In 2005, about 44% of credit card issuers surveyed by the non-profit group Consumer Action assessed universal default interest rates. Those issuers included Citigroup, Washington Mutual, HSBC Holdings and Wells Fargo, according to the group.
"Even consumers who always pay on time cannot avoid the price abuses," said Michael Donovan, an attorney at the National Consumer Law Center.
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Other questionable tactics involve applying penalty interest rates retroactively to prior purchases and lowering loan limits that trigger fees and higher rates.
Based on Federal Reserve figures, Plunkett estimated outstanding credit card debt amounted to $750 billion to $800 billion in November 2006. The industry has more than 640 million cards in circulation.
2 comments:
Speaking of the fees, while I was looking for information on yesterday's hearing, I came across this story about interchange fees:
interchange fees
"'The interchange fee is the biggest fee consumers have never heard of and accounts for more than the total of all other consumer fees such as late fees and over-the-limit fees,' says Hatcher. 'Last year, Visa and MasterCard generated more than $30 billion in credit and debit card interchange fees - a fee set in secret by Visa and MasterCard and imposed on merchants and consumers by the credit card industry and completely hidden from consumers.'"
I had no idea the impact these fees had on the price of goods. Hopefully this new congress can change these bad practices.
Thanks for the post Matt. This information is very helpful.
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