What Debt Card, Oops! I Mean Credit Card Companies Don't Want
You To Know
Where large sums of money are concerned, it is advisable to
trust nobody. Agatha Christie (1890-1976)
You notice I called credit cards by their real name in the
title of this chapter. Make no mistake, the outcome of using a
credit card is to create debt. It would be a lot more difficult
to market a "Debt" card but that is what they are. In case you
weren't aware of it, Federal regulators are pressuring banks
into raising the minimum credit card payment from 2% to 4% to
"help" consumers get out of debt quickly but somehow failed to
address the usury interest rates charged by these companies.
Here are a few things you might not know about the credit card
industry.
Credit Card Industry Facts:
The credit card industry earned $1,200,000,000,000 last year.
That is $1.2 TRILLION in profits.
In 2004 consumers were charged $14.8 BILLION dollars in late
fees.
Here's a cute little tactic used often by our credit card
brethren. Not posting your payment on the day it is received so
that they can charge you the late fee. They made millions using
this technique last year.
Changing the due date or mailing the bill so that it is
difficult at best to meet the deadline and there by charging
another late fee. With two late charges on your 'record' your
interest rate goes up as much as 10 points. This can be done
without notifying you, by the way.
These companies have even resorted to not mailing out statements
so that you will pay late and therefore be charged at least $29
in late fees and sometimes more.
Signing you up without your permission for credit insurance that
virtually never pays out. Checking your credit reports to see if
you are charging on other cards and if it is 'deemed excessive',
raising your interest rate by as much as twice your current
rate.
Charging you a $25 fee for NOT USING your credit card.
Capital One has been sued because their customers mailed in the
checks a full two weeks before the due date but were deemed
late, charged the late fee and the interest rate was hiked to
double digits.
Citibank paid a $45 million dollar settlement because they
improperly assessed late fees and raised the interest rate up to
24% if the customer was late on any payments to other creditors,
even if you are current on every payment to them.
The largest settlement by far against a credit card provider was
against Providian for $300 Million dollars! Why? For improperly
assessing late fees and charging customers for things they never
ordered like credit insurance. The amount of the fine was
proportional to the amount of abuse.
Sometimes because of the stress associated with these fees and
abuses, people go out and try to borrow their way out of trouble
with debt consolidation loans. This only adds to the problem if
they don't tear up the cards.
Credit card debt has gotten to the point that it is not like
owing the general store and not paying off the bill at the end
of the month or when you get your next pay check. This is loan
sharking at its worst and some say the rights of individuals
were taken away by the changes in the bankruptcy laws made
recently due to the efforts of lobbyists from the credit card
companies. I think the little guy needs help and that is why I
wrote this book. There is a term used often in Real Estate:
"Operating from a position of superior knowledge". One can get
sued for taking advantage of another for just this reason. Seems
to me, the credit card companies mentioned above along with many
others, are operating from a position of superior knowledge.
According to Robert Hinsley, a Houston attorney, "Being a good
customer is not going to protect you," says Hinsley. "Nor will
paying your bill on time each month protect you. Many of the
major cards -- First USA, Chase, Capital One, Providian,
Citibank, Penney's -- have been sued over practices regarding
unfair billing practices and blatantly using tactics to cheat
you out of your money. There is plenty of evidence that
indicates most credit card companies think you are dumb and
helpless and will not take any action. So they can easily use
dirty tricks to cheat you out of your money."
Now are you ready to fight back and negotiate a settlement with
these people? Don't be discouraged because the good news is, you
can fight back. You can negotiate and you can reach a settlement
advantageous to you! Pull yourself up to your full height, take
a deep breath, know you are not alone and let's get started!
*This is an excerpt from "The Negotiate Your Way To Financial
Freedom From Credit Card Debt Ebook" found on
http://www.iwantafreecreditreport.com/myebook.htm.