This is not a direct credit card question, but it certainly can affect credit cards for people.

Why are companies allowed to pull your credit in a hard check, extend you credit for services on a monthly basis (think your cell phone, rent, etc.), and damage your credit record for nonpayment, when they are not required to *help* your credit record when you do live up to the agreements?

No one should be able to harm your credit for nonpayment if they do not provide positive input for payment.

I know it seems churlish to complain about losing such a low rate but tripling the interest rate of a 15 year customer with a perfect record, right after you have received that customer's tax dollars seems worse than churlish.

Rather than a "cap" on interest rates, how about a "cap" on how many points a bank may RAISE a card's interest rate in a year -- when the customer has done absolutely NOTHING to deserve having their interest rate raised. Even a "promotional" rate.

Aside from "How stupid do you think I am to give me this bogus energy analogy," I would like to ask Mr. Goolsbee why this sort of bait and switch of APRs is legal, why astronomical late fees are legal (even if the online payment is made on the same day with many companies--as if online transactions can't happen unless you make the payment a day in advance!), why paying one day late on one card can affect the APR on other cards, and lots of other questions. I pay considerably more than the minimum due on every card every month, on time. I am outraged that these companies can change the rules on a whim and penalize customers who are *not* defaulting on loans or delinquent in payments.

Proposal - Credit reporting agencies must be forced to remove any item they can not prove is valid! It is a form of libel, to falsely report that someone defaults on credit. Today their defense is that they only report what is sent to them. However, the information is used to increase the cost of borrowing for the consumer, the user is hurt financially. Victims of false reporting should be able to sue the agencies for damages.

1. Europe, rather than using credit cards, instead mostly uses debit cards, which have no default problem. Shouldn't U.S. laws encourage the credit card industry to offer debit cards, not credit cards?
[banks hinder debit card use in various ways; eg,
by default the debit account is also the checking account, leading to more check bounces]

2. Should over-the-limit fees be forbidden,
since the credit card user should instead be refused the credit card transaction?
[yes, there are monthly fees that move the account
over the limit, but nonetheless over-the-limit fees should be disallowed]

3. Can/should the Federal Government return/allow state oversight over credit cards, including various caps states placed on interest rates?
[For the past few years, many credit industry problems were identified by the states,
which were then forbidden from acting against those industry problems.]

4. Are some credit card interest rates usurious?
Years ago, didn't criminal organizations charge those interest rates? [this is the street lore]

5. Should credit card companies be supported by law for debt collection? [In the past, credit card debts were considered unsecured loans, but recent laws seem to have more-or-less securetized those loans with the user's assets and salary; credit card companies' gain benefit by giving large credit to everybody, then having/asking the Federal Government to enforce the credit companies' wishes]

Are the legislators considering anything retroactive that would allow customers like myself to go back to the old terms and have their accounts reinstated?????

Also one of my cc's bills are often postmarked one week after the statement date. Is this legal?

I closed my American Express account years ago because I didn't see any reason for ME to pay THEM for the "privilege" of using their card. My husband and I have one Chase credit card that we use for everything, we pay the total amount due every month and never pay interest charges.

How about when I owe $1,000 on a $4,000 card at 11.99% APR in March and then I all of a sudden owe $1,000 on a $2,000 card at 20.99% APR? It's funny because I didn't make the CC company hurt my credit rating.

I'm opted in to so many things I don't want as a result of having a credit card, from ads to various forms of "protection" to arbitration clauses, yet I have to take affirmative and sometimes onerous steps to figure out the foundation score that affects all the credit I have.

Every card I currently use has had one of two things happen - the limit's been arbitrarily lowered or the APR's been arbitrarily raised. I receive no explanation other than "a thorough review" having been conducted.

Ask him if he has ever read Atlas Shrugged and, if so, please explain how the government's bailing out of failing businesses is any different than what plays out during the book.

Ask him if big businesses are having their bad decisions forgiven in the form of bailouts, what incentives do big businesses in the future have against taking undue risks?

