Defend Your Dollars is the website of the Consumers Union Financial Services Campaign, where we support reforms to the financial marketplace to curb bad practices by banks and lenders.
Last week we posted on Bank of America jacking up their interest rates. Perhaps, we have some high-level readers?
According to the Wall Street Journal President Obama is setting his sights on credit card reform. Maybe he thinks consumers shouldn’t have to wait for fair protection from credit card companies while they receive more than $240,000,000,000 in bailout money. I know that many zeros don’t buy what it used to, but this is nuts!
From the WSJ article
“Consumer groups are particularly critical of those that raised rates on some existing card holders even as the banks received federal bailout funds. Banks have said credit-market conditions and changes in borrowers' credit scores necessitated the increases.”
You mean the credit conditions caused by their risky bets elsewhere, and the credit scores that dropped after the banks slashed people's credit limits? If it wasn’t so tragic, it would almost be funny.
Now it seems that banks are pulling out all the stops to report quick profits. They are cutting credit limits to below existing balances (a real problem for the customer's credit score), to shifting customers due dates and reaping late fees ) to telling an estimated 4 million customers that credit rates were going to be raised to from single digits to double.
This consumer’s post from CreditBloggers is typical of many customers dealing with Bank of America lately.
“Last week I got the "amendment" letter from the BofA. My wife & I had this BofA Visa card for about 8 years at 9.99 percent. As far as I can remember, I've never been late with a payment. The letter told us we would now be paying a variable rate, prime plus 11.65 percent. We were actually given a reason: "a change in our business practices..."”
Credit cards have been left largely unregulated and any attempt to do so has been opposed vigorously and successfully by the industry--so far anyway. For their “Secret History of the Credit Card” project, Frontline interviewed the Banks, aka Edward Yingling, president of the American Bankers Association, the banking industry's lobbying group. He was asked
“Your critics say that you block every attempt to pass industry reform or consumer protection legislation. You've already talked about minimum monthly payments and why you're against that, so you block minimum monthly payment legislation, interest cap rates and a ban on marketing to college students.”Yingling: “We've done our best to block bad bills. Those are bad bills, and we'll continue to do our best to block them.”
Frontline: “Bad for?”
Yingling: “Bad for consumers.”
Are you mad? You should be.
If you have a personal story about your own credit card bank, tell us about it! We're getting a lot of press calls lately and we want to make sure every story profiles the real experience of someone like you. More important, the days are over when credit card reform simply couldn't pass because everyone believed the bankers when they said it would be bad for you. Bills are moving in both the House and Senate. Go to www.CreditCardReform.org to take quick action in support now!
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