Report finds credit-card firms push users deeper into debt
A new report on credit card debt accuses card issuers of pushing consumers to borrow beyond their means and calls for new regulations.
The report, released by the National Consumer Law Center in Boston, says the industry’s tactics are particularly devastating to older Americans who have fewer resources to dig themselves out of a hole.
Noting that 2.3 general-use credit cards are in circulation for resident of the country, the report says, “The main problem is that the industry is set up to make the most profit from those consumers who get into trouble with credit cards.”
It cited penalty fees, punitive interest rates, and minimum payment terms that keep cardholders in debt.
A spokesman for the American Bankers Association declined to comment on the report.
The study recommended steps to curb card debt, including requiring better disclosure of terms, fees, and interest rates.
The report said that a result of those recommendations may be that people who pay off their credit card balances each month will pay higher fees. It may also mean more difficulty obtaining credit for consumers with poor or no credit histories.
- Source: The Toledo Blade, Aug. 1, 2006