You may not realize this, but when you sign a cardmember agreement, buried in the fine print is something called a "class action waiver." It is language that says that, should the customer decide to sue the credit card company, he/she cannot sue as part of a class action but must submit to individualized arbitration. Two problems: first, the credit card companies almost always win in arbitration. Secondly, what if the customer has only been screwed out of 2 dollars? The customer won't have the incentive to sue in the first place. If the credit card company screws one million customers out of 2 dollars each, no individual consumer has the incentive to sue. The only solution is a class action lawsuit.

Now, courts in some states have rules that these "class action waivers" are "unconscionable" and may not be inserted in agreements, because consumers don't realize what they're signing away and these waivers basically immunize credit card companies from liability if they screw over consumers. But some pro-business courts in some states have allowed these provisions to be inserted into cardmember agreements. We need federal legislation banning "class action" waivers. Customers must have some legal avenue of redress if they are being taken advantage of.

On two of my credit cards I noticed that I was being charged for late fees. Now, in order to make sure I paid them on time I had called both card companies and requested that I have my due date set to the 25th of the month. They agreed and it was that way for many years. Every month I paid them on the 15th or the month and I was never late. So how was it that suddenly I was late and was getting charged late fees. Oh, and by the way, by the time I discovered this, they had also raised my interest rate from 11% to 24 %. So I did some back tracking looking closely at my statements for the past 6 months. What was happening is that each month they were moving my due date to an earlier date. Because I didn't catch this I wound up paying late two months in a row, was charged late fees for 2 months ($39 each time) and my interest rate was more than doubled.

I called both companies and told them that I was going to file a complaint with the State of New York. Citibank who I've done business with since the early 80's agreed to rescind the late fees, return my interest rate to what it was before they changed it and fix my due date on the 25th of the month. They did everything I requested and I continue to do business with them. They made some weak attempt to tell me that they did this because I was such a good customer and moving the due date was somehow a reward for being such a good customer? I told them that was garbage and not to insult my intelligence.

The other company: which I can't remember at the moment, offered to rescind the late fees but refused to lower the interest rate. I didn't even get around to discussing fixing the due date problem. I cut up the card and told them to close the account immediately. I had done business with them for close to 20 years.

Now, for everyone like me who knows that credit card companies are in a competitive environment and since my credit is good, I have lots of alternatives and if they treat me unfairly, I can do business with someone else. Many people do not have this option and are unaware of what their options are with the credit card companies. I hope a regulation effectively stopping this practice can be enacted.

I called them to opt-out of the rate increase and close the account, but they told that was only allowed for personal accounts, not business accounts.

So, I would like to make sure that these reforms apply to small business credit card aacounts as well as personal credit card accounts (big businesses probably have the clout to get good terms already).

So two transfers of $1,500 costs you $45 each ($90 total).

So basically, that's the equivalent of 12.5% APR for the first 3 months... hmm...that sucks. Less than you thought, though.

Several of my credit cards sent me notices at the beginning of the year increasing my rate by anywhere from 5% - 10%. I hadn't made a late payment, gone over my credit limit, or anything. When I called them for answers, they simply said "the cost of credit had gone up" for them. There was no recourse. I either had to close my account to avoid the increase, or eat it the new APR costs. And they can do this at any time??? How is that a contract when they can change the terms at any time, but we cannot?

Just got an credit card offer in the mail and I couldn't believe the fine print on the "0% fixed* for the first six billing cycles" financing offer.

At first, it seemed like a typical offer, but the fine print denoted by the asterisk(*) revealed the following astonishing statement:

*During the first six billing cycles, 3% of the amount of each trasfer or check, with a minimum fee of $5 and a maximum fee of $50.

Wow, 3% of the transfer for EACH of six months?!?!? Hello, 36% for that six month period, boys and girls (on each balance transfers of $1,500 or less).

The bank in question was www.barclaycardus.com.

According to fair debt collections act, the only action I can take is against the credit reporting agencies and as far as they are concerned, they are doing their part to "validate the debt". Well of course these guys are going to say it's valid. They are just verifying social security number, name, address and that's it.

