The Center for Responsible Lending has issued a new report on credit card abuses called "Dodging Reform: As Some Credit Card Abuses Are Outlawed, New Ones Proliferate," In their latest report they discuss how credit card companies found new ways around the Credit CARD Act intended to stop abusive credit card practices by establishing new money-making techniques that resulted in higher interest rates, fees and closed credit lines that damaged consumer credit scores. The report also expands on how a new Consumer Financial Protection Agency would address these abuses.
CRL's new report, Dodging Reform, finds:
* Issuers have adopted schemes to game interest rates, with the little known "pick-a-rate" practice gaining increasing momentum. Pick-a-rate costs American consumers $720 million per year and it may reach up to $2.5 billion annually as the practice spreads.
* Issuers have shifted penalty fee structures to charge 9 out of 10 people the highest fee possible if they pay late, while projecting the appearance of lower fees. The average late fee today is $39, while the typical past-due amount is about $50.
* Issuers are padding their other miscellaneous fees since the announcement of new Federal Reserve rules and passage of the Credit CARD Act, disguising many of the charges.
Download the full report
Download the executive summary
Download table of abusive practices
Watch this animated video "Credit Card Reform in Action," by Mark Fiore
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CRL's new report, Dodging Reform, finds:
* Issuers have adopted schemes to game interest rates, with the little known "pick-a-rate" practice gaining increasing momentum. Pick-a-rate costs American consumers $720 million per year and it may reach up to $2.5 billion annually as the practice spreads.
* Issuers have shifted penalty fee structures to charge 9 out of 10 people the highest fee possible if they pay late, while projecting the appearance of lower fees. The average late fee today is $39, while the typical past-due amount is about $50.
* Issuers are padding their other miscellaneous fees since the announcement of new Federal Reserve rules and passage of the Credit CARD Act, disguising many of the charges.
Download the full report
Download the executive summary
Download table of abusive practices
Watch this animated video "Credit Card Reform in Action," by Mark Fiore
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At a time when interest rates in general are still near historic lows, the greedy SOBs at Capital One almost doubled the interest rate on my credit card as part of an "across the board" rate hike for everyone. I work in the billboard industry and would love to but a billboard right across from their headquarters saying "Shame on Capital One" but I can't afford it.