SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Credit Cardholders’ 
Bill of Rights Act of 2008’’. 
SEC. 2. CREDIT CARDS ON TERMS CONSUMERS CAN REPAY. 
(a) RETROACTIVE RATE INCREASES AND UNIVERSAL 
DEFAULT LIMITED.—Chapter 2 of the Truth in Lending 
Act (15 U.S.C. 1631 et seq.) is amended by inserting after 
section 127A the following new section: 
‘‘§ 127B. Additional requirements for credit card ac-
counts under an open end consumer 
credit plan 
‘‘(a) RETROACTIVE RATE INCREASES
AND UNI-
VERSAL DEFAULT LIMITED.— 
‘‘(1) IN GENERAL.—Except as provided in sub-
section (b), no creditor may increase any annual per-
centage rate of interest applicable to the existing 
balance on a credit card account of the consumer 
under an open end consumer credit plan. 
‘‘(2) EXISTING BALANCE DEFINED.—For pur-
poses of this subsection and subsections (b) and (c), 
the term ‘existing balance’ means the amount owed 
on a consumer credit card account as of the end of 
the fourteenth day after the creditor provides notice 
of an increase in the annual percentage rate in ac-
cordance with subsection (c).
‘‘(3) TREATMENT OF EXISTING BALANCES FOL-
LOWING
RATE
INCREASE.—If a creditor increases 
any annual percentage rate of interest applicable to 
credit card account of a consumer under an open 
end consumer credit plan and there is an existing 
balance in the account to which such increase may 
not apply, the creditor shall allow the consumer to 
repay the existing balance using a method provided 
by the creditor which is at least as beneficial to the 
consumer as 1 of the following methods: 
‘‘(A) An amortization period for the exist-
ing balance of at least 5 years starting from the 
date on which the increased annual percentage 
rate went into effect. 
‘‘(B) The percentage of the existing bal-
ance that was included in the required min-
imum periodic payment before the rate increase 
cannot be more than doubled. 
‘‘(4) LIMITATION ON CERTAIN FEES.—If— 
‘‘(A) a creditor increases any annual per-
centage rate of interest applicable on a credit 
card account of the consumer under an open 
end consumer credit plan; and
‘‘(B) the creditor is prohibited by this sec-
tion from applying the increased rate to an ex-
isting balance, 
the creditor may not assess any fee or charge based 
solely on the existing balance.’’. 
(b) EXCEPTIONS TO THE AMENDMENT MADE BY 
SUBSECTION (a).—Section 127B of the Truth in Lending 
Act is amended by inserting after subsection (a) (as added 
by subsection (a)) the following new subsection: 
‘‘(b) EXCEPTIONS.— 
‘‘(1) IN
GENERAL.—A creditor may increase 
any annual percentage rate of interest applicable to 
the existing balance on a credit card account of the 
consumer under an open end consumer credit plan 
only under the following circumstances: 
‘‘(A) CHANGE IN INDEX.—The increase is 
due solely to the operation of an index that is 
not under the creditor’s control and is available 
to the general public. 
‘‘(B) EXPIRATION
OR
LOSS
OF
PRO-
MOTIONAL RATE.—The increase is due solely 
to— 
‘‘(i) the expiration of a promotional 
rate; or
‘‘(ii) the loss of a promotional rate for 
a reason specified in the account agree-
ment (e.g., late payment). 
‘‘(C) PAYMENT NOT RECEIVED DURING 30- 
DAY GRACE PERIOD AFTER DUE DATE.—The 
increase is due solely to the fact that the con-
sumer’s minimum payment has not been re-
ceived within 30 days after the due date for 
such minimum payment. 
‘‘(2) LIMITATION ON INCREASES DUE TO LOSS 
OF
PROMOTIONAL
RATE.—Notwithstanding para-
graph (1)(B)(ii), the annual percentage rate in effect 
after the increase permitted under such subsection 
due to the loss of a promotional rate may not exceed 
the annual percentage rate that would have applied 
under the terms of the agreement after the expira-
tion of the promotional rate.’’. 
