Hope for Credit Card Consumers (Congress holding hearings)

[RamboLiberal]

http://abcnews.go.com/GMA/story?id=2930564

In a move that could help consumers, Congress will hold hearings today to discuss the tricky fees and the baffling penalties that credit card companies use to keep their consumers paying off high interest rates and finance charges month after month.

The hearings have banks and credit card companies howling in protest.

Take the example of Derek Lee, who paid off one of his credit cards because he wanted to cancel it. Six months later, he still hasn't been able to because the card company keeps charging him mysterious fees that keep the account open.

"It's incredibly frustrating. It's unfair and it's unethical, and it has dropped my FICO credit score by 69 points," Lee told "Good Morning America."

Lee is not alone. A recent Government Accountability Office investigation targeted numerous moneymaking tactics used by credit card companies.

[snappyturtle]

1. This is wonderful (the hearings,i.e.)! n/t

[sutz12]

2. It's about time.....

When I sold my house a few years back, I paid off $27k in credit card debt. I haven't used a credit card since, with the exception of a few times when I charged a tank of gas. I haven't even done that in over a year and a half.

I don't intend to go back, either.

[CountAllVotes]

3. I just closed out all of those cards

or I dropped the credit limits to the least amount I could to keep the card open.

I was glad to get rid of MBNA and their 32% interest rate should you default even once by a single dollar (and it almost happened to me - I owned $1.60 and they changed to payment date on me!). :grr:

Who needs these cards like this?

Find another, they are out there.

I hope this "investigation" does some good but I'm not overly optimistic of any sudden changes. :(

:kick:

[lyonn]

9. Credit Card rules and regs "they" have decided is proper

is a rape of the public. We get credit card apps. every day it seems and my husband likes reading some of the fine print. The latest had a charge of about 30% or more charge for being late. Reminds me of the good old Reagan days.

We have had a card for several years that is less than 5% interest and now is near or about 9% as of next month.

[kiwilover]

11. Send Them Back

Everytime you get a credit card offer send it back by writting on the envelope: RETURN TO SENDER.
Wouldn't it be interesting to see several million piece of this garbage returned to the credit card companies and piss off the post office at the same time. We paid off all our cards and chopped them up!!!!!!!!!!

[aggiesal]

12. Don't send them back. Shread them!

A friend of mine asked why we had a shreader, thinking we were paranoid, and really didn't need one.
Until undocumented workers were found sifting through the garbage looking for Credit Applications, that have been thrown out. The next day, she bought a shreader.
We shread anything that has our name or address.

[Lochloosa]

13. Same here. N/T

[tblue37]

22. I do that , too.

Everything--including the labels on my prescription medicine bottles once they are empty, gets destroyed before going into the trash.

[aggiesal]

25. It's amazing how much we shread, ...

Anything with my name or address gets shreaded. Even if it is the most obscure mailing.

When I get catalogs, I tear the cover with my name and address, off. Then inside, I find that the order form comes pre-labeled with, again my name and address, so I rip that out as well. Throw the catalog in the re-cycle bin when I'm finished with it, and shread the cover and the order form.

When my credit cards expire, they go through the shreader.
Since I pay my bill online, when the credit card bill arrives, I shreader the return envelope. I don't want to give anyone the opportunity to determine what cards I'm using.

[sybylla]

20. Better yet - return it all in their postage paid envelope

I write across the "offer" form that they should take me off their mailing list and I send all their spam back to them in their own envelope.

That way they pay both ways. And, if they adhere to the law, you might start to see the offers diminish. It worked for me for awhile. Now I'm starting to get them again.

I had a friend who used to include nasty bits from his garbage can, too. I don't go quite that far.

[apnu]

4. Oh the irony...

As I was reading the parent, the banner ad at the top was for creditcards.com LOL

[yellerpup]

5. What other contract have you ever signed that allowed the other

party to change the rules at will? They can change the rate for any (or no) reason at all. Our representatives are supposed to be working for us, but it seems the vote of one bank CEO cancels out all the other voters. Sickening.

