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The Battle Over Credit Card Reform
Credit card advertisements posted at a bowling alley in Palo Alto, Calif., Wednesday, July 30, 2008. Visa Inc. says its profit rose a better-than-expected 41 percent in the most recent quarter, as more money changed hands using its credit and debit cards. (AP)

Credit card advertisements posted at a bowling alley in Palo Alto, Calif., July 2008. (AP)

Americans and their credit cards have always been a saga. In the economic meltdown, it’s been a bloodbath, too.

Fifty-five billion dollars in credit card defaults last year. But top banks still made $27 billion off plastic and you. They did it with some pretty hardball tactics. Tricks and traps, critics say. Rough fees, fine print, jacked up rates.

Banks say they need the rough stuff to make it work. Consumers are crying foul. Now Congress is weighing in with a Credit Cardholders’ Bill of Rghts. The White House is on board. Banks are fighting back.

This hour, On Point: The battle over credit card reform.

Have American credit card lenders gone too far with the rough stuff? The squeeze? Has American borrowing gone too far, on plastic? Tell us what you think — here on this page, on Twitter, and on Facebook.

Guests:

Joining us from Washington are:

Sudeep Reddy, reporter for The Wall Street Journal.

Nessa Feddis, vice president and senior counsel for the American Bankers Association, the financial services industry’s largest advocacy group, representing the majority of credit card companies.

Travis Plunkett, legislative director for the Consumer Federation of America, which represents hundreds of consumer advocacy groups.

Please follow our community rules when engaging in comment discussion on this site.
  • http://www.richardsnotes.org Richard

    While I would never defend banks that issue credit cards and their less than honest ways to make more money from card holders, there is also the responsibility of the card holder to use credit cards responsibly.

    I know it sounds like the old chestnut that if people stopped using drugs, the drug cartels would be out of business but if people used their credit cards more responsibly I doubt you’d be having this discussion.

    Mortgage lenders were predatory in giving people with no jobs half million dollar mortgages but the people with no jobs who took on those mortgages have at least some responsibility for the transactions.

    Credit cards (virtual money) have allowed all sorts of great things to happen (internet commerce for one) but carrying large balances is not one of them. I’m not defending banks here but to single them out as the major part of this problem ignores the credit card holders and their inability to use them responsibly.

  • http://dotcrimemanifesto.com/ Phillip Hallam-Baker

    Until the recent bankruptcy ‘reform’, credit card lenders knew that they were taking a risk when they lent money to credit card holders. The bankruptcy bill made it harder for people to declare bankruptcy. The risk to the issuers was reduced. The issuers responded by relaxing controls on card issue and credit limits.

    In the short term there was a spending boom. But in the longer term consumer spending was depressed as large numbers of people were spending a huge proportion of their income servicing a five figure credit card debt.

    Lax consumer credit is not a benefit to the economy in the long term.

    I work on ways to stop ‘Internet’ crime. They call it Internet crime but actually the target is the legacy financial infrastructure. One crime that has caused particular concern is ‘identity theft’ where the thieves build up a profile of a person – social security number, date of birth, etc. and use it to apply for loans in their name.

    The victims of identity theft sometimes spend years proving to banks or the courts that they were not responsible for loans of tens of thousands of dollars that were lent to a person the bank never met and never bothered to check the identity of.

    We have controls that require a bank to verify the identity of a person who lends their money to the bank. Why are there no statutory controls to require banks to verify the identity of the people they lend their money too?

    Why have the banks been allowed to make the taxpayer responsible for managing their credit risk? Or rather, why was a small number of ‘innovative’ banks allowed to engage in business practices that were essentially negligent, creating an environment where any bank that tried to verify the identity of their customer first would lose customers and quickly go out of business?

  • Joe B.

    Many of the credit card companies have their corporate headquarters in Deleware because the state of Del. instituted special laws to protect and shield the credit card companies. My belief is that since Vice-President Joe Biden is from Deleware, not much will get done.

  • Lilya

    Can the Guests comment on illegal Foreign Transaction Fees.