(c) ADVANCE NOTICE OF RATE INCREASES.—Section 
127B of the Truth in Lending Act is amended by inserting 
after subsection (b) (as added by subsection (b)) the fol-
lowing new subsection: 
‘‘(c) ADVANCE NOTICE OF RATE INCREASES.—In the 
case of any credit card account under an open end con-
sumer credit plan, no increase in any annual percentage 
rate of interest may take effect unless the creditor pro-
vides a written notice to the consumer at least 45 days 
before the increase takes effect which fully describes the 
changes in the annual percentage rate, in a complete and 
conspicuous manner, and the extent to which such in-
crease would apply to an existing balance.’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after the item relat-
ing to section 127A the following new item: 
‘‘127B. Additional requirements for credit card accounts under an open end con-
sumer credit plan.’’. 
SEC. 3. ADDITIONAL PROVISIONS REGARDING ACCOUNT 
FEATURES, TERMS, AND PRICING. 
(a) DOUBLE CYCLE BILLING PROHIBITED.—Section 
127B of the Truth in Lending Act is amended by inserting 
after subsection (c) (as added by section 2(c)) the fol-
lowing new subsection: 
‘‘(d) DOUBLE CYCLE BILLING.— 
‘‘(1) IN GENERAL.—No finance charge may be 
imposed by a creditor with respect to any balance on 
a credit card account under an open end consumer 
credit plan that is based on balances for days in bill-
ing cycles preceding the most recent billing cycle. 
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not 
apply so as to prohibit a creditor from—
‘‘(A) charging a consumer for deferred in-
terest even though that interest may have ac-
crued over multiple billing cycles; or 
‘‘(B) adjusting finance charges following 
resolution of a billing error dispute.’’. 
(b) LIMITATIONS RELATING TO ACCOUNT BALANCES 
ATTRIBUTABLE ONLY TO ACCRUED INTEREST.—Section 
127B is amended by inserting after subsection (d) (as 
added by subsection (a)) the following new subsection: 
‘‘(e) LIMITATIONS RELATING
TO ACCOUNT BAL-
ANCES ATTRIBUTABLE ONLY TO ACCRUED INTEREST.— 
‘‘(1) IN GENERAL.—If the outstanding balance 
on a credit card account under an open end con-
sumer credit plan at the end of a billing period rep-
resents an amount attributable only to interest ac-
crued during the preceding billing period on an out-
standing balance that was fully repaid during the 
preceding billing period— 
‘‘(A) no fee may be imposed or collected in 
connection with such balance attributable only 
to interest before such end of the billing period; 
and 
‘‘(B) any failure to make timely repay-
ments of the balance attributable only to inter-
est before such end of the billing period shall 
not constitute a default on the account. 
Such balance remains a legally binding debt obliga-
tion. 
‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1) 
shall not be construed as affecting— 
‘‘(A) the consumer’s obligation to pay any 
accrued interest on a credit card account under 
an open end consumer credit plan; or 
‘‘(B) the accrual of interest on the out-
standing balance on any such account in ac-
cordance with the terms of the account and this 
title.’’. 
(c) ACCESS TO PAYOFF BALANCE INFORMATION.— 
Section 127B of the Truth in Lending Act is amended 
by inserting after subsection (e) (as added by subsection 
(b)) the following new subsection: 
‘‘(f) PAYOFF BALANCE INFORMATION.—Each peri-
odic statement provided by a creditor to a consumer with 
respect to a credit card account under an open end con-
sumer credit plan shall contain the telephone number, 
Internet address, and Worldwide Web site at which the 
consumer may request the payoff balance on the ac-
count.’’.
(d) CONSUMER RIGHT TO REJECT CARD BEFORE 
NOTICE IS PROVIDED OF OPEN ACCOUNT.—Section 127B 
of the Truth in Lending Act is amended by inserting after 
subsection (g) (as added by subsection (c)) the following 
new subsection: 
‘‘(g) CONSUMER RIGHT TO REJECT CARD BEFORE 
NOTICE OF NEW ACCOUNT IS PROVIDED TO CONSUMER 
REPORTING AGENCY.— 
‘‘(1) IN GENERAL.—A creditor may not furnish 
any information to a consumer reporting agency (as 
defined in section 603) concerning the establishment 
of a newly opened credit card account under an open 
end consumer credit plan until the credit card has 
been used or activated by the consumer. 
‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1) 
shall not be construed as prohibiting a creditor from 
furnishing information about any application for 
credit card account under an open end consumer 
credit plan or any inquiry about any such account 
to a consumer reporting agency (as so defined).’’. 
