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Reining in the credit card companies

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What's in your wallet?  A ticking time bomb called a credit card.

The Democrats in Congress are starting to think about doing something about it (Kansas City Star, free registration required).

Here are some traps the “Stop Unfair Practices in Credit Cards Act” would address:

•Retroactive interest charges: It would ban the practice of charging higher interest rates on an entire existing balance, including past purchases made at a lower interest rate.

•Unjustified interest rate increases: It would limit penalty interest-rate increases to 7 percent above the prior rate if a consumer fails to make a payment on time.

•Repeat over-limit fees: It would allow card companies to charge over-the-limit fees only once, unless a consumer racks up even more purchases above the account limit.

•Fees for paying a bill: It would prohibit the practice of charging administrative fees to consumers who at the last minute pay their bills over the phone to avoid a late payment.

•Double-cycle billing: It would ban interest rate charges on balances that have already been paid on time.

I'm more inclined towards the Dave Ramsey "cut the darn things up and walk away from credit cards" approach, but something needs to happen to get under control predatory lenders, from payday loans to credit card companies.