Obama Calls for Government Mandated Credit Card Ratings

U.S. Senators Barack Obama and Ron Wyden plan to introduce legislation next week that would create a national ranking system for credit cards. The proposed system would have scale of one star to five stars, with each card’s rating based upon how much risk the card poses to borrowers. For instance, credit cards that allow the issuing bank to raise the interest rate at any time for any reason would receive the lowest rating of one-star. The idea is to allow consumers a quick way to gauge the riskiness of a credit card offer without having to pore over the fine print.

The credit card rating system is part of Obama’s larger financial blueprint, which includes a credit card bill of rights that would ban unilateral changes to the credit card agreement, prohibit changes in interest rate on already inccurred debt and ban interest on late fees.

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