Senators Probe Surprise Credit Card Rate Rises

[Purveyor]

Source: Reuters

WASHINGTON (Reuters) - As consumers whip out their credit cards for another holiday shopping binge, a U.S. Senate panel on Tuesday will examine surprise interest rate increases, even for cardholders who scrupulously make payments on time.

"Working people are being squeezed. That's something which is intolerable and we're going to try to shed some light on it," Michigan Democratic Sen. Carl Levin told reporters on Monday.

The chairman of the Senate's wide-ranging Permanent Subcommittee on Investigations said his panel has found some card companies charging rates as high as 30 percent, even for consumers "faithfully paying" their credit card bills.

Charges are sometimes applied retroactively to existing balances and often card holders have trouble getting a straight answer about why their rates have been raised, Levin said at a briefing ahead of a subcommittee hearing set for Tuesday.

--
With Congress consumed by Iraq, children's' health care and budget and tax issues, lobbyists said credit card reform would not likely see action this year, but it may next year if election politics leave even a little room for policy debates.

Read more: http://www.reuters.com/article/politicsNews/idUSN034526...

[Deja Q]

1. Merry Christmas, ha ha ha.

Yes, "ha ha ha". Because "ho ho ho" would suggest the credit card companies are sleazy hookers, and would be receiving money for nefarious acts and that would not be a politically correct thing to say.


Love that Jiffypop!

[Gormy Cuss]

5. They're not?

I'll save the senate some time. The answer to their question on why credit card companies are raising rates even for good paying customers is because they can.

[Lorien]

13. Yep. Another gift of deregulation

They should hardly be surprised. Wasn't there a vote a few years back that ensured that the CC companies would be able to do exactly this?

[brentspeak]

2. Card holders ALWAYS have trouble getting a straight answer about why rates are raised

Bank executives are simply three-piece-suit-wearing stickup artists.

[Purveyor]

4. With congress tucked neatly into their backpockets... Just research the scum that supported

the so-called "Bankruptcy Reform Act" for a complete list.

[MidwestTransplant]

3. They are probalby raising them to keep them where they were before

the Prime rate started dropping. A HUGE Christmas bonus for the CC Companies. People probably don't even notice they are rising because the rates look the same.

[Zorra]

6. This is what happens when you make a deal with the devil.

Credit cards are a threat to our national security.

If you have credit cards, (and even if you are not in credit card debt and use your cards responsibly), do your country, and fellow citizens, a great service:

Please cut them up into little pieces, throw them in the trash, and never use credit cards again.

[BadgerKid]

7. Gotta pay

those oh-so underpaid corporate executives somehow

[eggplant]

8. Gotta love that Debit card...

I'll never go back to credit again.

[AnneD]

10. You're singing my song....

I've been credit card free since 2003. I keep 1K in the savings for emergencies. With the debit card.....I charge myself favourable interest rates (0%for a charge and I get interest on the money I save), it is accepted in all places, there is never a late fee or a card fee, no fine print, no over the limit fees, no universal default, no bills, no envelopes, no check writing, no stamps. It is the card of my dreams. I'll never go back-ever.

[AndyTiedye]

12. Most Rental Car Agencies Won't Rent You a Car Without a Credit Card

Hotels want huge deposits, and you are likely to get the extra search treatment at the airport if you pay cash.

Since the travel industry and the oil companies like plastic, let them eat plastic.
I pay it off every month anyway.

[Lorien]

14. Most debit cards are tied to Mastercard or Visa, but there's no

interest rate because the money comes straight from your checking account. Therefore you can use them for car rentals, hotels, etc.

American Express is another good option. There can be late fees, but no interest rates.

[AnneD]

15. I belong to a credit union.....

my card is free- and I have never been turned down, even on auto rentals.

[Lorien]

24. Me too. Same deal. n/t

[MissB]

25. Many do allow it, but you have to be extra careful

as they may hold a substantial "virtual deposit" against your money.

[spinbaby]

9. We had one go up to 75% once

No kidding, we got a notice that our interest rate had gone up to 75%. I don't know if it was a typo or what because it was a card we weren't using and we cancelled it immediately. Afterwards we figured that might have been what they were after--they wanted us to cancel the card we hadn't used in over a year.

Whatever happened to usury laws?

[Marie26]

32. Federal preemption

South Dakota lifted its usury laws in order to attract more credit companies to the state - and all the credit card companies flocked to that state. Supreme Court decided that federal law pre-empts state law, Republican Congress passes bills lifting the interest rates - and so much for state usury laws. A state can't pass usury laws now even if it wanted to, because it's preempted by the federal law in that area. The republicans effectively got rid of state consumer protection laws.

[melody]

11. They ought to also be asking why credit card companies are "finding" fees to suddenly charge

I had a zero balance credit card charged with a "fee" they decided to charge me. They shortly charged me a
fee for my not paying off that balance even though I didn't know it existed. I then canceled the card. They still
want their fee, though. These companies have pushed predation to a whole new art form.