[bleedingheart]

26. I completely agree...it is like buying a home and having the seller

change the price after you have made your first year of mortgage payments.

That is illegal, however credit card companies do it all the time.

[yellerpup]

28. Scandalous.

I'm hoping for swift action to fixing this outrage. One day of this was too much already!

[santaclawsz]

30. There are plenty of contracts with floating interest rates

Adjustable rate mortgages come to mind.

A credit card is something you don't screw with....if you can handle it, it ends up saving you a solid amount of money and time.

Some companies like Chase are more sleezy than others. Avoid them.

[yellerpup]

32. I know what you mean.

I understand that there are contracts with floating interest rates, but I (and I would assume most people--but then I know nothing about 'most people') would never knowingly sign one. Credit card offers offer a low come-on and guarantee a rate for a certain period, but if you read the fine print, they can up the rate at will for any or no reason. That's what ahm-a talkin' about. Welcome to DU. :hi:

[Mandate My Ass]

6. How about repealing the bankruptcy bill which should have been

more aptly named the credit card usury bill.

[lyonn]

10. What an obvious bill in favor of the credit card companies,

certainly not for the people. Imagine having a huge medical bill and having to use their credit card for some basics. So this person has to file bkcy. because there is no way they could pay and save their home, etc. And who gets a break during this bkcy. proceedings? The credit card companies. What makes them special? Duh

[aquart]

14. Repeal EVERY BushCo bill. In toto. Every one. Every line.

Not one was worth toilet paper to the American people.

[Purveyor]

7. This is a very good issue to seize upon for the Democrat's as long

as they at least attempt to pass real reform and not just pay it 'lip service'.

The banking lobby is quite persuasive, however.

[lyonn]

8. Finally Dems have control of what hearings are important

For maybe 12 or more years the repubs have controlled what was to be voted on. They allowed precious few amendments. It's about time the adults took over.

[sarcasmo]

15. Kick for the Dem's taking it to these Greedy Bastards.

[aggiesal]

16. The Credit Card industry wrote this bill, and ...

obviously did it in their favor.

One of the items in this law states that if you're late on ANY bill, be it your cable, telephone, cell, electricity, water, ...
the Credit Card companies can immediately raise that nice 5% rate into that usary rate of 30%+

Everyone should take a look at your CC bill (If you have one). Just because you're paying your CC bills on time, but accidently forgot that cable bill last month, doesn't mean you're still enjoying those introductory 5% rates.

I always tell my right-wing friends everything I can about what their Republican congress did to them. My representative is Duncan Hunter. I wrote him a letter not to vote for the Bankruptcy bill, and he sent back some form letter about how average americans are taking advantage of the bankruptcy system and that this bill should correct those loopholes.

He's such a loser.

[tblue37]

23. What makes me happy is that the credit cad companies stupidly killed the

goose that laid the golden egg. Their ploy has led many people to pay off their bill and stop using credit at all (people like me!). Many others are choosing not to open credit accounts they might otherwise have opened. The credit card companies have been complaining that they are losing money because of this unforeseen blowback.

Bwahahahaha!

[AnneD]

29. ITA....

I have not charged in 4 years and have been paying off my debts (using a debt snowball). I have been able to pay off several debts last year and am working on some more this year. One day I will be debt free. and what a glorious day that will be. I am doing better just by keeping all that interest I use to pay out. Do I miss my cards-no way. I save or do installments. I keep a 1K emergency fund that takes care of disasters. Life is so much better.

[salin]

27. industry has become overtly predatory.

forget earning off of the really rich - getting a huge flow of smaller amounts from millions (through predatory practices) is much more profitable.

I find it interesting that your congressman, despite his ties to some of the congressional scandals that have pulled other congressmen down (cunningham and ney) that he has the ego to go out to seek the limelight and run for president. Fool. I doubt his political career will last four more years - (or less) and it will be his ego pulling the limelight to himself that will probably accelerate the inevitable. Just my two cents.

