We’ve been ticked off at credit card companies for a long time, haven’t we? The high interest rates, the late-payment fees, and the propensity to jack up the rates at the drop of a hat. Congress finally called the credit card companies to the carpet and forced them to reign in some of their practices—although critics have always maintained there will be other ways found to make up for any lost revenue.
And that’s just for us—the schmucks who use credit cards. What about the merchants?
Well, according to a proposed class action lawsuit filed Monday in Canada, merchants aren’t happy with the status quo, either…
Mary Watson is a retailer who operates a furniture store in British Columbia. She has since 1990. And like most merchants who sell big-ticket items, she can understand that most people would rather use plastic to buy that pricey leather sofa, than pull out a wad of hundred-dollar bills.
No, she’s okay with that. What Mary is upset about are all the fees charged to her business when a consumer uses plastic. The fees are hard to track. What’s more, she’s not allowed to promote, or suggest that her customers use an alternative form of payment, such as cash or debit.
She’s not exactly required to suggest her customers use their credit cards. But at the same time, Read the rest of this entry »
aka, How the Financial Grinches Stole Christmas…
Christmas is just around the corner. How do I know? Because one of my oh-so-thoughtful Facebook friends has already started the Christmas countdown. And, like so many people out there, my concern is with affording Christmas, especially given all the traps and fees associated with bank accounts, credit cards, prepaid debit cards and payday loans. So, to help sort things out, Pleading Ignorance is looking at the top four fees that are likely to have an impact on you this holiday season.
Why are we so concerned about fees? Well, people have complained to us over and over again that they had no idea these various fees could be charged (they’re called “hidden fees” because you’re not necessarily aware of them—like it’s some sort of game). So, while you’re out buying that super-duper, fancy-schmancy toy-thing that your child has always wanted and just can’t live without, you may find that in addition to the $50 price on the toy, you may be paying some very steep fees. That’s how the financial grinches can steal your Christmas. Here’s what they’ve got in their bag of tricks this season, and what you need to look out for…
I’ve already discussed this, but it bears repeating. Yes, some of the banks have agreed to change their overdraft fee policies. Yes, lawmakers are looking to rein banks in (although when we look at all the good it’s doing with credit cards, we have to wonder if it’s worth the effort).
The banks are being accused of automatically enrolling customers in overdraft protection, not telling them about that protection and then charging a fee for that protection (cue ominous laugh here). Even more terrible, they’re accused of reordering transactions to get the highest number of overdraft fees; processing debits before credits so that customers are forced into Read the rest of this entry »
With Christmas around the corner (at least according to big box retailers and your local Hallmark store) the time to think about how to pay for Christmas presents is upon us. Of course, the new credit card regulations go into effect next year, which means that banks are doing everything they can to maximize profits today. This week, Pleading Ignorance looks at some of the ways the banks are maximizing their profits—so you have all the information before you decide to pay for Christmas with plastic…
The Credit CARD (Card Accountability, Responsibility and Disclosure—picture the brainstorm on that one: “ok, got the “C”, “A”, “R”—what about the “D”, anyone?”) Act goes into effect in February 2010. The reason for the Act is simple—make credit card issuers more accountable for their actions and prevent them from taking advantage of consumers. That means limits on increasing interest rates, limits on offering cards to people under the age of 21, longer wait times before late payment interest rate hikes and no more automatic overlimit allowances on the card. Sounds pretty straightforward, right?
Wrong! Because the Act doesn’t go into effect until February, some of the banks are—surprise, surprise—doing everything they can to maximize their profits now, so that later, when the Act is in full force, they don’t feel like they’re losing out on money.
So, what does this potentially mean for you? Here, 5 possible pitfalls to be on the lookout for this holiday season…
The Credit CARD Act restricts how much credit card issuers can raise interest rates. Good news Read the rest of this entry »
How’re your holiday shopping plans looking? If you’re one of the millions who are either unemployed or thinking that you might be on a bit of job security thin ice (hello, J&J with 8,000 job cuts pending), you may be thinking of whipping out some plastic this holiday season just to ensure that jolly old elf—St. Nick—shows up.
So make your shopping list (and check it twice)—because that’s what your credit card issuers appear to be doing…just in time for the holidays. Yes, the banks who issue credit cards have a little list, too. They know what presents they want to find under their trees: higher interest rates, higher fees on late payments and special transactions, reduced credit limits…and the banks need to find these presents under the tree THIS YEAR because next year, it will be too late. Merry, merry!
See, next year—February, 2010 to be specific—is when the next wave of the Credit CARD Act goes into effect. That’s when credit cards will have to play by some new rules including:
Limits on Interest Rate Hikes: Interest rate increases on existing balances would only be allowed under certain conditions, such as when a promotional rate ends, there is a variable rate, or if the cardholder makes a late payment. Interest rates on new transactions can increase only after the first year. Significant changes in terms on accounts cannot occur without 45 days’ advance notice of the change.
No more Universal Default: “Universal default,” when interest rates are raised based on customers’ payment records with other unrelated credit issuers (such as utility companies), would end.
More Time to Pay Monthly Bills: Credit care issuers will have to give card account holders “a Read the rest of this entry »
Wynn Gambling with Employees Health? After all the noise about second hand smoke being a known risk factor for cancer, you would think the last thing an employer would want to do is wilfully expose its employees to the carcinogen. At the very least, why risk the lawsuit, right?
Wrong. The employees at Wynn Las Vegas Hotel and Casino filed a class action lawsuit this week, alleging that Wynn failed to provide a safe work environment for its employees and failed to protect them from the effects of second-hand smoke.
According to the suit, the risks are exacerbated for employees because not only is smoking permitted 24 hours a day, 7 days a week, but it is also encouraged. In some cases the casino gives cigarettes away to gamblers on the casino floor. What? That’s bad judgement no matter how you look at it.
The suit further claims employees that complain about the smoke risk losing their jobs. So, let’s see, you have to choose between risking your health or your livelihood. Or sue. Well—I’d choose the last option as well.
New Math on Big Bank Fees: Big Banks = Big Fees = Big Lawsuits = Big Settlements. At Read the rest of this entry »