Tuesday

Capital Scum

Here is a perfect example of how corporate america preys on the poor and middle class.

Some consumers complained that they received pre-approved offers of credit that advertised credit limits of up to $5,000, but received cards with limits of $200 or $300. Consumers also complained that these low limit cards had very high fees: a $59 annual membership fee, a $29 late fee, and a $29 over-limit fee.

Consumers who charged amounts close to the $200 limit the first month would already be over limit when they received their first statements because of the $59 annual fee.

Some consumers quickly realized they could not afford to keep the card because of the high fees and high interest rates. Consumers who tried to cancel their cards were told they could not cancel so long as there was an outstanding balance.

In the meantime, late fees, over-limit fees, and interest continued to accumulate even after the consumers tried to close their accounts. Paying their minimum monthly balance did nothing to reduce these consumers' balances.

1 comment:

loraksus said...

Only $29 as a late fee?
Credit card companies have a great thing going for them. Where else can you completely redefine the terms of a "contract" with only 14 days notice?