By Justin McHenry

Credit card companies found themselves in the Senate’s hot seat again yesterday, as representatives from Bank of America, Chase, and Citi all were asked to justify various card industry practices that senators deemed harmful to consumers.

One of the more dramatic pieces of testimony came from an Ohio man whose balance ballooned to more than double its original amount after Chase continued to hammer him with late fees even while he was making payments to try to trim the balance.

Senator Carl Levin of Michigan accused card companies of “nickel-and-diming tens of millions” of consumers through fee and interest policies that were difficult to understand or buried in the fine print of credit card agreements.

It’s unclear how far the Senate is prepared to go to regulate card practices, but the frequent and public floggings of card companies by the senators may prove to be enough to change the industry’s ways. In late February, Chase announced it would eliminate two-cycle billing, a practice of calculating interest over a two-month period that made it possible to charge interest on already-paid balances. Last week Citi announced it would drop a clause nicknamed “universal default” which allowed them to raise card rates on customers who were late on bills completely unrelated to their credit cards.

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