Lately, the evils of the credit card industry have taken a back seat to the mortgage industry. But just because we don’t hear much anymore about the trickery of the credit card companies does not mean that is has gone away. Credit card companies generate tens of billions of dollars every year from fees. They collect these fees from consumers who use the cards. But fees are also collected from businesses that accept the cards. And eventually, the fees that are collected from businesses are passed down to the consumer in the form of higher prices.

Not only do the companies make money from fees, but they also make billions in interest. And I have got a story of my own about how I got taken with credit card interest payments.

About 6 years ago, I used a MBNA line of credit/credit card blend kind of thing to purchase a computer. The computer cost about $1,500 and my goal was to pay it off in a year. So every 10^th of the month, like clock work, I wrote out the check for $135, more or less, and mailed it to MBNA.

While I was in the process of paying off that debt, I was also paying on another credit card debt. And about four months after purchasing the computer, I had finished paying off the first debt. I had reached a milestone towards eliminating my debt, I was happy. The only credit bill I had left was for the computer.

Within 3 weeks of my paying off the first card, I got a notice from MBNA that my interest rate would increase in 30 days. I could not understand why they would increase my interest. I had never been late on a payment and I paid way more than the minimum.

By the way, my rate increased from about 12% to about 25%! I kid you not. It more than doubled over night… for no apparent reason. I figured it had to be a mistake.

So I called MBNA the next day to ask them what the heck was this all about. I had done everything right, so I was confused. And I was taken aback by what they used as justification to increase my rate. The rep told me that my rate increased because I had paid off that other credit card. I was even more baffled. I asked her what is wrong with paying off my debts. She said nothing really, but from our perspective, you now have more available credit to incur more debt.

Their logic… having more available credit put me at a higher risk to incur more debts. If I incur more debt, I may not be able to pay them back.

Seriously, I thought she was joking. That was the most ridiculous thing I had ever heard. They perceived me a larger risk because I had paid off my bills?!? But I guess those are the kinds of tactics credit cards companies use.

I was so upset with MBNA. I could not afford to pay the bill in full. And I absolutely refused to pay them 25% interest. So I transferred the remaining balance to Discover. And of course, I incurred a balance transfer fee to do so.

But anyway, these kinds of stories are the exact thing that a “credit card bill of rights” can combat. I first heard of this concept in 2000 by then presidential candidate, Ralph Nader.

Nader wanted to put an end to these kinds of practices. He also wanted to protect consumers by banning deceptive marketing and making rates, fees and billing practices transparent.

Nader’s bills of rights never came to fruition, but in 2006 a senate bill was introduced which offered similar rights. That bill did not make it very far. But last week another so called “credit card bill of rights” passed out of the House Financial Services Committee.

This bill would force credit card companies to give a 45 days notice when they intend to increase interest rate and would prevent retroactive rate increases. It would also require the companies to send out invoices 25 days in advance of the payment due date.

Although it is highly likely that this bill will die in Congress, I like that some of our legislators are concerned about the way big businesses continue to fleece the average American. Hopefully if we scream loud enough about the issue, we can create enough ruckus to get this bills of rights put into law.