C4CC Study Finds That Credit Card Companies’ Recent Rush to Raise Interest Rates and Implement New Fees Is Par for the Course as Credit Card Companies Con Customers and Small Businesses
INDIANAPOLIS- PIN Payments News Blog- On the heels of reports that credit companies are in a rush to raise interest rates to historic highs and implement new fees before regulation that limits such action takes effect, Consumers for Competitive Choice (C4CC), a diverse, national coalition of Americans including consumers and small businesses who support a consumer-focused economy, has just released a study titled, “The Credit Card Con,” (PDF/50 pages) which examines the industry’s notoriously bad acts.
The study notes that Visa and MasterCard have taken advantage of their dominant market positions to raise prices while curtailing credit. Even as the nation’s automobile, manufacturing, entertainment, real estate and retail sales industries have struggled to make ends meet – cutting prices to bolster sales and jobs to cut costs – the credit card duopolists report strong profits – a direct result of raising interest rates and implementing new fees for card holders. This in addition to the already excessive transaction fees that cost American consumers $48 billion in 2008 alone – triple the level in 2001.
“This is certainly not the reaction that Congress expected when responding to a mounting public outcry by passing the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act),” said Bob Johnson, president of C4CC. “However, rather than react responsibly, the industry has flouted the will of Congress and the Administration by moving quickly to raise rates, increase fees, and reduce available credit before the law takes effect next year. These are the types of tactics that the credit card industry is infamously known for – and they have to stop.”
The report comes amidst new laws that Congress is considering related to credit cards and financial services. With unemployment hitting double digits and small business growth being impaired, it is imperative that our representatives and senators in Washington take steps to reduce this unfair burden. As bills begin to wind their way through the committee process, it is critical that important issues such as transaction fees are addressed in any legislation that is put forward.
To access the study, click here.
About The Credit Card Con
The Credit Card Con is a project by the Consumers for Competitive Choice. For more information, visit The Credit Card Con website at www.thecreditcardcon.com.
