12/05/2007

It's A "Free Market" Not A "Fair Market"

A U.S. Senate subcommittee on Tuesday hauled credit card companies onto the mat for their practice of using credit scores to increase the interest rates cardholders must pay.


"If a customer's risk profile increases, we may increase their annual percentage rate. This is largely due to the nature of a credit card compared to other loan products -- every credit card transaction can be regarded as a new loan, and we are financially responsible for every loan that is not repaid."

Roger Hochschild, president and chief operating officer, Discover Financial Services.

"Credit card companies go too far when they hike the interest rates of consumers who are faithfully paying their credit card bills, just to squeeze more finance charges from them. Some credit card companies are foisting interest rates as high as 25 percent or 30 percent on responsible consumers, claiming they have become greater credit risks even when those same consumers haven't missed paying a bill in years."

Senator Carl Levin, D-Mich., chairman of the Senate Investigations Subcommittee.

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3 comments:

Mr. Monopoly said...

What ever happened to the usury laws.
Bring them back. 25 to 30 % interest can only be called one thing LOAN SHARKING.

Guido said...

Yea, I thought loan sharker was like 25 percent. Compared to corporate greed heads, at least the Mafia has a heart.

Credit Bureau said...

Speaking of Loan Sharks: Ask Kitty why payday loan companies from Ohio are contributors to her campaign?