Obama urges credit-card industry to end unfair practices

WASHINGTON - US President Barack Obama Thursday met leaders of the credit-card industry, urging them to end unfair practices that are raising costs on indebted consumers, while US lawmakers are considering a wider crackdown on the sector.

Obama said he hoped to create a new system that ‘eliminates some of the abuses’ including sudden interest-rate hikes and late-payment fees, which have added to unmanageable debts for some US consumers.

‘There has to be strong and reliable protections for consumers,’ Obama said after a meeting with a dozen executives from US credit card firms and banks.

The credit-card industry has become embroiled in the wider financial crisis in the United States. Defaults on credit-card debt have more than tripled since the end of 2006.

A congressional panel Wednesday approved legislation clamping down on ‘unfair and deceptive’ practices by credit-card companies. The measure would restrict penalties on cardholders and bar interest-rate increases without advance notice.

Nearly half of all US families owe money on their credit cards. The average balance in 2007 was $7,300, according to the Federal Reserve.