Credit Card Companies Step-up Their Rip-Off of Americans

Joining me in sending this message to Legislators:

Americans are struggling financially, and as times get tougher we often have to rely on our credit cards to get us through. Yet the banks and credit card companies — many of which have received billions in taxpayer bailout money — continue their abusive practices, hitting customers who make their payments on time with sudden interest rate hikes and new fees. I urge you to put in place credit card reforms right now (S. 392, S. 235, S. 414 and HR 627) to prevent these abuses. In this economy, consumers can’t wait until mid-2010 for the Federal Reserve Board to implement rules that will help curb these abuses.

In recent weeks, several of the major banks and credit card companies raised interest rates and fees yet again. The media reported Capital One hiked interest rates to 17.9 percent from 12.9 percent. Citibank raised their rates an average of 3 percent. While over at Chase, customers had a “choice” of paying a $120-a-year fee and a higher minimum payment, or paying a higher interest rate. I don’t understand why interest rates for consumers are so high, when the interest rate banks charge each other for overnight loans is as low as 0 percent.

As a responsible credit card consumer, I shouldn’t be subjected to unexpected interest rate increases and fees, which only drive up my costs during these tough economic times. The Federal Reserve Board recently agreed to important new credit card reforms which would curb many of these abuses, but those rules will not go into effect until July 2010.

I can’t wait until 2010 to get real help. I urge you to pass and implement legislation now that will reform credit card tactics so my family and I can get some real financial relief. These measures include:

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— Preventing my card company from changing the rules of the game midstream. Companies shouldn’t be allowed to arbitrarily hike the interest rate on my existing balance. A deal should be a deal.
— Requiring card companies apply my payments fairly across my different balances, not just to the lowest-interest balance. That’s just common sense.
— Controlling the size and duration of penalty interest rates. Companies shouldn’t be able to keep me at usurious interest rates forever only for one late payment or another minor infraction.
— Ending abrupt reductions in my credit limit, which negatively affects my credit score through no fault of my own.
— Providing an adequate amount of time to pay my bill on time by requiring my bill be sent out no later than 21 days from the due date.
— Preventing fees just to pay my bill online or on the phone.
— Ending aggressive marketing of credit cards to young people who need a chance to establish themselves without a heavy debt burden.

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As you work to help our nation’s businesses recover from this economic recession, I urge you to also help American families fairly pay down their debt and stabilize their personal economic situation. Please pass credit card reforms now. Families can’t afford to wait another year-and-a-half for an economic rescue.

Stop credit card companies from ripping-off Americans.

Comments

  1. Bluesman2007

    “The contract you entered into has everything to do with it.”

    The “contract” which you so slavishly refer to would, in court, be deemed a contract of adhesion. You’re not on par with the banks as far as negotiating that contract. That means, either you sign it and accept the terms (even if they’re written in such tiny print that no one but Superman can read them or you get no credit card. Disagree with the terms and conditions? Tough buns. No credit card.

    They are contracts of adhesion much the same as those parking lot “contracts” you get when you park your car. That “contract” says they’re not responsible for any damages to your car. That’s not true. They are. Those contracts can NOT be used to bargain away your legal rights.

    Businesses do try though. LOL. They try really hard. They try to limit their warranty liabilities all the time but they can NOT bargain away common law and statutory rights.

    Right now the banks are punishing consumers for the BANKS’ misdeads and not for consumer abuse and they should be called to task for it.

    Right now the banks are STILL hoarding money given to them by the stimulus bill. I’m against the stimulus in principal because it rewards bad behavious. Period.

    Personally, I think the stimulus should have gone to the people – i.e. trickle UP and not down. Decades of experience and countless economists have tabbed trickle down economics as voodoo economics and for damned good reasons.

    If the PEOPLE have the money,they spend it. THAT will stimulate the economy.

    In these tight times people have slowed discretionary spending to a bare minimum and THAT is what’s holding back any recovery. I don’t think banks other other financial institutions rewarding CEOs billions in bonuses is going to fix anything. Since when do reward CEOs for failed practices? Am I the only here who thinks this is utterly and completely bassackwards?

    If MY business fails, should I be rewarded or should I be forced to do a better job? you tell me!

  2. pstern

    Not totally true, zereal.

    You can use credit cards intelligently by paying off the balances of your purchases every month. Then it’s a convenience [you don’t have to carry a lot of cash] and you are not charged interest, fees and/or penalties.

  3. zerealbigboss

    There are invariably always good ways with anything, and level-headed use of a credit card, as apparently you do, makes it a positive instrument. In order to keep a grip on the market where credit cards are not liked, in many countries (Western Europe, New Zealand) banks issue debet cards; with these one pays as with a credit card, but the amount is at the moment of payment written off from the bank account and transferred immediately to the seller’s account. In such case one can only spend what one actually has.

  4. gazelle1929

    Beyond that, even, I use credit cards both in self defense and as an offensive weapon. Merchants add on a fixed percentage to cover the costs of accepting credit cards. You and I and everyone else pays this fixed percentage, but there are a couple of things you can do about it.

    I charge almost everything I buy onto one or two credit cards, then pay off the balance every month. Each credit card pays me back as a cash rebate a floating percent of what I charge. I just recently deposited to my savings account two checks totaling over $500, representing about five months of purchases. Where’s this money coming from? See first paragraph.

    I also use the credit card as a bargaining tool on major purchases. It costs me exactly nothing to offer cash for large purchases in exchange for a negotiated reduction in the price of the item. My spouse recently purchased a $600 chair and we got four percent off for giving them a check. That’s $24 kept in my pocket, which beats hollow the 1 percent “kickback” from the credit card company.