The Senate Credit Card Bill Will Have a Dramatic Impact on Credit Card Users

President Obama has been on board with efforts by Congress to institute rules that are a bit tougher than those issued by the Federal Reserve last December (and that don't go into effect until July of next year). Today, the Senate passed a version of a bill instituting new credit card rules. CNN Money reports on the main restrictions in the credit card bill:

The Senate's bill would take effect in nine months and make it harder for people under age 21 to get credit cards. It would also ban rate hikes unless a consumer is more than 60 days late - and then restore the previous rate after six months if minimum payments are made.

The Senate did stop short of putting a cap on interest rates that could be charged. But it is a definite step forward when the credit card companies now (or at least in 9 months when this takes effect) have to have a reason to hike your rate. I wonder, though, how many credit card issuers will hike interest rates now, while they can...

At any rate, the credit card industry is upset. Especially since 18-year-olds without a credit history now have to get a co-signer in order to get a card. CNN Money reports on the credit card industry's response to this legislation:

"We are concerned that the Senate bill will have a dramatic impact on the ability of consumers, students, and small businesses to obtain and use credit cards," said American Bankers Association president Edward Yingling

Honestly, that's probably not a bad thing. Consumers probably shouldn't have the same easy access to credit that has been enjoyed in the recent past. Indeed, making credit harder to get will force consumers to carefully think about what they are using the credit for, and why they really need. This whole recession, and the side effects from it -- not to mention lessons learned from the financial crisis -- should help individuals better plan their finances and make wiser decisions.

An economy in which we can't get really easy credit may not grow at a ridiculus pace, but it will still grow, and it will be an economy that is more beneficial to the rest of us.