enough. It’s time for strong, reliable protections for our consumers.”
Obama also said that consumers may need to rethink spending practices.
“This is not free money; it’s debt,” he said. “And you shouldn’t take on more than you can handle.”
