Friday, March 09, 2007

Credit card companies on display in Senate hearing

The credit card industry is under attack as a Senate subcommittee has taken on the task of trying to make some sense out of credit card industry standard practices, like trailing interest, grace periods, and terms and conditions.

Everybody knows that the point of the terms and conditions is to confuse and obfuscate the rules by which the credit card company governs its relationship with you. Such things as "we can change these terms at any time" and having the card holder have to opt out of such changes by closing (and paying in full) his account.

One practice I especially love is the one where the card company will raise your rate if you're late making a payment to somebody else!

I certainly hope that the Senate makes some sense of this and levels the playing field. Bankruptcies, accelerated by the credit card industry-backed new bankruptcy law that went into effect a year or so ago, have increased 609 percent. That is astonishing.