Sep 29, 2009 7:41 pm US/Eastern
Credit Card Companies Put Consumers In Vice Grip
In Advance Of New Reforms, Some Companies Are Finding Ways To Say You're Payments Are Late When They Aren't
NEW YORK (CBS) ―
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Jeff J. Mitchell/Getty Images
Despite some credit card reforms already in place, many consumers are still dealing with rate hikes, shrinking credit limits and frustrating customer service.
CBS 2 HD has the latest on how banks are putting the squeeze on customers and what's being done to stop it.
Tyler Schaeffer wants to pay his bills on time, so instead of a check he electronically pays through his bank.
"I set it up electronically, automatically and then check it just to make sure that it's far enough in advance," Schaeffer said.
And yet on his Chase credit card, even though he paid two days before the due date, Chase recorded the payment a day late.
"I made sure the payment got there on a Friday but they still posted it on Monday and it still said I was late," Schaeffer said.
And hit him with a $39 late fee. And what's worse, Chase automatically hiked the interest rate. Schaeffer calls it a bait and switch since he signed up just for Chase's low, low interest rate.
"Zero interest rate for balance transfer and credit card purchases to get my business," Schaeffer said.
And while he's fought it through letters and calls for five months, he's gotten nowhere. He's not alone.
"It was very, very stupid on the part of the bank," said Adam Levin, chairman of Credit.com.
Levin said while this is currently legal, soon it won't be under the Credit Card Act.
"The reality is banks are in business to make money and they do it any way they can," Levin said.
Just Tuesday, the Federal Reserve proposed new rules to better protect Americans from sudden interest rate hikes. Set to roll out in February, several congressmen want it even earlier, like around Dec. 1.
"They've used that time to take advantage and completely plunder the consumer. They've used it to sharpen their sabers and cut them to the throat," said Rep. Gary Ackerman, D-Long Island.
Chase told CBS 2 HD it is investigating Schaeffer's payment issue and hopes to finally resolve it within a day or two, and told us it offers free payment reminders and the ability to set up automatic payments. But under the new Credit Card Act the rate increase Schaeffer got will not be allowed.
While the new credit card rules have been finalized, the bill to force banks to comply by Dec. 1 is not. A House committee hopes to get it out of committee and vote on it shortly.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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