Senate Hearing Attacks Credit Cards Ridiculous Fees

[Gimpy]

http://consumerist.com/consumer/credit-cards/senate-hearing-attacks-credit-cards-rediculous-fees-242504.php

A Senate hearing today called up executives in the credit card industry to defend their anti-consumer practices, their explanations provoking laughter from the crowd.

The bank's defense concept of "trailing interest" was one such occasion for comedy. Under this scheme, if an individual owes $5,020 and pays $5,000 of it, next month they pay interest on the full $5020, not just the $20 owed. Reports Consumer Affairs:

Bruce Hammonds, president of Bank of America Card Services, Richard Srednicki, chief executive officer of Chase Bank USA and Vikram Atal, Chairman and CEO of Citi Cards, all said that "trailing interest" is a practice shared by various lending schemes but gave no specific examples.

Fees are only allowable to the extent they cover costs incurred by the business. They are not a money-making mechanism. The miraculous realization of this fact, after Senate prodding, is why many large lending institutions are getting rid of some of these ridiculous fees. Only continued inquest, however, will ensure that real reform is enacted and that bank's aren't just throwing out a minor compromises to placate the committee. — BEN POPKEN

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The comments section under this brief article are worth going over, and includes a link to a PBS show called "The Secret History of the Credit Card."

All are interesting and good for a look. It is criminal the way Credit Card Co's hide charges and bleed people dry.


Gimpy
who loves shredding those flippin things

 

[Gimpy]

http://www.consumeraffairs.com/news04/2007/03/senate_credit_cards02.html

This is a more detailed article on the hearing, with examples. The page has a 'don't repost without permission' on it, so I can only provide the link above.


Sorry,

Gimpy

 

[aurora]

The trailing interest actually can kill you. It's the same here in Turkiye. I once had an American Express card which did not get very popular here but abroad it was accepted everywhere. Anyway then I used to travel abroad on business and used this card and out of my 1.110 USD debt I paid 1.100 dollars back and was asked for interest for the entire sum but I told them that this was ridicilous etc. and later they did not take the interest but then I think there was really no legal law for these matters but now there is but they still ask for it.

 

[Peto]

My solution to it is to use a debit card instead of a credit card. There's only a small fee and no interest. Any purchase is debited directly to my bank account. Of course, I can't spend more than what I have in the account, which is another good thing.