(e) USE OF TERMS CLARIFIED.—Section 127B of the 
Truth in Lending Act is amended by inserting after sub-
section (g) (as added by subsection (d)) the following new 
subsection:
‘‘(h) USE OF TERMS.—The following requirements 
shall apply with respect to the terms of any credit card 
account under any open end consumer credit plan: 
‘‘(1) ‘FIXED’ RATE.—The term ‘fixed’, when 
appearing in conjunction with a reference to the an-
nual percentage rate or interest rate applicable with 
respect to such account, may only be used to refer 
to an annual percentage rate or interest rate that 
will not change or vary for any reason over the pe-
riod clearly and conspicuously specified in the terms 
of the account. 
‘‘(2) PRIME
RATE.—The term ‘prime rate’, 
when appearing in any agreement or contract for 
any such account, may only be used to refer to the 
bank prime rate published in the Federal Reserve 
Statistical Release on selected interest rates (daily or 
weekly), and commonly referred to as the H.15 re-
lease (or any successor publication). 
‘‘(3) DUE DATE.— 
‘‘(A) IN GENERAL.—Each periodic state-
ment for any such account shall contain a date 
by which the next periodic payment on the ac-
count must be made to avoid a late fee or be 
considered a late payment, and any payment re-
ceived by 5 p.m., local time at the location spec-
ified by the creditor for the receipt of payment, 
on such date shall be treated as a timely pay-
ment for all purposes. 
‘‘(B) CERTAIN ELECTRONIC FUND TRANS-
FERS.—Any payment with respect to any such 
account made by a consumer on-line to the Web 
site of the credit card issuer or by telephone di-
rectly to the credit card issuer before 5 p.m., 
local time at the location specified by the cred-
itor for the receipt of payment, on any business 
day shall be credited to the consumer’s account 
that business day. 
‘‘(C) PRESUMPTION
OF
TIMELY
PAY-
MENT.—Any evidence provided by a consumer 
in the form of a receipt from the United States 
Postal Service or other common carrier indi-
cating that a payment on a credit card account 
was sent to the issuer not less than 7 days be-
fore the due date contained in the periodic 
statement under subparagraph (A) for such 
payment shall create a presumption that such 
payment was made by the due date, which may 
be rebutted by the creditor for fraud or dishon-
esty on the part of the consumer with respect 
to the mailing date.’’.
(f) PRO RATA PAYMENT ALLOCATIONS.—Section 
127B of the Truth in Lending Act is amended by inserting 
after subsection (h) (as added by subsection (e)) the fol-
lowing new subsection: 
‘‘(i) PRO RATA PAYMENT ALLOCATIONS.— 
‘‘(1) IN GENERAL.—Except as permitted under 
paragraph (2), if the outstanding balance on a credit 
card account under an open end consumer credit 
plan accrues interest at 2 or more different annual 
percentage rates, the total amount of each periodic 
payment made on such account shall be allocated by 
the creditor between or among the outstanding bal-
ances at each such annual percentage rate in the 
same proportion as each such balance bears to the 
total outstanding balance on the account. 
‘‘(2) ALLOCATION TO HIGHER RATE.—Notwith-
standing paragraph (1), a creditor may elect, in any 
case described in such paragraph, to allocate more 
than a pro rata share of any payment to a portion 
of the outstanding balance that bears a higher an-
nual percentage rate than another portion of such 
outstanding balance. 
‘‘(3) SPECIAL
RULES
FOR
ACCOUNTS
WITH 
PROMOTIONAL RATE BALANCES OR DEFERRED IN-
TEREST BALANCES.—
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1) or (2), in the case of a credit card 
account under an open end consumer credit 
plan the current terms of which allow the con-
sumer to receive the benefit of a promotional 
rate or deferred interest plan, amounts paid in 
excess of the required minimum payment shall 
be allocated to the promotional rate balance or 
the deferred interest balance only if other bal-
ances have been fully paid. 
‘‘(B) EXCEPTION FOR DEFERRED INTER-
EST
BALANCES.—Notwithstanding 
subpara-
graph (A), a creditor may allocate the entire 
amount paid by the consumer in excess of the 
required minimum periodic payment to a bal-
ance on which interest is deferred during the 2 
billing cycles immediately preceding the expira-
tion of the period during which interest is de-
ferred. 
‘‘(4) PROHIBITION ON RESTRICTED GRACE PE-
RIODS UNDER CERTAIN CIRCUMSTANCES.—If, with 
respect to any credit card account under an open 
end consumer credit, a creditor offers a time period 
in which to repay credit extended without incurring 
finance charges to cardholders who pay the balance