VALHALLA -- Congresswoman Nita Lowey (D-Westchester/Rockland) Monday called for passage of federal legislation that would end “egregious billing practices” of credit card companies, like “universal default” and “double cycle billing,” which make it difficult for individuals and families to escape a cycle of debt.

“Families and individuals are sinking into credit card debt, and the problem is especially severe for college students,” said Lowey.  “Credit card companies should not be permitted to use deceptive and unfair billing practices that can put financial security out of reach, especially for college students who are being forced to start their financial independence severely in the red.  Congress should take steps immediately to protect consumers by cracking down on these practices.”

As prices for consumer goods rise, more Americans – particularly college students – are forced into credit card debt to make ends meet.  The average outstanding balance on undergraduate students’ credit cards is $2,169, and the average interest rate for standard bank credit cards topped 19 percent last year.

Mounting debt is compounded by abusive practices like “universal default,” or interest rate increases based on a cardholder’s other accounts, and “double-cycle billing,” or assessing interest on all charges made in a month when the entire balance is not paid in full.  Companies also may offer introductory interest rates that rise dramatically without the cardholder’s knowledge.

Lowey called for enactment of the Credit Cardholders’ Bill of Rights Act in Congress. The legislation would prohibit universal default and double-cycle billing.  It would also prevent credit card companies from unfairly targeting minors, require 45-day notice of interest rate increases, and require payments to apply to the higher interest rate if there are two separate rates applied to bills.  The legislation would also allow cardholders to set a ceiling on their credit limit, preventing students from getting in over their heads.