    Between 1996-2006 Credit Card Companies stuck us abou 6-7 billion Foreign Currency Conversion Fees without disclosing the details. Then they bought the Congress and changed the Class Action Laws. Then they settled the case for $325 million for 40 million claims; giving the false image that everybody will get $25.00

    Net settlement is about $236 million = $4.76 /claim.

    And according to the new Class Action Reform Act of 2005 there is nothing you can do about such outright theft and settlements made on behalf of the victims. They basically wipe out your right to sue and seek justice.

    Can the guests comment on this case. How come the exact same practice is allowed to go on even after this fake Class Action which did not mean anything.

  • Noreen

    How can a credit card company usurp a citizen’s right to jury trial by requiring mandatory arbitration with no Opt-Out to settle disputes? Even if the Opt-Out option were available, shouldn’t the onus be on the credit card company to ASK the cardholders to Opt-IN to mandatory arbitration rather than on the cardholder to Opt-Out?

  • Rex

    The Onion’s take on credit cards:
    Lenders should make it clearer from the outset that they actually want their money repaid.
    Agents can no longer use the phrase “it’s like free money” when describing thir product

  • Ellen Dibble

    Late last November, I was part of a phone survey conducted by some bank. For about an hour and a half I answered yes/no or on a scale of 1 to 10 why I would choose bank X over bank Y. The focus was large versus local banks. I tried to get the survey to say banks should represent their clients in Congress. They take my money, use my money, and they do seem to be maneuvering against me, rather than for me, both in my dealings and in their lobbying.
    What would banks do if they were lobbying on their clients’ behalf?
    Still any bank seems to be trying to trick me into something stupid. This for example, from mail order company that very much wanted me to pay by credit card, THEIR credit card. It turns out if I used the envelope provided, they would charge me interest for three months and proceed VERY slowly. In TINY print: If you want to put ANY note, “like ‘paid in full,’” you MUST mail to this other address. And nowhere was the name of the anonymous bank given. When the check cleared, it cleared for one penny under the amount I had written, one penny under the amount due.
    That was another example of a very last straw.

  • Mark

    Keep this in mind. People used to be jailed for loan-sharking if they charged 20% on a loan. Credit cards regularly charge much more.

    That pretty much says it all.

  • mr.independant

    The bottom line is that banks own the country.
    Witness the recent bailouts and this is just one more thing that will never go anywhere.

    They own you, if you have a card. It’s the 21st century version of indentured servitude. We have no rights here.
    All this is tied to wages as well, as peoples wages have not gone up with inflation they have turned more and more to credit cards. Debt is so huge in this country that this is now the next big financial fall. If you go to a country such as Germany they don’t have this problem. Better social services and the stigma of getting into debt are one factor. People talk about how great this country is, it’s great for the corporations and the top 5 to 10% of wage earners. For the rest of us it’s not so good. One serious illness and your done. How does this relate to credit cards? When a lot of people use them to pay for medical expenses.

    Enough is enough, the banks and credit card companies need to be told this. It wont happen, Summers, Gethner are part of the problem. Schumer is a wall street democrat, the republicans have supported big business’s agenda. So we are being screwed on both ends of the political spectrum.

  • ginnie

    In 1980 one had to have an income and good credit history for a card. Then banks accepted high default and jacked rates up.

    Me? I’ve bought cars, pianos, and all sorts of things every week for over 1/4 history on a credit card AND NEVER PAID A NICKEL IN INTEREST! I use it as a billing service, safer than cash and easier than checks and let the suckers who pay interest pay for this great benefit.

    Lesson: NEVER BUY SOMETHING ON A CARD THAT YOU DO NOT HAVE CASH TO PAY IT OFF THAT MONTH.

  • Kim Bailey

    I think that the current legislature should be amended to establish a *national* usury rate. My thought would be a maximum rate of 18% immediately, which would decline by 2% per year until it reached 12%. It is only in this way that some sense can come of the legislation.

    As to the industry spokes-person, I suggest that credit cards were available to most folk in the late 60′s.