[Proud_Lefty]

16. I remember watching the credit card debates on CSPAN

Randy Rhodes went over all this, how they could unilaterally adjust the interest charged, the due dates, the penalties, etc., all without our knowledge or consent. What's wrong with our senate's memory? It wasn't that long ago and they were there in the flesh.

[Mrspeeker]

17. Yeah they care lots LOL

Try shedding some light on the trillions dished out for war first idiot!

Congress and Senate are consumed with waging a war on us, its 1984 the book that came to life

The day one of these Senators does something for real people, is still coming trust me ROFL!

[Javaman]

18. Calling Mr. Biden, oh mr. biden???

Where are you? these credit card corps are in your district. Oh mr. biden, you voted to change the bankruptcy bill to help out your credit card donars. Oh mr. biden, are you there?

[formercia]

19. Some times I think Congress exists for the sole purpose

of passing legislation for the benefit of corporate special interests so they can bleed the working stiff until they're white.

Something is going to have to change and soon.

[Javaman]

20. You mean it doesn't? nt

[RUMMYisFROSTED]

26. Right. Only "sometimes?"

[Skarbrowe]

21. My Capital One card jumped from 9.9 to 15.9 for no reason.

I posted about this earlier on another thread. When I called to cancel the damn thing, because I had that card since the early 90's and usually paid off my balance every month. There have been times when I made a payment, but not lately. Also, this card had the same 9.9 percent of cash advances and I thought that could be used in an emergency some time so I kept paying 18 dollars a year for the privilege of having this card. Well, the cash advance rate jumped to over 25 percent and I said no more! I called and waited and waited and waited until someone would answer the phone. The woman I finally talked to actually told me the banks were having problems. Yep, she said that. I have cash back due on my card and I have to get that before I cancel. My "fee" isn't due until April so she talked me into accepting a zero interest rate for 6 months. I'm charging my Xmas stuff on this card, get my cash back rewards and then cancel. I don't need to worry about a credit rating for canceling a card. So no more Capital One after January.

I use a debit card for groceries and I always pay off my balance every month on the one other credit card I use for online stuff. The credit card companies are trying to squeeze everyone big time right now because something wicked this way comes...financially.

[Mountainman]

22. They should put back the consumer interest deduction in the federal tax code.

Give everyone a consumer interest credit based on the interest they pay on consumer spending. Not an itemized deduction but a staight reduction of taxable income. It should be tied to earned income. The more you make the less deduction you get.

[phantom power]

23. Who could have imagined....

that when an industry lobbied to deregulate itself, and Congress did it for them, that industry would then turn around and use its freedom to screw their customers?

Imagine! It's almost as if those pesky regulations had been put in place for a reason.

[Digit]

27. I just spoke with a hapless victim of this a few days ago...

I was purchasing a pair of slacks at Penney's and the saleswoman asked if I wanted to put it on my Penney's charge. I told her I was credit card free and I would be paying with cash.
I then told her I had been with MBNA and they had been sold to BOA and they had tried to pull a fast one on me.
Then she told me of HER tale with BOA.
Seems she had been with them for years and then there was a workmens's comp situation attached to a bill from years ago which she had not received an invoice for.

She stated that BOA went back on her bills to when that bill was payable and retroactively charged her higher interest on her past statements and ruined her credit. She said the extra payments came to about $2000, and because of this, she was about to lose her home.

I slipped her an exta $10 and told her to use it for gas. I wish it could have been more, but that was all I had in my wallet. At first she tried to give it back, but I was insistent. She gave me a huge hug.

This woman has waited on me numerous times at Penney's and is one of the reasons I come back.

Oh, and the woman behind me in line joined in with her horrible story of BOA.

I only know of my own story and the other stories are heresay, but based on my own story, I tend to believe them.

[FreeStateDemocrat]

28. "lobbyists said credit card reform would not likely see action this year," way too much access by

lobbyists.

[lunatica]

29. But, but but...

Haven't they said they're doing us a favor and helping us pay off our debts by raising interest rates and forcing us to pay triple and quadruple minimum payments!? How does anyone expect them to stay afloat with all their balloon mortgage payment losses and being forced to deny credit to people. Just like any life-blood flow they must put a tourniquet on it to stem their losses. Damn consumers! Squeeze that tourniquet tighter! But not to worry too much. There's a whole new market of affluence opening up for them in China and India. Millions and millions of new consumers, ready to partaay!

[leaninglib]

30. Oh God... Come on Senators;

let's work on something that is an actual responsibility of the federal government.

No wonder nothing of substance ever gets accomplished.

[Marie26]

31. Cut up your credit cards!

More than posting at DU, it's something everyone can do right now to stop the Bush Administration & their financial backers. By buying things on a credit card, & contributing your money to CC late fees & high interest, you are funding the Bush Administration. And you are also funding the lobbyists that allow the credit card companies to buy off Congress, & get away with these types of scams & unfair practices. Cut them up!

*steps off soapbox*