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Author: blackmare Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308338  
Subject: Re: Credit Card Consumers Bill of Rights Date: 6/13/2000 12:18 PM
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I'm enjoying this thread and the debate.

I agree that "fixed rates" should be fixed but only for a specified time period (and I don't think anyone here meant to say this should apply to "introductory offers" which are exactly that). It's unreasonable to expect card companies to keep a rate down indefinitely when interest rates are rising and their OWN loan has a fixed repayment schedule. It's also unfair to promise a fixed rate and then decide to raise it a month or two later. One may argue that consumers can then vote with their feet, and get another card, and I agree, but if they must do so too often I understand it will damage their credit rating.

I also agree that notice of any changes should be sent in a well-marked envelope. I am not stupid; I read my mail. But I once had a Household Visa and, if they ever notified me of their intent to raise my rate to 24%, they must have buried it in with the reams of ads for insurance, magazines, clock radios etc. that they sent me every week. I never saw it. I had a responsible roomie whose card company lowered her limit so that they could charge overlimit fees, and if she received any notice of this important, and expensive, change, it was done in the same manner. I agree that the world has already been dumbed-down enough; I know that the coffee is hot. However, I don't think that consumers should be required to read through pages of subscription pitches, sweepstakes rules, and other advertising material in the hopes of catching whatever tiny notice might or might not be hidden in the junk.

Having said that, please note that I now have a Visa with Fidelity National Bank, and they don't do this sort of thing. Neither did my previous company, before Household bought them out. I don't think most lenders abuse their customers, or are evil. Most of the time, consumers dig their own hole. But I would like to see a few more safeguards against really unfair, misleading and predatory practices.

One thing that I believe ought to be illegal, is the sending out of "live checks." These are an instant loan: just sign, deposit or cash it, and your account is opened. I got one in the mail just before last Christmas. Amount: $3000. Interest: 24.99%. The materials they sent with it, were very obviously aimed at seducing low-income, uneducated people who wanted some extra holiday money and would not understand what they were actually getting into. I know that everyone is responsible for the choices they make, but some practices are just plain wrong and I believe this is one of them.

As for college campus solicitation, I dislike it but think legislation is not really a good answer. Education (perhaps offering free, voluntary "financial orientation" sessions?) is a better response. It would help solve the root problem of financial ignorance.

That's all for now. I'll be following this with interest.

Tracie

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