Upon research I discovered junk debt buyers have increased by 500% since the bankruptcy act limited consumer protections. A good share of the debt these buyers are involved with are debts that have already been paid off, re-aging debt and debts that are illegal to collect.

Why not restore consumer protections before the bankruptcy act to prevent this type of activity?

I should be able to directly contact creditors that are able to put something on my credit report without depending on the credit reporting agency to do it for me.

I should be able to take individual action against junk debt if I can't get results any other way. The current protections offer very little in the way of enforcement against debt that is not yours.

The burden of proof should be on them to prove, not me that it's not mine - how would I have proof I never owed something if I never owed it?

2) Mandatory arbitration should be abolished if someone wants to opt out.

3) Changes in terms should not be retro-active on past debt. I can understand new charges (maybe), but not charges I have already made. I have a hard time with cards that I've signed up with offering a fixed rate charge and then switching to an adjustable rate a few months after I've used the card. I am constantly looking for a new card.

4) Universal default is a just wrong. I had a hospital bill go into collections by err (I was in the hospital at the time and they couldn't contact me?) They removed the collections off my credit report - but it was too late and I had other accounts say that was the reason for raising my rates. They didn't care if it was an error.

5) I recently had a card limit reduced by over 50%. I had never been late. The reason? "No open real estate accounts". I own my own home. No threat of foreclosure. And they have a problem with that? I got no notice and suddenly my card was at limit. I carry a card for emergencies. What if I was out of town and suddenly had no credit?

6) The only good thing about the previous card was that they were the worst credit card I've ever had. They'd change dates for payments due constantly, used bad methods of computing finance charges that are illegal now and if there was a devious practice, they'd do it. I needed to get rid of them and did.

But if they are now crying about business being bad, after pulling stupid, dump and predatory tricks - well then, they deserve to go out of business. It has nothing to do with the industry has a whole.

7) Not all business deserve consideration when they say "business is bad". Sometimes a lot of the big companies have adopted such anti-consumer practices that they created their own results. No one wants to do business with them. I see that more and more in heavily monopolized industries. Banking is no exception.

8) Reinforce local credit unions.

@PopulistOutrage: No, the *country* only supports dead-beat consumers now. Duh.

No it's not. They are collecting interest for taking the risk of allowing me to use their money. All the fees are gravy. When an account is settled usually by that time the customer is paying both interest and fees. The fees can easily add up to 3/4th's of the amount owed.

After the bankruptcy act, credit cards have seemed very unmotivated to settle. They are unmotivated to reward even good customers - just read complaints about lowering limits for no reason or canceling cards that haven't been used.

Their actions felt like a backlash as a way to undercut Obama's stimulus plan. Credit cards have not been acting like responsible institutions that people are able to trust. They have been acting more like pay-day lenders with hidden fees at every turn. Often they do hit the person who is struggling and make it impossible for them to pay off. It's a form of servitude which is not reasonable or responsible.

As it is, they get away with charging interest on interest. That's enough profit for a king right there.

I wrote to Jamie Diamon, Hilary clinton OWL
AARP NOW WOMEN FOR HIRE, BULLY BUSTERS
MY ATTORNEY GENERAL LISA MADIGAN

I WANT MY MONEY BACK FROM 1994
YOU TURNED PREDETORY AS A PUNISHMENT FOR THE BILLS NOT BEING PAID AND SCREWED UP PAPERWORK--YOU PITTED EVERYONE AGAIST EACH OTHER WHILE YOU PARTIED ON RIPPING OFF THE ENTIRE AMERICAN WORKFORCE.
LOW PAY JOBS,NO RAISE AS A PUNISHMENT
SCREW YOU WE ARE NOT INCOMPETANT LITTLE KIDS
THE RUINNING OF PEOPLE'S CREDIT, PREDETORY LENDING
YOU NEED TO FIX IT I CAN NOT REACH IN THOSE COMPUTERS AND DO REVISIONS BUT YOU CAN AND YOU BETTER.

