Credit Card Abuses and Proposed Legislation

U.S. Senate and House of Representative hearings in recent months have explored and exposed widespread credit card abuses by major U.S. banks such as CitiGroup, Chase, Bank of America, et al, and legislation to curb them is currently under consideration in Congress. Hubsters should let their Congressmen and Senators that they support this legislation.

Credit card practices under fire include: universal default (If you are late with a payment on another account, your credit card company may raise your interest rate), other retroactive rate increases, excessive late fees, bad check fees, inadequate disclosure, misleading teaser offers, bogus currency exchange fees as well as others.

Frontline--The Secret History of the Credit Card

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MrMarmalade profile image

MrMarmalade 9 years ago from Sydney

I believe that all banks have one clear idea in their mind make money for the shareholders, then the controllers of that bank will earn more bonuses.

They forgot the word servive

Thank you

Ralph Deeds profile image

Ralph Deeds 9 years ago Author

Very true. I would add the words make money "any way they can without going to jail" for the shareholders.

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IĆ°unn 9 years ago

I've had credit cards for years and for a long time they were more than satisfied off 'normal' earnings it seems.

Over the last few years, I've had a few of my cards raise interest with no late payments for no reason and with no notice. Those I just paid off and closed. If everyone else would do the same, I suspect those 'good business' practices would cease.

I kept the cards which do old-style business. Provide what they say they provide at the rates they say they provide it.

As to American corporate greed, all I can say is "something is happening but you don't know what it is, do you... Mr. Jones."

This has to be the vilest generation of Americans ever and I tend to wonder about the religious overtones, whether the world is starting to divvy up into good and evil camps for the beginning of the end.

Ralph Deeds profile image

Ralph Deeds 9 years ago Author

That's the best approach. I recently closed my CitiCard Driver's Edge card after buying a can and getting my $1500 check. CitiCard treats its cardholders the worst of all the card companies. Most of the profits come from "tricks and traps" such as universal default, teaser rates, phony foreign exchange translation fees, excessive late fees and the like. Some say cards issued by consumer products companies like Southwest Airlines or General Motors may be less inclined to the most obvious ripoffs. My main card now is a USAA card which offers a 1% refund on purchases.

Gary 8 years ago

As a victim of Credit Card scams long before the current generation of scams, I became an atavist. I do have a debit card with a known logo on the front. I keep a minimum amount in that account in case of theft. Other than that, the only plastic I carry is my driver's license. I have the worse possible credit rating because I pay as I go. If I can't afford it, I don't need it. If I want it, I'll part with the cash. It is a wonderful feeling folks. I don't owe a single person a single dime. Cars and home paid off... A large part of this I credit the LACK of credit. Fees, scams, tricks and traps are what keeps most folks in debt. Don't play their games!

Ralph Deeds profile image

Ralph Deeds 8 years ago Author

You are so right. Thanks for the comment. Not long ago I canceled my Citibank credit card with great pleasure after being screwed around one too many times.

tv brackets 8 years ago

My friend and I always closed our credit cards by all means right after the provider started to question our honesty and put us into one too many troubles.

MIke 8 years ago

YOu guys kill me... take some responsibility for your borrowing practices instead of blaming the big bad bank. I don't work for one btw. You want to beat the credit card companies, use your card and pay off what you buy in the same month, 0% interest. But you know what, if you owe them then there's interest. If you don't pay them then there's fees. I love seeing things like debt settlement....I have an idea, don't suck and borrow more than you can pay back. Also, just in case you didn't know, but if less of you weren't so pathetic and paid your bills, interest rates would be much lower. Human nature I guess, to blame others instead of taking responsibility for our actions. You don't like it don't use it, or better yet start your own credit card company and loan to your buddies, charge 6% which what I am sure you view as fair and see how long you are in business.

Ralph Deeds profile image

Ralph Deeds 8 years ago Author

Mike, thanks for the comment. I completely agree with your recommendation that credit card users pay their balance in full every month. I've been doing that for years. However, a couple of years ago my payment for my CitiGroup card was lost in the mail, and you wouldn't believe the charges they piled on. There are plenty of barely legal but unconscionable practices, called in the trade "tricks and traps" which described in the fine print of the contracts which are used to screw customers out of their money. One of them is "universal default" which means that the company jacks up the interest rate on any unpaid balance if you are late or miss a payment on an entirely separate, unrelated account. Another one is to off a low teaser rate of say 2% for transferred balances and then on the slightest pretext jack the rate up to whaterver the highest permisable rate is in your state--30% or even more. Another is retroactive rate increases on charges incurred when the rate was lower. The banks actually prefer that no one pay off their balances in full. They consider these balances an asset which they continue to collect on ad infinitum. And so forth. I suspect and hope that the new Congress puts a stop to these unfair practices.

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RicoTampico 7 years ago

Citi bank is even lower than I could have imagined. After 35 years of monitoring credit card payments I had never had a mailed payment not get credited in time. Except that now Citicard is deliberately delaying payment - waving the late fee - and applying late charges. And oh - the check gets credited 3 weeks later. There is no doubt that this is a deliberate policy by this institution since its capital structure and ethical adherence are so distressed. They have targeted those who mail as either elderly or economically disadvantaged and unlikely to comprehend the concerted nature of this. Yeah it temporarily helps their bottom line in the aggregate but it is a cynical small-change effort of a soon to be failed institution and quite representative of Wall Street.

Ralph Deeds profile image

Ralph Deeds 7 years ago Author

Everyone should be boycotting the big money center banks--CitiGroup, Wells Fargo, Bank of America and dealing with local state banks, credit unions or whatever.

Joe Sellers 6 years ago

Hello again Ralph, I am glad I found your hub again. Your following keeps growing, great job. I have it bookmarked this time so it won't be a problem again. When you get a chance check out a letter I wrote to the banks. Please let me know what you think. Thanks

Joe Sellers 6 years ago

Hello again Ralph, I am glad I found your hub again. I have it bookmarked this time so it won't be a problem again. When you get a chance check out a letter I wrote to the banks. Please let me know what you think. Thanks

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