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What Debt Card, Oops! I Mean Credit Card Companies Don't Want You To Know
By: Pat Hicks
Where large sums of money are concerned, it is advisable to trust nobody. Agatha
Christie (1890-1976)
You notice I called credit cards by their real name in the title of this
chapter. Make no mistake, the outcome of using a credit card is to create debt.
It would be a lot more difficult to market a “Debt” card but that is what they
are. In case you weren't aware of it, Federal regulators are pressuring banks
into raising the minimum credit card payment from 2% to 4% to "help" consumers
get out of debt quickly but somehow failed to address the usury interest rates
charged by these companies.
Here are a few things you might not know about the credit card industry.
Credit Card Industry Facts:
The credit card industry earned $1,200,000,000,000 last year. That is $1.2
TRILLION in profits.
In 2004 consumers were charged $14.8 BILLION dollars in late fees.
Here’s a cute little tactic used often by our credit card brethren. Not posting
your payment on the day it is received so that they can charge you the late fee.
They made millions using this technique last year.
Changing the due date or mailing the bill so that it is difficult at best to
meet the deadline and there by charging another late fee.
With two late charges on your ‘record’ your interest rate goes up as much as 10
points. This can be done without notifying you, by the way.
These companies have even resorted to not mailing out statements so that you
will pay late and therefore be charged at least $29 in late fees and sometimes
more.
Signing you up without your permission for credit insurance that virtually never
pays out.
Checking your credit reports to see if you are charging on other cards and if it
is ‘deemed excessive’, raising your interest rate by as much as twice your
current rate.
Charging you a $25 fee for NOT USING your credit card.
Capital One has been sued because their customers mailed in the checks a full
two weeks before the due date but were deemed late, charged the late fee and the
interest rate was hiked to double digits.
Citibank paid a $45 million dollar settlement because they improperly assessed
late fees and raised the interest rate up to 24% if the customer was late on any
payments to other creditors, even if you are current on every payment to them.
The largest settlement by far against a credit card provider was against
Providian for $300 Million dollars! Why? For improperly assessing late fees and
charging customers for things they never ordered like credit insurance. The
amount of the fine was proportional to the amount of abuse.
Sometimes because of the stress associated with these fees and abuses, people go
out and try to borrow their way out of trouble with debt consolidation loans.
This only adds to the problem if they don't tear up the cards.
Credit card debt has gotten to the point that it is not like owing the general
store and not paying off the bill at the end of the month or when you get your
next pay check. This is loan sharking at its worst and some say the rights of
individuals were taken away by the changes in the bankruptcy laws made recently
due to the efforts of lobbyists from the credit card companies. I think the
little guy needs help and that is why I wrote this book. There is a term used
often in Real Estate: “Operating from a position of superior knowledge”. One can
get sued for taking advantage of another for just this reason. Seems to me, the
credit card companies mentioned above along with many others, are operating from
a position of superior knowledge.
According to Robert Hinsley, a Houston attorney, “Being a good customer is not
going to protect you,” says Hinsley. “Nor will paying your bill on time each
month protect you. Many of the major cards -- First USA, Chase, Capital One,
Providian, Citibank, Penney’s -- have been sued over practices regarding unfair
billing practices and blatantly using tactics to cheat you out of your money.
There is plenty of evidence that indicates most credit card companies think you
are dumb and helpless and will not take any action. So they can easily use dirty
tricks to cheat you out of your money.”
Now are you ready to fight back and negotiate a settlement with these people?
Don’t be discouraged because the good news is, you can fight back. You can
negotiate and you can reach a settlement advantageous to you! Pull yourself up
to your full height, take a deep breath, know you are not alone and let’s get
started!
About the Author:
Pat Hicks is the Managing Partner for http://www.Iwantafreecrediterport.com, a
web site providing competitive priced credit reports and scores with no tricks
or misleading advertising. |
