Credit Card Fraud
I’ve done some research on the predatory practices of credit card companies. Here a just a few:
1. Under current rules, credit card companies can increase your rate, sometimes to over 30%, if you are late on ANY payment, even your electric bill. This practice is called “universal default”. It is nothing more than legal loan-sharking.
2. Banks can go back a month and charge interest in balances you’ve already paid. Credit card companies found this loophole in the Truth in Lending law.
3. Credit card companies can apply your payment to the lowest interest portion of your balance. For example, your credit card may have a zero percent balance transfer and a 12% APR for purchases. Some may also have cash advances at an even higher rate of 20% APR or more. Credit card companies can increase the amount of their profits using the practice of paying the lowest interest portion first.
I’m hearing rumbles that the Federal Reserve (NOT to be confused with the Federal Government) is looking to initiate rules against such practices. Don’t hold your breath waiting for the legislature to address these problems. Many congressmen are tied in with the banking lobbyists, and they benefit greatly as a result. We are no longer a government of the people; we are a corporate-run government.
It’s interesting to note that the CEO of Master Card, Robert Selander, made over $15,000,000 in salary, deferred compensation, stock options and other compensation in 2006. Kenneth Chenault, CEO of American Express made over $26,000,000 in 2007. I’m not opposed to CEO’s doing well financially; I AM opposed to using legalized predatory practices to help them get there. And remember, store credit cards charge some of the highest interest rates, and most use a credit company like Citibank to handle the credit they offer to consumers.
The best thing we can do is to be smart consumers. Don’t let credit card companies take advantage of you. Many people get rich from the interest we pay. The convenience of getting what you want right now is costly, so don’t let the legal loan sharks take away your hard-earned money!
