Credit card industry needs more oversight, critics say

WASHINGTON - It's time the federal government began protecting Americans from unsafe credit cards, just like it does from unsafe toasters and cars, consumer groups told a Senate panel Thursday.

Credit card companies routinely offer cards that have been loaded up with tricks and traps that consumers don't know about or understand, causing millions of Americans to become hopelessly mired in debt, Harvard law professor Elizabeth Warren told the Senate Banking, Housing and Urban Affairs Committee during an oversight hearing on the credit card industry.

Those tricks and traps include hiking interest rates when a cardholder falls behind in payments to other creditors, charging fees for payment by telephone and a practice called double-cycle billing. That's when a cardholder, for example, pays off $90 of a $100 charge but in the following month the bank charges interest on the entire amount rather than on the $10 balance.

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