  • George Curran

    I think part of this debate must include the Credit Rating Agencies. The fact is the credit card company policies being discussed have the added effect of creating negative credit ratings. These ratings are being used by employers to screen job applicants, landlords to screen potential renters, and in Massachusetts insurance companies demanded the right to set insurance rates based on credit scores. This misuse of credit scores must be addressed in addition to regulating credit card companies.

  • Joanna Drzewieniecki

    Two comments: re Lilya’s comment – now all credit card companies are charging 3% on all foreign transactions. We just got charged this on the purchase of an expedia.com ticket on Air Canada to Warsaw, Poland. (NPR already confirmed all companies have instituted this charge.) Second, credit cards were not only for the rich until the 1990s. My ex was offered an American Express card in 1979 when he got a doctorate in philosophy. College professors are not “rich.” We went to live in Peru so we were even less “rich” than the average philosopher but we had an American Express card!

  • Nicholas Bodley

    [Please do not publicize my name]
    Psychologically, dealing with credit-card issuers is like dealing with La Cosa Nostra or the ‘Ndrangheta; a friend says their interest rates are typically lower!

    While I wouldn’t advise doing so, I plan to stop paying off my balance, because my sole income is Social Security, which, I’m told, cannot be garnished. 30% interest rate (rounded to the nearest 0.1%) is Mafia-like.

    This account was “closed” long ago, ina time of horrid personal crisis, and isnce then, i have used a debit card exclusively.

    (How many 9′s are ridiculous? “29.99999%”?}

  • Mari

    These credit card corporations behave like predators.
    It’s organized crime, plain and simple. The fact that the practices employed by predatory lenders are “legal” doesn’t make them right.
    Cut up all your cards and stiff ‘em all. They would do the same to US if the deck was stacked differently. Actually, with all the federal bailouts, they already have stiffed us all.

  • http://garys-foods.com Denny Dietrich

    What the the banks/credit card companies (Visa & Master Card are owned by the same banks) doing to consumers they are also doing to retailers too.

    When you buy an item from a retailer, that retailer is charge a discount fee. A $100 purchase could net a retailer $95. It kind of a hidden tax collect not by the government but a private concern. These fees increase the cost to retailers, who in turn have to charge higher prices to everyone to cover these costs.

    These discount fees are not negotiable. Also the discount fees are different each card depending on the “rewards”. Credit card companies don’t fund the rewards, retailers do – often against their will. Over the past couple of years the discount fees have seen big increases has the banks offered more rewards cards and discontinued the traditional low fee cards.

  • Sarah Barker

    My husband and I have very high credit scores. I have several credit cards with small outstanding debts. One I use for everyday purchases. Since January I have discovered that several of the card companies have raised my interest rate from 7 to 29%. When I call they give me the run around but I persist. I make it clear that I will close the account immediately if they are not able to lower the interest rate. So they do lower the interest rate. Its a lot of additional work for me but I am able to threaten them and get results. I am concerned for all of my neighbors who have catastrophic debt and have their interest rates raised in this same way. What happened to businesses (banks) acting for the good of the nation at the same time practicing sound investment practice? Let s look up the definition of usury shall we?

  • Hassan

    How come nobody looks at the real problem? Lending on interest Period. The three monothestic religions (Judaism, Christianity and Islam) all forbid the taking and lending on interest. Muslims have avoided a big part of the current crisis but not having any interest-based debt. An alternative to interest is partnerships and cooperatives where the upside and downside risks are shared.

  • Kathy

    Ms Feddis indicates we can call the 800 # to stop receiving credit card solicitations in the mail. I would like to know why it takes 6 weeks to stop receiving the solicitations once you make that call. That is ridiculous!

  • Dawn Landsiedel

    Why are we paying for the computer crime that they have had to absorb, such as the TJ Max fiaso, where the credit cards loss billions to credit cards numbers that had been stollen. This is still going on.

  • tracy santagate

    Both my sons were 15 years old when they started taking courses at the local Community College. Within a month or so of enrolling in the college, they began receiving “pre-approved” credit card applications. My concerns are that:
    1. The credit card companies were getting their names from the Colleges…regardless of age

    2. The Credit card companies were preying upon my sons

    3. I tore the solicitations up, but I would have been responsible for thier debt if my sons were less scrupulous and began using these cards.

