Payment Card News

Mad Consumers

446 0

The Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration are gearing up today to announce new credit card regulations. But consumer groups are rallying for quicker action and more rules to rein in card issuers amidst a potentially disastrous economy for 2009. The Center for Responsible Lending released two new studies detailing the “Hall of Shame” of alleged deceptive and abusive business practices. The reports, entitled “Priceless or Just Expensive? The Use of Penalty Rates in the Credit Card Industry” and “What’s Draining Your Wallet? The Real Cost of Credit Card Cash Advances,” concludes that credit card issuers consistently choose complex pricing tactics that exploit borrowers’ lack of information. Among findings: only 3% of consumers understand the differences among introductory teaser rates and rates on purchases and on cash advances causes; 10% of credit card balances carry a penalty interest rate the cardholder doesn’t understand or know about; more than 50% of cardholders paying penalty rates do not know it; and, the spread between borrowers’ regular interest rates and their penalty rates, averaged 16.9 percentage points in 2008, more than double from seven years ago. Besides the interest rate and fee issuers, the reports also focused on the allocation of payments to outstanding balances and the triggering of penalty pricing. For more information visit: “http://www.responsiblelending.org”:http://www.responsiblelending.org

Leave A Reply

FREE MONEY SAVING TIPS!
Your Information will never be shared with any third party.