Democrats to debate credit card practices

The Republicans were perfectly fine with ignoring the practices of the credit card industry. Whatever Big Finance wanted to do, they could do. Even this past weekend I heard one American tell me about a brand new credit card that arrived in the mail – ready to go after one phone call – despite never even asking for the card. Who actually thinks such programs are beneficial or safe for consumers?

With Americans weighed down by some $900 billion in credit card debt _ an average $2,200 per household _ practices of the very profitable industry have been ripe for scrutiny by the Democratic-controlled Congress. They have also grabbed the attention of the Federal Reserve, which plans to require credit-card issuers to give customers at least 45 days’ notice before raising interest rates and to provide clearer information on fees.

On Tuesday, Levin’s subcommittee, which has been investigating the industry, will look at how credit-card issuers raise consumers’ rates — to as high as 30 percent — when their so-called FICO credit scores decline even if they’ve paid credit card bills regularly and promptly. In many cases, consumers have little notice of the increased rate, which are automatically triggered by declines in FICO scores for reasons left unexplained, the subcommittee found.

Ultimately it wouldn’t be such a bad idea for people to get rid of personal debt but until that happens, the system needs to be a bit more fair. It doesn’t always have to be a one way street with Big Finance, despite what the GOP likes to think.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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