    I tore all of my cards up, I am not using cards, except my bank card. I refuse to support what I consider predatious business practices.

    Tracy

  • Darrell

    1) Did I hear it said that one can not put groceries on credit cards. Buying groceries is a good way to get points on your card.

    2) If you have a bad credit score why does one still receive credit card offers.

  • Peter J. Jensen

    What about debit cards? Is there anything I should know?! It “seems” harmless enough.

  • Mark Lax

    in blaming the irresponsible consumer, the banks sound like the American car companies’ blaming the “nut behind the wheel” for unsafe cars in the 60′s.

    Bill Maher had an interestng point, the middle class’s response to stagnating wages was to borrow to get an increase in their standard of living.

  • Steve

    I recently went to a bank to cash a check I received for services performed. I usually deposit checks directly to my bank account. But I was driving by the bank where the check was written from, my bank is another 10 miles away from where I need to go so I stop to cash the check, only to find that if I don’t have an account with that bank it is a 5.00 charge to cash the check. I asked that if you charge a fee to the customer to manage this account why are you charging me to honor a draft against the account? If this was presented by my bank you would not charge them would you? Answer:No. So Why are you charging me? Answer: If you wish to cash this check there is a five dollar charge, if you owned a business wouldn’t you charge a small fee for services, were no different. You may also open an account with us and well wave the fee.

    I’m so tired of being nickeled and dimed to death by banks. This has ben going on to long. Don’t get me started on hidden fees! trick accounting, just outright legal theft.

  • Adam Marx

    Justice:
    we are called to it but in this world it will not exist (we will always hvae the poor with us)

    Blame:
    banks and consumers (there is not one righteous)

    Action:
    In an internet society one needs a credit card.

    Action:
    Do not use a credit card for any non-essential spending. Starve the beast.

    As a college lefty in 1970′s a New York Times columnist gave a lecture on campus…

    …”how much do the banks have…alot”
    …”how much do they want…more”
    …”when will they stop…when they have it all”

    their goal is slavery.

    My family stopped using credit cards except for internet services over two years ago. Now we find that even that will not starve the beast, my government will now tax me (and my grandchildren) and give the money directly to the banks.

    “Starving the beast” must now include the government.

    I have thought a revolution was at hand. But most cannot be encouraged to opt out.

    People are to tied in to consumerism and greed or are to blind to understand where the real value in life lies.

  • Rex

    I got all kinds of free stuff from credit cards in college but I knew better than to give my real information. They see college students as people that don’t know anything about credit and throw free stuff in their faces to get them to sign up.

  • Dave Fox

    The Credit Card companies receive revenue from both the person they lend to (the consumer) and the merchant. Rates they demand from the merchant are extremely complex and have a lot to do with volume. Rates to the merchant can range from a partial percent to over 7%.

    Also part of the agreement that merchants must sign include an “accept one accept all” clause.

    When the Credit Card companies began to connect cards directly to a Checking / Savings accounts they demanded the same fees as if the transaction were Credit transactions. These are generally PIN transactions. The Credit Card companies are not taking a risk with these transactions as they are denied if the funds are not in the account. But demanded the same fees, the only merchant powerful enough to challenge this was Walmart.

    Further part of the argument about fraud loss would be eliminated if a PIN was required for credit transactions.

  • Sam James

    The current and all recent debates on credit card practices assume the position put in place in the early 1980s, when interest rate caps (then called usury laws) were removed. The reason for that change was the spike in interest rates generally, which exceeded the caps. Since that time card users have been under the threat of what were once considered usurious interest rates. Loan sharks used to charge what we pay now on credit cards.

    Now look at what has changed: prime interest rates are in the very low single digits or even fractions of a percent. Credit card issuers are enjoying astronomical spreads between prime rate and card rates. It is time to resurrect the concept of usury and to define it in a floating manner: a fixed difference between the prime rate and the allowable maximum credit card interest rate, above which limit any higher rate is usurious and illegal.