I have $250000:- in the Bank, I have two houses paid in full, 3 cars and one Harley paid in full!

And no debt what so ever!

Everything I buy I pay cash!

This only shows that the Credit Cards Company's has to much power!

I think this system is very bad! They don't promote people living without debt!

There are certainly cases in which that's a good question, but I don't understand it in the context of credit card reform. How does requiring statements and policies to be written in plain English hurt people who pay their bills on time?

Because they are abusing good customers too! My co-worker had her cc cancelled because she hadn't used it, and Chase customer service told her "they didn't need her business" when she called to question it. Now her credit score is effected.

@evilluckycharms: And this credit report (score) is more important due to its use in employment, insurance rates, etc

@silyolpooh: Seconded, please ask this question.

@HRHKingFridayXX: 20% is a GOOD rate now- when they jack people's cards to 27.99% for no good reason....

@Stephen Cox: Did your Balance Transfer post as a Cash adv or a purchase? It sounds like you had a promo apr, for the 9.9 then after the promo you got hit with the reg cash adv apr.

@Jason Rose: Whats great about that is, The CC company is change your agreement, and if you don't like U can close your acct with the Lower APR.

Hi Everyone, I'm a CSR for a CC company. What I love about CC is that, if times are hard and you can't make your payment. You the Cardholder, wants the CC company to setup a payment plan, or lower your APR. It's funny because the CC company didn't make you spend all of that money.

The other cool thing is that the CC company will let you settle your accout. SO, If you own 20k and could easly settle for like 10 or 12k. That's like free Plasma. NO wonder they are going under.

Amen to that. I got screwed by Bank of America when they bait and switched me from a 9.9% life-of-the balance transfer and then jacked it to 24.4% two months later, just because "they could" (paid on time and more than minimum). There was nothing I could do about it. Isn't that illegal? Now I just have to pay that card off and tell them where they can stick that little piece of plastic of theirs...

Who needs good governing when you've George Clinton bee-a-tch!

(Bonus OT question, why can I only deduct $3000 in capital losses per year even after the market dump).

Why to fill the positions in your administration did you just change which Goldman Sachs insiders are in charge instead of finding people who aren't just Wall street lobbyist tax cheats who continue to soak the taxpayer and send cash back to the rich on wall street?

How can I have any hope when you and congress are owned by the banksters:
[marketplace.publicradio.org]
The bill will likely make things worse, not better after the lobbyists are through and you will sign it.

If the ABS/CDO/whatever backing up my credit card debt is selling at $0.20 on the dollar, why can't I just buy the note and cancel my debt at $0.20 on the dollar? It is probably in the Federal Reserve Toxic Waste Superfund account, so you might have it. (Same with mortgages - the debt is selling at $0.25, which would avoid foreclosure, but for some reason we still must foreclose and turn cities into war zones of abandoned houses)

Which is the rule in like every other realm of life, oddly. :)

I would like the Consumerists to ask about credit score transparency (above) and, as a follow-up, also ask why it isn't readily accessible. Seeing my credit report once a year doesn't help me. If I'm being judged by it, I want access to it all the time. You wouldn't apply to college without knowing your SAT scores and your high school grades, would you?

That is all.

If you sign up for a credit card, they shouldn't be able to reduce your credit limit or change your APR without realistic just cause. Their reasoning should be reliant on your business transactions with them and them alone.

I had a case of a credit card where they reduced the limit and never even notified me, I found out on my own. Given I had not used it in awhile, but they reduced it to a limit making that "awhile" be forever.

Also, no stores promotions with the "No Interest, No payments till so and so". Sure people should read the fine print which says you must pay it off entirely by that date or they charge the full accumulated amount. When you read the big, bold text that says "No interest" to you, to most everyone it logically translates into "No interest" till that period, not it accumulates till that period if you didn't pay it off.

There is some sneaky advertising with credit cards, that itself should see much more scrutiny.

