Can I say again how much I like having a Democratic majority? A hearing to examine protecting individuals against predatory corporate practices. Can you imagine a hearing like this happening during the 109th Congress? Me neither. This almost makes up for the Democrats caving on the bankruptcy bill. Almost.
It's time the federal government began protecting Americans from unsafe credit cards, like it does from unsafe toasters and cars, consumer advocates contend.
Credit-card companies routinely offer cards that have been loaded with tricks and traps that consumers don't know about or understand, causing millions of Americans to become hopelessly mired in debt, Harvard law professor Elizabeth Warren told the Senate Banking, Housing and Urban Affairs Committee during an oversight hearing Thursday on the industry.
Those tricks and traps, Warren said, include hiking interest rates when a cardholder falls behind in payments to other creditors, charging fees for payment by telephone and a practice called double-cycle billing. That's when a cardholder, for example, pays $90 of a $100 charge but then next month the consumer is charged interest on the entire amount rather than just the $10 balance.
It takes a lawyer to figure out the terms and conditions of most credit-card contracts, Warren and other consumer advocates complained. Increasingly, credit-card companies are targeting college students, military personnel, senior citizents and the disabled with pre-approved offers, the critics said.
The Agonist looks at it closer.