Obama leans on credit card execs

President Obama met Thursday with more than a dozen executives of credit card-issuing companies to press his campaign for more protections for consumers. We all know what he's talking about: You open your card statement just to find out your rate has been tripled without explanation - even when you pay your monthly bills on time.

Already, Congress is moving to tighten the reins on issuers with legislation that restricts rates and fees the companies can charge cardholders. And, that's on top of changes enacted by the Federal Reserve taking effect next year that will stop interest rate hikes on cardholders who are late on unrelated bills; and halt averaging of finance charges from two prior cycles - a move designed to hit consumers who carry a balance then pay it off.

The Obama Administration wants to crack down on what many Americans consider unfair practices, including the tendency of credit card companies to rewrite the rules for lending. Since many of the issuers are in fact banks and other financial institutions taking government bailout money during this current financial crisis, the President probably feels like he has some leeway with their executives. In summary, here is what Obama wants the card companies to do:

1) Ban unfair rate increases, abusive fees and penalties. Too often cardholders are slapped with rate increases - reaching as high as 29 percent in many cases - or added fees, often for arbitrary reasons. The credit card companies say they need to be able to raise rates and fees to offset the risky behavior of cardholders, but many Americans think credit companies abuse this practice.

2) Use plain language in the terms and conditions; get rid of all that "fine print." Who wouldn't want more clear and concise contract terms written in plain English? Everyone wants this, except perhaps the credit card companies themselves.

3) Post contract terms online, and enable easier comparison shopping. Make it easier to for consumers to shop for terms and rates that suit their individual lifestyles and situations.

Predictably, the credit card companies hate such limitations, and complain that new restrictions will only reduce the amount of credit they can offer consumers. True enough, but is that such a bad thing? For far too long, Americans have spent too much and saved too little with almost "free" money doled out by credit card companies.

A little less credit might be what the doctor ordered to get us into a more healthy state of spending - and saving. Many complain that the system we live with now forces us to use credit card; good luck trying to check into a hotel, or renting a car without one. A future home buyer is compelled to use credit cards to start building his credit history.

That’s still not an excuse for us consumers to go out and spend money - credit - irresponsibly. Both issuers and consumers share blame for the uses and abuses of credit cards.

Ali Velshi is CNN’s Chief Business Correspondent.