[dicknbush]

17. Don't Worry Credit Card Companies...Super Joe Biden will SAVE THE DAY

Biden is so bent over for the credit card companies he almost has he nose up his own butt. The credit card companies are based in Md. so Joe has to keep the cash machines pen especially now that he is in Presidential race.

[dicknbush]

18. And when they are done with Credit Card comapnies maybe they could look into

THE RIPP OFF ARTIST AT THE BANKS REGARDING THE "OVERDRAFT CHARGES" Here is a story from England about that subject.

http://money.independent.co.uk/personal_finance/loans_credit/article2067603.ece

[Sadie5]

19. Cap those interest rates

To an affordable fee for consumers so that they can pay them off. Anything under 15% sounds good compared to 30+%

[santaclawsz]

31. 15% is too low

Considering inflation had reached 10%+ as recently as 30 years ago.

The interest rate is not the problem as much as the hikes they implement.

[pinniped]

21. I mixed up the due dates and paid one bill before the other bill.

So, one was a day late and these HSBC turds are probably going to jack up the interest rates.

I have taken preemptive action and will try to transfer both HSBC balances off to a new card. These turds will be cancelled.

Check out their payment structure. Sample scenario:

On the same card, if you owe $5,000 at 5% on balance transfers, $5,000 at 10% on purchases, and $5,000 at 20% on cash advances, the higher interest rates will be intact until the lower ones are paid off. If it takes you 10 years to pay the $5,000 at 5%, the $5,000 at 10% and $5,000 at 20% will still be intact and will not have went down one cent.

It sounds like they figured out how to maximize profitability. No wonder these jerks keep sending all those "deposit into your bank account" cash advance checks.

[robinlynne]

24. go congress. it's your birthday.

[JCMach1]

33. Close down the credit rating system NOW!

and go back to DUE DILIGENCE on the part of banks and other institutions.

We have given up way too much privacy rights! The days of EASY CREDIT should die...

[rebel with a cause]

34. Related peice

CREDIT CARD COMPANIES' CHANGE OF HEART
Posted: Friday, March 9 at 05:00 am CT by Bob Sullivan

America's credit card companies: Champions of the poor? Apologizing to indebted consumers? Someone check the thermostat in hell.

What to make of this sudden, very public about-face by America's credit card companies since January in which they seem to be abandoning many of the outrageous penalty fees that have confused consumers and fattened bank bottom lines for years. Why the sudden change of heart? Were they visited by the ghost of Christmas past during the holidays, or at least, the ghost of Democratic-controlled Congress future?

<snip>

In recent months, Chase and CitiGroup both have announced they will abandon what were clearly among the most egregious fee practices by credit card issuers. But look closely, and you'll see a pattern.

In January, Sen. Chris Dodd, D-Conn., hosted a banking committee hearing on credit card fees. On the eve of that hearing, Chase announced it would discontinue two-cycle billing. That practice is so diabolical and complicated I can't really explain it here. But suffice to say that the moment you don't pay your bill in full, the card issuer will not only assess high interest rate charges on new purchases, it will actually reach one month into the past and charge interest on past purchases too. Instead of being embarrassed during the hearing by this practice, Chase was able to piously say, “We don’t do that any more.”

http://redtape.msnbc.com/2007/03/credit_card_com.html#posts

I had 2 store credit cards in the beginnig of 1998 when I lost my last full employment. I had stopped charging the year before, trying to pay the cards off. Now I was paying them off from my unemployment and then from what part time/temp jobs I had. For three years I paid them without charging any new purchases, and for three years my balance did not go down but slowly went up instead. Payments sent two weeks in advance somehow arrived late, penalty charges showed up for other reasons, etc. After three years it became apparent that I was getting no where and I was paying these companies when I could not afford to. I had paid more than three times what I owed and it had all gone toward the ever growing interest and those penalties, nothing to the priniciple. I quit paying because there was no way I could keep paying. I was out of funds and had other bills to pay. They are still after me for the $2000 that I owe and unless I win the lottery (which I never play) they will be after me until I die.