Making a difference...one letter at a time: Credit Card Industry

Check out this article from Time.com. It shows that a few (well a few thousand) people CAN make a difference. When I took issue with one of my creditors, (Wells Fargo Finance), I had about 250 students from three different colleges in Texas write letters to the OCC (Office of Comptroller of Currency) complaining about how the banking industry needs to have some serious regulation because of their predatory lending practices. I got my account straightened out (they were not crediting my account in a timely manner, and were trying to charge me for paying late, when I was actually paying early) immediately, and then this article appeared online. Our letters were a part of those 11,427. Go consumer power!!! If people start standing up for themselves, they would see that the system actually does work, if you work it (and it does not hurt if you are able to bribe 250 people to do your bidding in exchange for final exam extra credit :).

PS, the industry now says it will just recoup the losses caused by the regulations by not making cards as widely available. In other words, not lending to true deadbeats and punishing the rest of us for their irresponsibility ~ they do this by treating people with good credit the same as people who have a history of non-payment! Now there is a novel idea! Some people just don't need credit...(a.k.a. me when I was 19 years old...)

Some good tips to know when dealing with creditors: 1) Do not just bend over and let them screw you. Understand and stand up for your rights as a consumer. 2) Report predatory lenders to the FTC and whichever regulatory commission handles the issues for the particular bank you are dealing with. One good place to start is www.ftc.gov. I have this site in my favourites! If you do not know which agency to write to, visit this site: http://www.sec.gov/answers/bankreg.htm. for a list. Always complain to the FTC. Their online complaint form is very convenient. Predatory lending practices include charging consumers to pay their bill. Have you heard of this? If you need to pay by phone, some credit card issuers force consumers to pay up to $15 (more than some minimum payments) to pay by phone to prevent an (even worse) late fee, which can cost up to $40 in some cases ~ so pay your bill EARLY! Give them no excuse to charge you, because they will. These folks are in business to make money, and they make almost as much money annually from these type of fees (39% of issuer revenue) as they do off the interest paid from accounts. That is why they have been giving more credit to people who have a history of bad credit: they can make more money off the people who do not use the cards wisely than those of us who do (they call those of us who pay off balances monthly and on time "deadbeats!" because they don't make much off us) 3) Call your creditor and ask to have the charge removed (late fee, over limit fee). Many creditors are required to waive two fees per year for those of us who are not as responsible as we should be when paying credit card bills. They don't tell you this, so you have to ask. It can really be worth making the call (up to $40, sometimes more). 4) Always remember, when dealing with the industry, (especially debt collectors ~ NEVER SPEAK TO A DEBT COLLECTOR BY PHONE) to send correspondence certified mail, return receipt requested, and most importantly, write the certified number on the actual correspondence before mailing. This shows the company that you know exactly what was sent and when. Check out the story below for some of the other dubious predatory lending practices employed by the credit card industry (universal default, double-cycle billing, allowing a late charge to bump up an over limit charge or allowing an annual fee to bump up an over limit charge, resulting in an additional, unfair fee, holding payments to assess late fees). 5) Only idiots get secured credit cards. The jist of it is that you basically pay the creditor your hard earned money, usually $500 or so, and they "graciously" allow you to spend your own money using their card, but here's the kicker, they charge you interest to spend your own hard earned money unless you pay it back to them during the grace period before a finance charge kicks in! And, if you screw up and miss a payment, they will charge you a hefty fee for not paying back your money that you initially gave them in a timely enough manner. It truly is infuriating, and no sane person would get involved in this type of SCAM! 6) Take the time to actually read and understand what you are getting into. All this information is disclosed (albeit in language that would put most of us into a coma after looking at it for more than a minute) in the fine print that card companies know consumers don't read. Basically, you are agreeing to any terms the company chooses to impose on you during the duration of your using their product. Believe it or not, they include a clause that says they may change the terms and conditions on you at any time; in other words, if you pay another bill late to a completely unrelated company, and your creditor gains knowledge of it (by checking your credit report, which they do with surprising tenacity), they can raise your interest significantly because you have become a greater risk to them than when you signed up to use the card (see first section in article on universal default). 7) Finally, check your credit report annually. I had one student find that her credit had been accessed to buy a new home! She could not thank me enough for telling her about free credit checks. Anyone who has been denied credit in the past 60 days is entitled to a free credit report from the big 3 ~ Experian, TransUnion, and Equifax. It may seem like a pain to do all this letter writing and checking up, but you can find a sample letter on the ftc website that will make it easier. And, I promise, once you start seeing results, like in the following article, you will truly feel that you have made a difference that not only affects you, but also many, many others. Now, go get the bastards!