Consumers Beware Of Shady Credit Card Company Tactics

The Credit CARD Act certainly has the entire credit industry in an uproar. Surprising, considering that what the act simply implements several regulations which would make credit cards much more safer and fairer for consumers, something which most credit card companies would readily claim. However, for anyone who has been following what has been happening in the credit industry of late, it is quite clear just how much the concerns of consumers matter to credit card companies.

Just last October of 2009, the Pew Health Group ran a study which found that well known “unfair or deceptive” practices – as labeled by the Federal Reserve – had not diminished as expected. These practices remained just as common as they were before the Credit CARD Act got passed into law last May. The study found out that, of all the cards surveyed, not one would have passed the requirements of the new credit card rules. All the surveyed cards also carried at least on of the so called “unfair or deceptive” practices of the credit card industry.

Last month, a Center for Responsible Lending report showed that credit card companies were charging companies with fees that are not specifically addressed in the Credit CARD Act. This includes charging inactivity fees for credit card accounts that are not in use, increasing the fees for balance transfers and cash advances and using a “pick-a-rate” billing formula where they calculate the credit card holder’s interest rate according to the highest prime rate value for a period of 90 days.

Just recently, a consumer complained about receiving a call from Capital One that used what she terms as “fear-based” tactics to get her to waive the new credit card guidelines so that Capital One could continue charging her overcharge fees.

The new credit card rules which will activate this February. One of the changes that the rules will bring is requiring credit card companies to stop charging consumers fees for exceeding their credit limits unless the consumer specifically opts in to the service. Called overcharge fees, credit card companies see huge profits every year from consumers who pay fees for going over their limit. What is even worse is that some of these consumers did not know that they were enrolled in an overcharge protection plan and were liable to fees if they overcharged their credit cards.

Spokeswoman for Capital One, Pam Girardo would not address directly the consumer’s complaint but said that their agents are “coached to respectfully educate cardholders.”