Most Popular Choices
Share on Facebook 20 Printer Friendly Page More Sharing
General News    H2'ed 5/7/09

American Expressions; A Time for Credit Card Reform

By       (Page 1 of 2 pages)   2 comments
Message Danny Schechter

Will The US Senate Pass Long Needed Reforms Of Credit Card Abuses?

I recently was advised by American Express, a company whose credit cards I pay in full each and every month, and with whom I have been a paying "member" since l981 that my credit card limit is being cut. I have become unworthy. 

I took it personally until I realized I am but one of millions of card holders who are being dropped or cut back worldwide as the card pushers experience a higher default rate and millions max-out. American Express, by the way recently, reorganized as a "bank holding company" to qualify for a government bailout. AMEX received several billion dollars from that TARP program that we were told was created to get lending going again. Hmm....

As the card companies began to experience the losses and uncertainties that their customers have long experienced, they began operating in a more predatory manner, jacking up fees and putting the collection pressure on. In England, the government mandated that credit card companies give customers more time to pay-extending payment due dates by a month. In this country, the companies want us to miss those due dates so they can tack on forever escalating late charges and interest payments. These credit card costs have gone UP even as interest rates---the amount they pay for money-- goes DOWN.

This has become a major political issue.  Consumer's Union reports  that " President Obama is throwing his support behind major credit card reform, and the House just overwhelmingly passed its bill by a vote of 357 to 70!                        

But the Senate is bitterly divided...The Senate may vote next week on its bill to curb these random rate hikes and fees. But the bank lobby is swarming Washington, claiming if they can't randomly hike your interest rate, consumers will suffer."

The credit card companies are squealing than any restrictions on them will hurt the economy, drive prices up, and lead to financial Armageddon or worse. Most cardholders know that they will be hurt more unless something changes. For many credit cards have gone from a luxury to a necessity to a noose. Millions have become prisoners of debt, almost as if they are serfs and as if capitalism is going back in time to feudalism.

The average card rate is a whopping 14%. But that can climb easily to over 30%.

The way these companies exploit customers is legendary and has been tolerated for too long as many media outlets report:

US News: The advertised annual percentage rate on 15 Capital One cards increased from an average of 12.45 percent to 17.24 percent.

MSNBC: Citibank, and HSBC, are now raising rates on millions of customers.

NPR. American Express announced it's offering $300 payments to a limited number of cardholders who agree to close their accounts.

The New Yorker: "These tactics are not going to improve the credit-card industry's dismal reputation. They're also not going to help an economy in recession, since reduced credit lines take away an important cushion for consumer spending, and higher interest rates and increased fees are likely to drive more people to default.

•Wall Street Journal: How are credit-card issuers reacting to consumers' attempts to live a more financially responsible lifestyle? They're threatening to cut their credit cards off if they don't spend enough.

•Bloomberg: About 45 percent of U.S. banks reduced credit limits for new or existing credit-card customers in the fourth quarter of 2008

Miami Herald: Interest rates are rising, their credit limits are shrinking, new fees are cropping up, the time to pay their bills is decreasing -- or their cards have been cut off altogether.

Next Page  1  |  2

(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).

Well Said 1   Interesting 1   Valuable 1  
Rate It | View Ratings

Danny Schechter Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

News Dissector Danny Schechter is blogger in chief at Mediachannel.Org He is the author of PLUNDER: Investigating Our Economic Calamity (Cosimo Books) available at Amazon.com. See Newsdisssector.org/store.htm.
Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines

 
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEd News Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Israel Gives All Jews A Bad Name

Is There A Threat of Fascism in the USA?

Free Marketers Going After Occupy Wall Street --Danny Schechter

WHO OWNS OUR MEDIA AND WHY IT MATTERS

COG OR COA: WHY IS OBAMA MORPHING INTO BUSH 2?

WERE THE BANKS TOO BIG TO FAIL OR THE BANKERS TOO BIG TO JAIL?

To View Comments or Join the Conversation:

Tell A Friend