Tighter regulat needed if credit card companies don't mend ways -- lead Detroit Free Press editorial

[Bozita]

http://www.freep.com/apps/pbcs.dll/article?AID=/20071209/OPINION01/712090572/1069

Minimum due: Fairness

Credit card companies must end deceptive practices or face tighter regulation

December 9, 2007

It was not easy for Janet Hard to air her family's financial laundry in the very public setting of a U.S. Senate hearing last week. But the Freeland, Mich., woman helped expose one of the more onerous and underpublicized practices of credit card companies.

A registered nurse who has chosen to give up an income and be a stay-at-home mom to her two teen sons, Hard, 42, told U.S. Sen. Carl Levin's investigations subcommittee how she and her husband, Bill, a steamfitter/welder, "used credit cards to make ends meet when we needed to."

"Maybe this wasn't the best decision," she said. "Maybe we could have been more frugal with our money, but we were paying our bills on time and keeping our heads above water."

Then Hard noticed that despite always paying more than the minimum balance on a Discover card, she was hardly denting the balance. A check with the company revealed Discover had raised her interest rate from 18% to 24.4% after deciding, based on a credit check, the Hards were becoming a higher risk. Based on what? Other credit card debts and available balances on inactive accounts. As a result, $176 of every $200 Hard was sending in was going for interest.

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[flashl]

1. The other partner in the financial meltdown

Credit-rating agencies.