Big Fees for Little Credit
SOME issuers of credit cards are “quietly collecting hundreds of millions of dollars in profits selling nearly worthless, predatory credit cards targeting vulnerable consumers, including those with bad credit,” according to a report published this week by the National Consumer Law Center (consumerlaw.com).
How “quietly” these companies are operating may be open to question. But the report states that some companies issue cards with the sole intent of collecting fees from gullible customers — not offering them credit.
A typical example the law center offered was this: a card issued with a credit limit of $250. After a $95 program fee, a $29 setup fee, a $6 monthly “participation” fee and a $48 annual fee, the consumer winds up with “an instant debt of $178 and buying power of only $72.”
. . . law center said CompuCredit’s financial statements revealed that the issuer “collected $400 million in fees from a portfolio of fee harvester cards that by mid-2007 had saddled cardholders with nearly $1 billion in debt.”. . .
The new rich are the poor, at least so far as scamming a buck is concerned.
That’s not new in itself. The poor have always bought and paid for the most expensive groceries, rents, cars, clothing–you name it–anything consumable. But the laws that lenders lately bought and paid the Congress to pass, include (and most importantly to this predator trend) revamping the bankruptcy laws to favor–you guessed it–the lenders.
Democrats have been complicit in this, as they have all aspects of the current administration’s assault on America. But if they’re smart, if they’re cagey enough to recognize it, they’ll ring the bell of alarm over the unfortunate victims of sub-prime and now fee-harvesting lenders.
Currently, their concern seems more closely allied to lender losses, as they run like hell to protect the perpetrators rather than the victims.
Of course, it’s the perps who pay the big lobbyists who, in turn, pay the big donations to the big names in the Democratic Party.
Which brings a whole new meaning to “it’s party-time.”