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Predatory Lending and Credit Cards

More and more families are relying on credit cards to weather the storm during economic hardships and are being targeted by billion dollar credit card companies
and their criminal practices. Recent emphasis on this topic has been making headlines but little has been done to crack down on predatory lending practices.

The most widely spread tactic used by credit card companies is targeting low income, high debt, or minority markets. On top of offering high interest credit to consumers with a higher debt to income ratio, said lenders often times tack on absorbent fees, added-on products or features and charge excessive penalties. So in essence, if you have not-so-great credit you are a credit card companies ideal client. What a great way to kick the hard working American people when they are down. What is worse, is that when offered these lines of credit, more often than not, they do not give you the amount that they offer. As well, they include acceptance fees of nearly one-third of the limit that is given, also processing fees, annual fees, etc. So by the time the card reaches the consumer they are nearly maxed out, most of the time not knowing, and as soon as they use the extended credit they go over the limit and are charged costly penalties.

Many companies that use these strategies to fatten their pockets also fail to follow the guidelines set under the Fair Credit Reporting Act (FCRA). Many reports of collection agencies calling numerous times a day, at late hours or extremely early in the morning, using profanity, false titles, claims and/or threats to extort payment from the targeted
consumer. Little is done to protect or educate the nations public about the laws that are set aside to protect them. A large portion of said companies also include mandatory arbitration clauses into their contracts which make it very difficult if not impossible to take action against them.

The fact is, what these lenders are doing is deceptive in nature. They justify their fees and rates by targeting high risk consumers and then trap them further into the credit trap. Further-more, they justify the rates, fees and penalties they charge because the consumers that they themselves target are high-risk. How about them apples?

Additionally, Credit card companies have been adding universal default clauses to the terms of credit card agreements. The universal default clause allows credit card companies to pull your credit report on a regular basis. If you have been late on any payments, a higher interest rate can be added to your credit card or all of your credit cards. This includes even being one day late on your mortgage, car, or utility bill (if it is reported to the credit reporting agencies). This could not only increase the interest rate on future purchases, but also raise the interest rate on the consumers entire outstanding balance. I.E. if you are late even just once on your car payment, your credit card interest rate could jump from 8% to 29% without you ever being notified. This will be very harmful for consumers who are late on even just one payment with a different credit card or payment that is reported to your credit report.

More and more families are relying on credit cards to weather the storm during economic hardships and are being targeted by billion dollar credit card companies
and their criminal practices. Late(a) emphasis on this topic has been making headlines but little has been done to crack down on predatory lending practices.

The most widely facing pages tactic used by quotation card companies is targeting low income, high debt, or minority markets. On top of offering high interest credit to consumers with a higher debt to income ratio, said lenders often times tack on absorbent fees, added-on products or features and load excessive penalties. So in essence, if you have not-so-great credit you are a credit card companies ideal client. What a great way to kick the hard working American people when they are down. What is worse, is that when offered these lines of credit, more often than not, they do not give you the amount that they offer. As well, they include acceptance fees of closely one-third of the limit that is given, also processing fees, annual fees, etc. So by the time the card reaches the consumer they are nearly maxed out, most of the time not knowing, and as soon as they use the lengthened credit they go over the limit and are supercharged costly penalties.

Many companies that use these strategies to fatten their pockets also fail to follow the guidelines set under the Fair mention coverage Act (FCRA). Many reports of collection agencies calling numerous times a day, at late hours or super early in the morning, using profanity, false titles, claims and/or threats to extort payment from the targeted
consumer. Little is done to protect or educate the nations public about the laws that are set aside to protect them. A large share of said companies also include mandatory arbitrement clauses into their contracts which make it very difficult if not impossible to take sue against them.

The fact is, what these lenders are doing is misleading in nature. They justify their fees and rates by targeting high risk consumers and then trap them boost into the credit trap. Further-more, they justify the rates, fees and penalties they load because the consumers that they themselves quarry are high-risk. How about them apples?

Additionally, course credit card companies have been adding oecumenical nonremittal clauses to the terms of credit card agreements. The universal default article allows credit card companies to pull your citation describe on a regular basis. If you have been late on any payments, a higher interest rate can be added to your credit card or all of your credit cards. This includes even being one day late on your mortgage, car, or utility program bill (if it is reported to the credit reporting agencies). This could not only increase the concern rate on future purchases, but also raise the occupy rate on the consumers intact outstanding balance. I.E. if you are late even just once on your car payment, your credit card sake rate could jump from 8% to 29% without you ever being notified. This will be very harmful for consumers who are late on even just one payment with a dissimilar credit card or payment that is reported to your credit report.

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Article Source: http://www.articles4meandu.com

About the Author (text)

Jamie Hribal is a Senior Debt Consultant at My Debt 101, Inc. helping individuals and families get rid of high interest credit card debt, offering alternatives for bankruptcy and foreclosure. To learn more visit www.mydebt101.com

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