Fun with credit cardsPosted: November 23, 2004
Watched a fascinating episode of Frontline today about the credit card industry. Did you know:
- Credit card companies can increase your interest rate if you miss a payment with any other creditor? Say, Bank of America is your Visa card. You miss payment on your Shell card, B of A can raise your monthly interest rate.
- Credit card companies can raise you interest rate for any past purchases you made. So, say you bought a bunch of furniture at 8.9% interest last year. If you credit score drops at any time, they could raise your interest rate on all past purchases to pretty much any rate they want.
- Thinking about transferring your outstanding balances to a new card offering zero percent interest for six months? If you’re late on any payment within that six month period on that new card, zing, they’ll start charging their standard interest rate (likely +20%) on the full balance immediately.
- According to the Better Business Bureau, out of 1000 industries they track, the credit card industry is number one in consumer complaints in the nation.
- Credit card companies resist adding a simple one line statement underneath the minimum balance amount for a given month informing customers how long it would take for them to pay off their entire balance. Why? Because they say it would confuse customers. Wah?
- Credit card companies make more money from fees than interest collected. Today late fees are 4-6 times more than they were 10 years ago.
- Last year City Bank was more profitable than Microsoft or Walmart.