The U.S. Senate Banking Committee has signed off on legislation banning abusive practices by the nation's credit card issuers, a move Montana Senator Jon Tester says will help restore "com¬mon sense and honesty" to the indus¬try.

The measure approved last week is called the Credit Card Accountability, Responsibility and Disclosure Act, also known as the Credit CARD Act.

The measure includes language by Tester to outlaw the practice of univer¬sal default. Universal default is the practice by credit card companies of changing terms, such as raing inter¬est rates, on customers if their credit scores fall for any reason, even if those customers pay their credit card bills on time.

"This legislation puts common sense and honesty back into the credit card industry," said Tester, who serves on the Senate Banking Committee. "Too many Montanans have been getting ripped off by the credit card industry and that's not the way Montanans do business. This bill will establish a new set of standards at a time when hard¬working, honest folks are getting squeezed by this tough economy."

In addition to banning the practice of universal default, the Credit CARD Act also protects customers who pay their bills on time. The act outlaws interest charges on debt paid on time. The measure also gives customers another week to pay their monthly bills by requiring credit card statements to be mailed three weeks before the bill is due rather than the current two weeks.

The Credit CARD Act will also limit fees and penalties. The legislation out¬laws interest on transaction fees such as late fees and over-limit fees. It pro¬hibits companies from charging fees for customers who pay their credit card bills via phone, over the internet or by mail.

The act requires companies to give customers 45 days' notice of any interest rate increase and requires compa¬nies to let customers know of any changes when they renew a credit card.

The legislation requires most credit card applicants under the age of 21 to get a signature from someone willing to take responsibility for the debt, such as a parent. It also limits credit card offers to customers between the ages of 18 and 21.

"I believe in personal responsibility, but I also believe in honest, fair busi¬ness practices," Tester said. "Credit cards are a fact of life in Montana and across America. There's no room for abuse in the industry."