The Pew Charitable Trust issued a report on credit card lending practices and the results are damning to say the least. You’d think that with the way this administration has acted, deceptive and predatory lending practices would be a thing of the past. Think again:
PCT: One hundred per cent of credit cards offered online by the leading bank card issuers continue to include practices that will be outlawed once legislation passed in May takes effect next year, according to a new report by the Pew Health Group’s Safe Credit Cards Project. The report also found that advertised credit card interest rates rose an average of 20 per cent in the first two quarters of 2009, even as banks’ cost of lending declined.
Talk about system shock. Pew’s claims of 100% are huge and not to be taken lightly. But the kicker is that the percentage of banks increasing lending rates has actually increased over time, rather than decrease. Key findings include:
- 99.7 per cent of bank cards allowed issuers to increase interest rates on outstanding balances – a jump from 93 per cent in December;
- 95 per cent of bank cards permitted issuers to apply payments in a way the Federal Reserve found likely to cause substantial financial injury to consumers; and
- 90 per cent of bank cards had penalty rate hikes with the vast majority imposed by “hair triggers” of one or two late payments in a year.
Banks are clearly scared about increasing deliquincies but this is downright absurd.