    Further consider the following: we used to live with minimal credit card use. We could do it again. Credit cards exist because they are profitable to the issuers. In general they need us more than we need them. Insiders will tell you that people who pay in full every month are called “deadbeats” in the credit card industry. They don’t make much money off us- so why should they complain about late payments? Why tack on big penalties ($39 for example) simply for missing a payment when they also get a big interest rate on the unpaid balance? Follow the money.

  • Barbara Rusin

    I would like to see three issues addressed:

    1. Why is that the public is bailing banks out, and yet the lending practices never seem to change? I am actually getting more “checks” in the mail from my credit card companies than I used to. If the banks are in such financial straights, how can they argue that this advertising practice is cost-friendly, or even good practice in the current economy. I would expect a company with bad finances to cut such spending.

    2. If the gov’t. were to give the taxpayers even a percentage of what was given to banks for free, with the mandate that we spend it only to spend down some credit cards, car loans or home mortgages, wouldn’t that put more money into the economy, remove some of these toxic assets, AND have the added bonus of putting more money than a feeble $20 per paycheck into the pockets of the populace to spend on items we actually need (i.e., food)? Why is that the consumer never seems to get the break, but big business always does?

    3. Finally, how can the banks gripe about any stipulations put upon them with all of the free money they’ve received? They have not been to any degree held up to the scrutiny car companies have been to recently. The gov’t. is not making banks restructure so they should stop pouting about it and put up with a little restriction in return for the mess they created.

  • Christina

    QUESTION FOR ON AIR:

    Could your guests explain what happens when people CONSOLIDATE their balances from several cards to just one card.

    I think we learned that the banks count that kind of transaction as a CASH ADVANCE which they charge at a MUCH HIGHER RATE (perhaps at a rate higher than the rates on ANY of their multiple cards!!!)

    Thanks!

    Chris

  • Carolyn

    It is easy to find out credit ratings, so why do credit card companies issue cards to people who have MAXED OUT on one card. If someone is paying only the minimum every month then the person’s credit is NOT GOOD.

    When one uses the bankers money, they pay. Paying the minimum is a hook so that we now are similar to previous eras when people were hooked and owed “THE COMPANY STORE”.

  • Doshi

    In addition to wider gaps in wealth, there is a greater and greater volatility in families’ income.

    The BANKS are making it work by making household expenses more volatile as well. Someone could do a great job of managing their budgets by watching income and expenses.

    But with the JOB MARKET making income “iffy” and the BANKS throwing credit on people and also raising rates with hair-trigger rules, expenses can quickly increase and push families over the edge.

    I like how the banks’ representative is NOT TAKING ANY responsibility for the way this crisis is affecting families.

  • Jeremy

    Is there any reason to go with a bank instead of a Credit Union? The National Credit Union Administration sets the usury limit for credit unions at 18 percent. Credit Unions also seem to be doing just fine through this financial mess. Why don’t we all just dump the banks?

  • http://WBUR Kate

    I agree with caller Kemal… The banks want to make money off of us. I have ALWAYS paid my credit card bills in full each month, and what has happened? Bank of America has shortened my billing cycle from 30 to 28 to 25 to a 21 day billing cycle just to trip me up.

  • Doshi

    Banks are making it worse….

  • Kim

    My mother and my stepfather received unsolicited “You’ve been approved” credit card solicitations in the mail. I asked the credit card agency how they develop their mailing lists, and received an extremely vague answer in reply. Then I asked the agent if they truly wanted to extend credit to a woman who was suffering from Alzheimer’s, and a man who had been dead for several years.

    My parents were removed from their mailing list, but now I understand they would have LOVED to have given a card to my mother. The credit card agencies have zero responsibility to affirm the recipient has sufficient cognition to handle debt responsibly, and my mother would have been legally liable for any charges made.

  • mr.independant

    Nessa Feddis is nothing more than a mouth piece for the credit industries and the banks. She keeps spinning and spinning and the more I listen to her the more I see red.
    She is full of BS, period. She keeps saying if the credit card bill gets passed they the credit card companies will make it more difficult to get credit. This is a threat, it’s amazing how when these corporations are threatened with any regulation they use threats. They act like gangsters.

