EDITORIAL - Taking credit: It's time to curb the excesses of charge-card firms

President Barack Obama has added relief for consumers from abusive credit card practices to his list of necessary reforms.

Fixing the credit card situation is one more lions' den of problems in Mr. Obama's overall effort to put the economy back on track. That it is needed and that it would be very popular is clear. The games that banks and credit companies -- many of which have profited from huge federal bailouts in recent months -- have run on consumers are among the painful financial trials that ordinary Americans are facing.

The credit providers raise interest rates on existing balances to stratospheric levels, at a time when borrowing rates for the companies are at a historical low. There are hidden fees and unexpected penalties. Collectively there is no restraint on the dangerous credit they offer sometimes inexperienced, young and unwise consumers. Who doesn't receive numerous solicitations in the mail to apply for "pre-approved" new accounts, regardless of the recipient's current credit card balances?

Yet with an economy spiraling downward in part because people, fearful for their jobs, are holding onto their money more tightly than usual and with financial institutions' lending at least partly frozen, shutting down credit card usage unnecessarily could be the straw that breaks the camel's back.

So this is a policy area into which the Obama administration should venture only carefully. Both the House of Representatives and the Senate have legislation, supported by the White House, that could be passed rapidly. Congressional Republicans, responsive to the credit card companies, are opposed to the proposals, however. One provision would limit retroactive interest rate increases without notice and if the cardholder is current in his payments. Others would prevent cards from being marketed or issued to borrowers under 18 or 21, depending on which bill is approved. Another proposal would ensure that a consumer's payments are applied to debt with the highest interest rate first.

As long as the limits are sensible, we see no reason to oppose the reforms. America's addiction to credit cards is certainly part of its economic problem. People should be mature enough to avoid getting pulled under by it. But they haven't been, particularly in hard times, as rising bankruptcies indicate. New restrictions on the companies and banks peddling the cards should help.