As you know, JP Morgan Chase Bank a/k/a "Chase Bank USA, N.A." took $25 Billion (thats with a B) in TARP money, and went out and purchased Washington Mutual (in addition to other things like outsource U.S. call center jobs).

In October, I decided it was time to get a credit card so that I could do things like rent cars without hassles (and other types of interstate commerce activities that we just aren't able to carry out freely without credit cards - where's that commerce clause when you need it?) when I travel to Miami to visit my girlfriend, who is down there for a year pursuing a Master of Law degree. Well, WaMu came through and extended me a Credit Card with a $2300 limit and a 14 month promotional APR of 0% (dubbed the WaMu Real Values Program). And then, their toxic assets were called, and WaMu came crashing down.

So Chase, now all leveraged up with TARP money buys WaMu and begins controlling my account at some point in January. They give me this lovely message in my Jan 23rd Statement:

Your account is now owned by Chase Bank USA,N.A. See enclosed Privacy Policy. If you are a new Chase customer you need to contact us to exercise your privacy preferences.
PLEASE NOTE: Effective February 1, 2009, we will no longer offer the WaMu Real Values discount program.

As you guessed it, my Effective APR went 0.00% to 23.96%. They even took extra care to make sure this new APR was applied to my previous cycle's average daily balance. Gee, thanks Chase!

So, I'm taking Chase up on their offer and I'm exercising my privacy preferences by forwarding my Nov08 , Dec08, and Jan09, statements to The Consumerist. U.S. consumers shouldn't be forced to pay off your bad bets through these devious practices.

It seems to me that credit (FICO) score should NOT go down if a credit line is paid in full and closed by the consumer. If anything, it has shown that you can be responsible with money, and in control of your available credit.

On the other hand it does nothing to benefit the economy or lenders when consumers are strongarmed into keeping open credit lines because of the veiled threat of a FICO adjustment.

If my tax dollars paid to bail out my creditors, why am I the one being penalized with out-of-nowhere increases in APR? If the government had just given me my share of the bailout instead, I would have paid off the cards.

Now it seems like these creditors have the government money (my tax money) AND my payment money. And that ain't right.

This should be in the hands of a non-profit or government institution, NOT a privately held company. The numbers that FICO produces affect everyone, therefore, it should be public knowledge HOW our numbers are calculated. Who knows, maybe the geniuses got it wrong and they don't know it.

[www.fico.com]

How about we ask the administration to have the FICO organizations PUBLISH how they come up with our credit ratings? I am tired of it being "ask the expert" and see if this one agrees with that one. How come there are no published parameters about how credit scores are calculated? Everyone you ask has a different "method" they "think" the credit card morons are using.

I checked my backup card just now, which I got in college with I think a $300 limit? It has a $9500 limit. (Though I've had it for 10 years now.) And I don't actually USE that card ... I charge lunch on it twice a month to keep it active. So it'd still be okay with the $300 limit. :)

(I'd check my other cards but one came with a ridiculously high limit so I've always just ignored it and the other my husband opened before we were married so I don't know what it started at, but that's the one that just mysterious went up another $3000.)

Moreover, what is credit? An imaginary ability to generate more pretend money backed by nothing other than the US Govt pretending US currency has some intrinsic value. The joke is on us. China already figured it out. Which country produces? Which country consumes? Pretty fucking obvious where things are headed.

Stop subjugating the issues! This is all about how corporations can cover their asses via government transfer of wealth from the common tax payer to the elite sitting on the board of directors. It ain't socialism, its called FASCISM!

This "progressive with libertarian leanings" wants you to ask the WH Admin, if they could go FUCK THEMSELVES?

The system is unfair. If they screw up or fail to meet their contractual obligations I as a consumer have no recourse to fight back against them in the same way they can fight back against me.

So my question would be what will you as the President do to make it fair?

1) Yearly free access to your FICO score(s). This should be the same as the free once-a-year access to the underlying reports. You shouldn't have to pay to see what other companies will see about you.