  • Kim Bailey

    Interesting. Usury was first mentioned here at the half-hour break. It was mentioned several times here and at least twice by the callers. How come it never made it to the air?

  • http://www.votingbloc.org Liane

    I agree with the last comment that the term ‘usury’ should have been more of a focus. Currently the credit card companies would argue that they are not engaged in usury practices because their interest rates are not above what is considered ‘lawful’. That is because there is currently no federal legislation that protects the consumers! I went to http://votingbloc.org/Credit_Card_Rights.php
    and joined the Credit Card Bill of Rights Voting Bloc. I urge you to do the same! Let’s see if a bloc of concerned citizens can take on the big banks that run Washington!

  • Dave

    Interesting about that website, it seems to have a different angle on approaching some of these issues. If something like that ever became big enough it would create major impact. I’m a new fan of votingbloc.org

  • Phil

    It’s about time a site like that was created. Has it been around for a while?

  • millard-fillmore

    “..there is also the responsibility of the card holder to use credit cards responsibly.”

    Agreed. But who sets the limits on that responsibility? The CC companies and the legislature, or the consumer?

  • millard-fillmore

    “It wont happen, Summers, Gethner are part of the problem. Schumer is a wall street democrat, the republicans have supported big business’s agenda. So we are being screwed on both ends of the political spectrum.”

    Don’t forget our Vice President Biden – he was more-or-less a representative of credit card companies in the Senate.

  • Rene

    Bankruptcy reform made it “safer” for credit card companies to lend to questionable borrowers. We should go back to the old rules where it was easier to declare bankruptcy and have your debt cleared. This would force the credit card companies to exercise much more caution in choosing their customers and extending credit limits.

  • Fred W. Bracy

    People like the woman you had on today, Tom, from the WSJ need to be told straight out, “You and people just like you are the number one reason why the American Century has just ended.” Don’t they have kids? Don’t they want a better life for their children and grandchildren than they had for themselves? What’s going on here? Well I’m pretty sure I know. It’s neoconservatism walking the plank and smelling the salty ocean waves just below their feet, and unless they can dupe 300 million or so voters into doing a quick U-turn back toward the Reagan-Bush mother ship, they’d better hope they can sprout gills.

  • Jeff Ladd

    Nice show on credit cards, 3 comments and thoughts
    1. CC companies also charge a fee for late payments. These are simply additional ways to increase interest rates on very small loans to humungous rates. It is an incredible system of usury when rates are as high as they are.

    2. Raising rates from 9 to 29 % is totally hostile and inflamatory, to discuss it like it is a “good” or “reasonable” business practice in nonsense. There is no excuse for that. If the cc companies need a defense why not temporarily stop the cc card when payments are not forthcoming. Try doing that in any small community and see what happens.

    3. Where are the entrpreneurs? the competition? Is there something in the CC system that puts up barriers to others entering the business? I think with some “taking care of the customer” philosophy one could compete very well with these pirates.

  • Wilson Samuel

    Hi Tom,

    Nice I believe, however I would be able to listen only in the evening or via the podcast.

    Anyways, would have loved to see our Elizabeth Warren and someone from OCC on the show.

    Keep it up, sir!

  • Alfred Dwight

    The best way to handle the banks is to turn them into utilities as Stieglitz has suggested. Banks issue nothing of value. When they go on real risk then there would be changes. They have been given the legal right to create debt from thin air under the Federal Reserve Act of 1913. Do away with that act and return to sound money while at the same time making banks the stewards of our money versus the owner of our deposits in due process and the problem of the bank ends. As for those banks that use risk based capital. When the investments fail so does the bank.

  • mr.independant

    This is not a democrat or republican issue. They are both in the pockets of the banks and CC companies.
    This program was way to soft on the rep from CC companies.

    She kept using the threat that if there is regulation controlling how they gouge the American people and business that they will stop issuing credit or it will become harder. Does anyone see anything wrong with this statement? It’s absurd, does Nessa Feddis really think that the CC industry can hold the country hostage.

