April 5, 2001--
A consumer group says credit card companies are charging excessive fees on customers.
The U.S. Public Interest Research Group has issued a new report, which concludes that cardholders are subjected to skyrocketing interest rates and unfair fees.
The report uses terms like "gouged"-- as in "Consumers are being gouged," and calls interest rates on some cards "outrageous."
It also says we are paying hidden fees on certain credit cards.
We all have them and use them. They're
a staple of the American economy.
"Put it on plastic", we say!
But consumer groups say credit cards can also lead us into suffocating debt.
One credit card user says, "I WAS UP TO THE POINT WHERE BASICALLY I WAS PAYING INTEREST AND NEVER PAYING OFF ANY PRINCIPAL."
The U.S. Public Interest Research Group says credit card companies should share in the blame.
Ed Mierzwinski/Public Interest Reseearch Group: "IF CONSUMERS ONLY MAKE THE MINIMUM PAYMENT, THE CREDIT CARD COMPANY WINS AND THEY LOSE BECAUSE THEY COULD FOR YEARS AND YEARS AND YEARS BE TRAPPED ON A DEBT TREADMILL."
The group has just launched an education campaign through it's website, offering tips on credit card hazards such as
- signing up for cards that charge interest rates as high as 30 percent
- late fees as high as $28 a day
- hidden transaction fees
- shorter grace periods.
Ed Mierzwinski/Public Interest Reseearch Group: "CREDIT CARD COMPANIES ARE DECEIVING CONSUMERS ABOUT WHETHER THERE'S AN ANNUAL FEE, WHETHER LATE FEES APPLY, HOW LONG YOU HAVE TO PAY YOUR BILL. THERE'S A LOT OF INFORMATION IN THE SMALL PRINT THAT'S DECEPTIVE."
Consumer advocates are also lobbying congress to restrict the marketing credit card companies do, but don't expect that to happen anytime soon!
The group also says the companies are soliciting new customers more aggressively. It claims the average family now gets eight credit card offers in the mail each month.
