Remember when the Senate set out to help consumers with all that small print on their credit card statements and contracts? And, what a fine job they did!
During the past few months even the better credit risk credit card holders have seen their interest rates soar to 29.9%. Others have seen their credit limits be cut in half. But, First Premier has outdone the rest. They are offering credit to subprime consumers at 79.9%. That’s not a typo! 79.9%!
While Congress has been working so hard to help consumers the best we can think is the old joke about the three greatest lies. I won’t go into the first two, but the third was “I’m from the IRS and I’m here to help you.” Well, Congress in its infinite wisdom and circus-like atmosphere seemed to forget to cap interest rates when it was working on credit card reform some 16 months ago.
As most of us recall Congress put in place consumer protection rules to protect consumers from predatory credit card banks. Those “protections” are about as effective as a broken condom. The rules and regulations should have been effective immediately. Instead, Congress listened to the lobbyists for the banks and delayed implementation for 18 months. Those new rules go into effect in February.
However, until February the credit card banks can do anything they want to do to raise rates or put hidden fees in place. And, they have — including First Premier’s offering of credit to subprime credit risks at the staggering rate of 79.9%
Of course, the consumer does not have to accept the offer. However, the whole idea of the consumer protections on credit card banks was to protect those who have little understanding of credit card jargon. The 79.9% interest rate is clearly stated on the proposed contract. But, whether hidden or written in bold red typeface it is wrong, just plain wrong.
South Dakota and several other states, years ago in order to attract credit card banks did away with limits on interest rates. The Supreme Court upheld the states right to set interest rates, saying further that credit card banks can set the interest rate based on the state in which the credit card bank is domiciled, not the state where the consumer lives.
Now, we see that as the deadline to screw the consumer looms on the horizon the banks have scrambled to get ready for the biggest financial screwing since credit default swaps. At this time it appears that First Premier is the only bank offering the 79.7% interest rates. However, if one credit card bank is allowed to get by with it the others will follow. We have seen it time and again.
Even if no one in the entire world accepts First Premier’s terms it is the flagrant audacity that is appalling. In a time of economic crisis across the nation when taxpaying Americans have been held hostage by the financial system we see that that the banks have no intention of working to help the country. Instead, they are continuing to take advantage of every golden opportunity.
Congress failed miserably in its effort to rein in the predatory practices of credit card banks. It is hard to believe that no one in Congress stepped up in favor of the consumer. It is hard to believe that no one in the circus saw this coming. And, if in fact anyone steps forward and says he (or she) did not see this possibility and probability he is admitting to his incompetence to represent the American public.
These are the same clowns that are now working to “fix” health care. That’s frightening, isn’t it?