    Here is how I think it should change. Right now the banks are giving us the people with accounts less than 2% interest. OK I think 5% to 10% is more than enough for these loan sharks. Late fees should be capped at 2% to 3%. That’s it. No other fees should be allowed, period.

  • William

    CitiBank’s “Credit Protection Fee”

    I am surprised that, in these discussions, I have not heard more CitiBank’s dubious “Credit Protection Fee” programs. I’ve had a CitiCard for ~ 10 years now, so I can speak some on this particular program.

    Complaint #1 – Harassing solicitations
    I initially enrolled in the “Credit Protection Program” because Citibank representatives were calling me almost every other day, telling me that I needed to enroll in this program to be “protected”. I was busy, and didn’t have time to investigate, and wanted them to leave me the heck alone, so I said “fine, whatever”, enroll me in this program.

    Complaint #2 – Euphemistic / unclear phrasing
    I didn’t know what the “Credit Protection Program” was, but it only makes sense to be “protected” in relation to financial issues, right? Not really. The name “Credit Protection Program” is a euphemism. For this program, you pay an extra fee each month, and if you lose your job or something, Citibank makes the mimimum monthy payment on your account. (The fee, by the way, is a percentage of your balance…I found out one day that I’d been wasting $40 per month because I was enrolled in the “Credit Protection Program”).

    Complaint #3 – Waste of my money
    Why ever would anybody pay to be enrolled in this program? Making the minimum monthly payment is in the interest of Citibank Corp, not me the consumer. Sure, if you lose your job, Citibank makes a minimum monthly payment for you. But that only means they bleed away more of your money due to interest on your account balance. And the monthly fee associated with this program is so absurd, I can’t imagine any circumstance in which a well-informed consumer would choose to enroll in the “Credit Protection Program”.

    Complaint #4 – Trying to cancel the program
    I had to call at least 3 times in order to get out of the program. Lets just say that it was clear that people answering the phone were being paid on some type of commission, such that their own paychecks increased if they prevented people from cancelling the program. Each time I’d say I want out of the program, they’d start listing all the reasons I need to be “protected”. Ultimately, I had to have a mini shouting match with the customer service rep in order to remove myself from the program.

    Lastly, I’ll just mention why I got my CitiCard 10 years ago in the first place. Why? Because CitiCard reps were on my college campus, giving free Tshirts to any college freshman that would sign up for a CitiCard account! Indeed, the college freshman…if ever there was a model for responsible credit handling…lol (i.e., if you weren’t planning on profiting from irresponsible borrowing, why would Citibank give away Tshirts on college campuses in order to coax freshman into signing up for accounts?)

  • Ellen Dibble

    Me, too, William. Though I had been asking both banks and my insurance company to come up with some plan for dealing with reality if everybody got avian flu (the threat at the time). All banks were spamming me to pay additional percentage points which when I tried it for a trial month quickly became clear for what it was: ruinous for me; gravy for them. Like someone else on this forum, I had to pull rank, so to speak, by threatening to pay off the loan immediately. It seems to be the only thing the banks answer to.

  • http://www.howda.com Leslie Novak

    My take is the economic days of not using credit cards is long over. you cannot even rent a car if you don’t have a credit card. and you receive checks in the mail just like your bank. it is all so “normal” for everyone to use cards. and the advantage taken of consumers is outrageous and in some cases, like 29% interest rates popping up on a card one has had for 10 years when one payment is late, is criminal. turning to non profit consolidators 8 years ago has saved me from going bankrupt. since I have a company and do not own my home I cannot get a conventional loan anymore. I had them with banks for 20 years.. but when the Bank of American took over my bank, all turning over loans, stopped. now I use my cards and manage them in order to keep running my business and pay vendors and keep working. when the percentage rates are changed I talk to the card customer service, supervisors, but inevitably the answer is “we cannot do anything for you” .. and then I call my consolidators.. add the cc to my list, dropping the interest rate considerably and set about to pay off all my cards. I have done that for years. is there another way?

