Blacknbengal
Well-Known Member
Why are credit card rates still out of control?
Despite congressional hearings, headlines, lenders push up rates and fees
It has been more than six months since Congress began looking into what Sen. Carl Levin, D-Mich., called the ?unfair or abusive? practices of the credit card industry.
In March, bank executives were called to testify before the Senate Permanent Subcommittee on Investigations. So much public attention was focused on the issue at that time that several big banks announced they would modify or eliminate a few of their most egregious practices. Committee members vowed to write legislation to protect American consumers.
So far Congress has done nothing to reduce or limit the exorbitant fees and sky-high penalty interest rates being charged to cardholders. And even though the Federal Reserve cut a benchmark interest rate this week, consumers are about to take it on the chin yet again.
?Credit card issuers continue to make subtle changes to squeeze a little bit more out of their customers,? says Bill Hardekopf of lowcards.com. ?We?re seeing it in late fees, cash advance fees, and default fees.?
Hardekopf provided the following examples. Discover just boosted its cash advance rate from 20.99 percent to 22.99 percent. At the end of September, the penalty for a late payment will also go up.
Right now, the late fee on a Discover card is $15 on balances up to $500 and $39 on balances over $500. For billing periods after Oct. 1, the late fee will be $19 on balances up to $250 and $39 on balances over $250.
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Despite congressional hearings, headlines, lenders push up rates and fees
It has been more than six months since Congress began looking into what Sen. Carl Levin, D-Mich., called the ?unfair or abusive? practices of the credit card industry.
In March, bank executives were called to testify before the Senate Permanent Subcommittee on Investigations. So much public attention was focused on the issue at that time that several big banks announced they would modify or eliminate a few of their most egregious practices. Committee members vowed to write legislation to protect American consumers.
So far Congress has done nothing to reduce or limit the exorbitant fees and sky-high penalty interest rates being charged to cardholders. And even though the Federal Reserve cut a benchmark interest rate this week, consumers are about to take it on the chin yet again.
?Credit card issuers continue to make subtle changes to squeeze a little bit more out of their customers,? says Bill Hardekopf of lowcards.com. ?We?re seeing it in late fees, cash advance fees, and default fees.?
Hardekopf provided the following examples. Discover just boosted its cash advance rate from 20.99 percent to 22.99 percent. At the end of September, the penalty for a late payment will also go up.
Right now, the late fee on a Discover card is $15 on balances up to $500 and $39 on balances over $500. For billing periods after Oct. 1, the late fee will be $19 on balances up to $250 and $39 on balances over $250.
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