Tuesday, June 17, 2008

Unfair credit card practices and terms?

Okay - so maybe I just don't get it, but I fail to understand several things about the Lucas County Commissioner's resolution regarding credit card terms.

First of all, since when did Ohio's county commissioners gain the authority to tell the Federal Reserve what to do? And, other than placating a special interest group that is advocating for changes in the law, is this just a way to pile on publicity for them and for State Treasurer Richard Cordray who is running this year for Attorney General following Marc Dann's resignation?

As for the 'substance' of the resolution, how are credit card terms unfair? If a credit card has a term or rule or fee you don't like, you don't have to continue with that card. If you don't like a change in fees, stop using the card. There are so many credit cards available these days - and many are willing to negotiate their terms or interest rates - so it's not like you have only limited choices.

And if you continue using your card despite your dissatisfaction with the fees or terms, how is that 'unfair'????

Or are they saying that most people who use credit cards are too stupid to understand the terms and impact of the fees or how they work? If that is the case, then the solution isn't more regulation and restrictions on the market, it's to better educate children so they can handle such complicated transactions in the future. But that would require admitting that our public schools (and parents?) aren't educating our kids well enough for them to function in today's world - and we couldn't have that, now, could we?

And if the populace is so dumb as to not be able to understand credit cards, the solution isn't to have government step in with more regulation - maybe, instead, government can ban stupid people from applying for such cards. Or maybe we can just ban stupidity in general?

These kinds of meaningless resolutions have always irritated me and I opposed many such pointless votes when I served as a Commissioner. But with the current makeup of the Lucas County BCC, don't expect such reason and common sense any time soon. Instead, we'll get 'feel-good' actions that do nothing to really help the economic environment in the county.

8 comments:

Tim Higgins said...

Maggie,

I know that you are asking this question just to test us and see if we understand the "Man Behind the Curtain". So let's see ...

The sub-prime mortgage issue is getting old, the payday loan people are all but gone, and we've demonized the oil company executives about as much as we can for a while. OK, who's left to make us a victim? Oh yeah, the credit card companies.

It doesn't matter that you can shop for almost any combination of terms (from points, to cash back, to low interest rates) that you want. People who have abused their credit need someone to blame other than themselves. And while they are victims of their own stupidity, they are also... voters.

Maggie Thurber said...

And while they are victims of their own stupidity, they are also... voters.

ouch!

Robin said...

Nearly from the beginning of time, people have complained about interest rates from creditors. If you don't want to pay it, don't borrow it.

Victoria Kamm said...

Maggie,

Remember this is the same group that handed out gasoline cards to people whether or not they had cars, that said hotel/motel taxes would pay for the marina and got excited about the extra money from the state because people were losing their jobs left and right.

There will always be companies that deal in the pain of others - payday loans, pawn shops, unscrupulous sub-prime lenders (and title loans are coming). I don't think these are the problems; these are symptoms of the problems.

The BCC should spend more time solving the problems than giving lip service to them.

The A-Hole Lawyer said...

Over the last several years Mrs. AHL and I have done away with all our credit cards. With a debit card we can still rent a car, reserve a flight, and get a hotel. We did so because THEY ARE SO UNFAIR!!! AND GOVERNMENT DID NOTHING TO HELP US! BOO HOOO.

Actually, we recognized the cycle of debt they can support, NOT CREATE, but support, and we acted accordingly. HOWEVER, we have used on occasion - PAY DAY LOANS -when an unexpected expense arose, and we couldn't "just put it on the card." Using that system has saved us thousands of dollars in interest and fees. But now, thanks to our fine Governor and legislators, that option is dead.

Guess we are applying for another credit card in 60 days. Maybe if Cordray becomes AG he will ban credit all together in Ohio and we can go back to the barter system. Start making wampum citizens, your credit is no good here.

T AHL

Sam said...

These "feel good" actions serve mostly to show consumers that their government kind of cares about you.

Where i normally agree that they are pointless, making the rules and reglegations on credit cards more laymen friendly seams like a good idea to me.

People are dumb, how else do you think the average consumer debt per person in the US is $80k... I think these are def. changes for the better in the credit card industry

Mad Jack said...

Or are they saying that most people who use credit cards are too stupid to understand the terms and impact of the fees or how they work?

Give the little lady a cupie doll!

The only possible defense against the rash of foreclosures is just that: The consumer is incapable of understanding the contract. Which, by the way, is why really dumb people like me hire really smart lawyers, like Johnny The Hammer.

It's the same thing with the credit card companies. If I can't understand the agreement, I don't sign and I do not accept the credit card the major financial institution is so eager to give me. In recent memory, I told the friendly folks at Discover that I wasn't interested. The conversation was almost humorous, with the customer care representative insisting "That really means..." and my continued response, "Then why doesn't it say that?"

About the third iteration I was reassured not to worry about the fine print. It took me three tries to cancel the card, coupled with a serious threat to call the authorities.

Anyway, people have a choice. If you really want to irritate the credit card company, just pay your balance off each month, which is what I do. This method seems to work well for me, but maybe that's just me.

Matt Oldham said...

HIDDEN FEES are also another form of unfair practice that the CONSUMER DOES NOT KNOW ABOUT!

Video (30 sec)
http://www.youtube.com/watch?v=6CehJarAIP8

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