Originally published February 27 2005
Credit cards raise rates for smallest credit mistakes, says writer
by Mike Adams, the Health Ranger, NaturalNews Editor
People who transfer balances to cards that advertise low, fixed rates are often in for a surprise when the rate suddenly jumps up. Though the credit card company claims that the rate is fixed, being so much as one day late on a payment can send the interest rate up to double or triple what the card holder signed up for.
I recommended that the woman with the student loan debt not do it because those low-interest-rate cards come with too many loopholes that allow a credit card company to raise the rate if you even sneeze wrong.
"You give folks far too little 'credit' for being able to monitor their situation," the reader scolded me.
You can do everything right and still have your credit card rate increased.
In fact, Minnesota Attorney General Mike Hatch is going after one giant credit card company for what he says is a deliberate attempt to mislead people into signing up for what they think are credit cards with permanently fixed rates.
In a lawsuit filed recently against two subsidiaries of Capital One Financial Corp., Hatch alleges that the company uses false, deceptive and misleading television advertisements, direct-mail solicitations and customer-service telephone scripts to market credit cards with allegedly "low" and "fixed" interest rates that, they say, unlike those of its competitors, would never be increased.
I do believe that much of the advertising for credit cards doesn't emphasize enough that special low rates can be taken away for any number of infractions -- including making a single payment late (even by one day) or exceeding your credit limit.
However, what many consumers don't understand is that the word "fixed" in the credit card world isn't the same way it's used, for example, to describe a 30-year "fixed" mortgage loan.
Hatch's suit alleges that consumers are not adequately informed of what can happen with a low-interest-rate card and cites case histories from several Minnesota cardholders.
All content posted on this site is commentary or opinion and is protected under Free Speech. Truth Publishing LLC takes sole responsibility for all content. Truth Publishing sells no hard products and earns no money from the recommendation of products. NaturalNews.com is presented for educational and commentary purposes only and should not be construed as professional advice from any licensed practitioner. Truth Publishing assumes no responsibility for the use or misuse of this material. For the full terms of usage of this material, visit www.NaturalNews.com/terms.shtml