2) Credit card companies should not be able to decide what they will/will not post about an account to your credit history. Citibank posts the amount owed, but refuses to post credit limits. This means that any amount owed can look like 100% utilization of available credit, hurting a user's credit score unfairly.

Case in point, Chase buys WAMU and jacks APR up 3 points, no particular reason other than: "we can".

On the subject of universal default, some of the companies have since discontinued that practice. Great for those who weren't affected by it, but I have yet to hear about any compensation/reparation/atonement for those of us who were.

Quick case in point, three years ago, BOA slashed my limit from $20,400 to $10,800, putting me near my limit. A couple of months after that, Chase began charging me default interest "upon a review of my credit." BOA followed suit with the default interest soon after. I had never gone over my limit, ever, was never late with Chase, was late with MBNA (now BOA) only once almost a full year before my limit was cut by BOA, and was never late with any other creditor. I worked my rear off for a year to pay those cards down and transfer their balances to other cards. Sorry, I guess the case wasn't so quick in point.

These companies have ceased using universal default because they had their arms twisted by the public and Congress, but I believe they should also be made to refund that interest to their comsumers. Otherwise, it seems to me that we are condoning they're robbery of us.

If they pay in full each month before the card reports to the credit bureaus, then they will always have 0% utilization.

==

If you get a CC and pay it in full each month, that will be better than just paying the minimum.

@Trai_Dep: She really should be the next press secretary. It'd be a brilliant move. You can never have too many 9/11 jokes and have them be repeated at press conferences.

Thanks

How about this- are there any plans to tie savings rates to credit card rates? Seeing as most major CC comps are banks as well, I find it offensive that they can charge upwards of 20pc for my irresponsible neighbor, but I, with no CC debt have no incentive to put my money away. A possible solution could be to increase incentives for reserves by subsidizing savings account interest.

Vastly increasing interest rates:
Bad- People who can pay their bills at a reasonable rate go into default because of the action of the CC company itself.

Solution: Interest rates increases only apply to new purchases

Fees: $39 for a day late, especially if it's late because they sat on it until it was late?
How about NO.

Solution: Postmark date. When they sent it is when it was paid. Or the transfer date if doing direct billpay.

Universal Default: no
Interest on fees or interest: no

The companies can decide what your limit is, as long as they don't set your limit below your balance.

It's one thing to make money, but to have a significant portion of credit card lender profits coming from the fine print is a little ridiculous.

We hear all the time that people like Bernanke say that the recovery will be driven by the recovery of the housing market.

The Fed and Treasury lower rates and pump money into the economy, in theory to provide more capital and incentive to borrow.

But then credit card companies lower the credit lines of even their best, highest rated customers, lowering their FICO scores by increasing their debt to available credit ratio. FICO scores go down for the most credit worth, and the cheap money that the Fed and Treasury have worked so hard (and spent so much of our taxpayer dollars) to generate sit idle because folks can't qualify for loans at rates that they can afford.

I have no suggestions to solve this. I'd like to know if our lawmakers and leaders (1) understand this problem, and (2) have any ideas.

@Jim Fletcher: Definitely. Citi does it to mine about every 6 months.

@Where The Mild Things Are: Oh the best comments so far have been the ones where they feign shock and awe over the traitor comment.

Really? REALLY?? I guess they never once watched Fox during the entire Bush reign.

http://www.pbs.org/wgbh/pages/frontline/shows/credit/

In this report, how do we outlaw people like the evil credit card corporate lobbyist?

I feel so betrayed. :[

@Trai_Dep: Yes! I wasn't expecting much since NO ONE can top Colbert's performance at the conference a couple of years ago (especially when he was performing to a Republican majority-yikes!) but I nearly fell out of my chair with that Oxycotin joke!

On topic, I sent an article in to the tip line concerning the credit card reform. I hope someone read it. At least I thought it was insightful :o(

But yay Consumerist for getting the chance to do this!

PS: most impressive, Consumerististas, most impressive!

I hope credit cards get taken care of soon. Things are a real mess.