The Victims of a Credit Card Industry Gone Wild
On Thursday, President Obama delivered a town hall address where he urged Congress to pass credit card reforms he can sign by Memorial Day. Introducing the President was Chris Lardner, a New Mexico woman who, with her husband, are perhaps the best examples of victims of a credit card industry gone wild.
The couple noticed that a tuition payment was accidentally charged to their credit card, putting them over the limit. In turn, their credit card company jacked their interest rates up to nearly 30 percent. To date, the error still hasn’t been fixed despite repeated calls and letters to the company.
We spoke to Chris on Friday’s show (watch the video below for the full segment).
This kind of abusive behavior on the part of the credit card industry is precisely what will stop once one of the credit card acts currently making their way through Congress is passed, says John Ulzheimer. New provisions will prevent card issuers from allowing charges to go through that push people over their limits. In Chris’ case, they let it go through because she had good credit – a true ‘damned if you do, damned if you don’t’ moment. They then used that to punish her with late fees and exorbitant rate hikes.
Slimy, isn’t it?
The credit card industry has been saying that reform will end up costing consumers in the end, but Ulzheimer isn’t buying it. The fact is that issuers will never avoid high risk customers because that is where they make their money. Of course, if you just refrain from carrying a balance this all becomes irrelevant. But as we know, sometimes balances happen. That doesn’t necessarily mean we should be aribitrarily punished with skyrocketing fees and lowered limits.
As for Chris, we have a feeling after being singled out by the President that her credit card company is going to be willing to listen to her now.