  • Ellen Dibble

    I heard somewhere not to consolidate loans, that it is preemptive in some way. Like you, I have my own business; like you, I don’t own my own home. The banks seem to view me as prey, likely to default, waiting to pick up the remains if possible. So I thought consolidation probably was another scam. Certainly the rates offered were way higher than what I could find on the open market.
    I even use cash available in life insurance equity when needed. It’s like riding a bucking bronco keeping afloat, between changing business needs, and changing credit availability. The idea of “free time” is just so yesterday. So last century.

  • Brett Greisen

    Step 1 = repeal the latest bankruptcy “reform.”

    Step 2 = re-instate federal usury laws.

  • Chuck Tilly

    Dump the banks! I haven’t done business with a bank in 30 years. Credit Unions are far more responsible and fiscally sound. My checking, savings, mortgage, auto loans, and credit cards are all through my credit union. I am having a hard time understanding why people do business with banks.

  • Ellen Dibble

    As far as I know, there are no credit unions within range of where I live. I wouldn’t get a car just to be able to reach a credit union, given that banks are supposed to be responsible. Also, no credit union has ever sought my business. I guess they save on advertising. Or the banks squeeze them into corners where they are not so accessible except to certain memberships.

  • Arnold

    The solution is simple: abolish all forms of credit and lending. Cash only economy. This will force people to live within their means and not to some standard they can’t possibly attain.

    If you can’t pay cash for it, you can’t get it.

    Same for the government. Hand to mouth economy. It’s that easy.

  • Ellen Dibble

    Try starting a business without any wherewithal. Depending on what your skill is, it’ll take you till you’re about 65 to get the ball rolling. Generally, you invest in what will pay off with interest. You go to college on the same theory: this will give me an advantage down the road. If you have no “give,” then if you get sick you can’t pause to recover, you can’t buy medicine to heal with, you can’t get the equipment you need. On and on. The straitjacket to such an economy would cripple us. Only those already rich, or with rich relatives, would get anywhere. You could be an employee, but otherwise, if you have your own plans, nix.

  • Mike

    i agree with Jeremy,

    i really have not heard in the news media about maybe credit unions and making them strong or atleast maybe a alt to the to big to fail banks.

    I have two accounts through the credit unions one with the military and one with the local credit union, i been treated better and helped when needed in determining if i need a loan or not and if i can afford it I stop using my credit card when they raised my rate.

    As my buddy complains about all the nickle and dimming his bank does to him. Just today he found out they changed his interest rate from 11 to 22 and cut his credit with no reasoning at all even never being late on his payments. He really wanted to call in and say his piece.

  • wavre

    To anyone who will have the courage and patience to stay open minded, it’s long but kind of interesting!

    http://dotsub.com/view/7281f5dc-d4b1-4315-abb7-143becd34f49

    radical change of paradigm, isn’t it?

  • Alec Simpson

    I feel sorry for the counsel who has to defend crooks. It must be ackward to have to make a living this way.

  • Lilya

    I sued Bank of America over Foreign Transaction Fees in Small Claims Court.

    Because, I did many years of Peace Core and international photography assignments, I used my credit cards (MBNA) for about about $1,444 (over $120K of charges) accumulated Foreign Transaction Fees, instead of the $5.00 that was offered with the Class Action Suit.

    Bank of America employed Choate Hall & Stewart LLP in Boston. They filed and filed hundreds of pages of briefs to Small Claims, for which I had to respond. After appearing a few times, they postponed the trial due to scheduling conflicts of lawyers. The Courthouse bent over backwards to accomodate their wishes. Finally, they brought one executor of the Class Action chorus and one lawyer from NYC to the trial. Without even being able to see the Judge, they convinced the Clerk Magistrate to dismiss the case, due to Juristiction issues of Class Action suits. And they won; meaning I had no right to dispute the decision, due to the nature of Small Claims rules.

    I estimated that they spent well above $15K-20K for pounds and pounds of filings just to avoid a defeat which could have been used in future suits.

  • deborah

    I agree with Mr. Independent: “The bottom line is that banks own the country.”

    Modern bankers are slick thieves who know how to manipulate Washington and the media.

  • justanother

    There’s a expression, it takes 2 palms to clap and noise, so this is greed meets greed, but the difference is the credit card companies are the cons, and the others are just suckers.

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