It is time to watch out for those bank and credit card notices that come in the mail. You know, the ones with the ultra-fine print... Millions of cardholders have recently received letters from the likes of Citibank, Bank of America Corp., Wells Fargo & Co. and American Express Co. notifying them that their interest rates are going up, in some cases to 30% if a single payment is missed.
In some cases they are even offering a fee to maintain a low interest rate, as well as other questionable tactics. Read the article HERE.
MisterWriter
[NOTE: from our reader Dorothy who posted this in comments, but I thought it important enough to add to the post... "BTW, the next time your dentist or doctor sends you a bill that says amounts over 30 days will be charged 1 and 1/2 percent per month, you might let him/her know that those rates exceed the rates allowed under the California Usury Laws. You might also point out that the penalty for usury is a refund of 100% of any interest charged (and treble damages if the individual knowingly charges usurious interest)." Thank you Dorothy.
5 comments:
I had several cards, with zero balances. The banks started closing them for lack of use. I figured that those who carry balances were going to be hit with extra fees, or have their accounts closed too. Banks are suffering. Things are changing, whether we choose to believe it or not.
It's ironic that we have state usury laws that prohibit charging excessive interest rates but business is finding ways to get around these statutory rates.
Originally, banks with an "N.A." (national association) were exempt from the state usury laws and then all banks found a way to jump on board. They issued credit cards with exceptionally high interest rates. Then, the retailers wanted some of that action. So, the retailers partnered with banks so they could issue credit cards and charge rates in excess of the legal maximum.
Whether companies partner with banks or whether the banks and other companies charge high "fees" as opposed to interest rates, the average consumer is getting the raw end of the deal.
BTW, the next time your dentist or doctor sends you a bill that says amounts over 30 days will be charged 1 and 1/2 percent per month, you might let him/her know that those rates exceed the rates allowed under the California Usury Laws. YOu might also point out that the penalty for usury is a refund of 100% of any interest charged (and treble damages if the individual knowingly charges usurious interest).
Interesting that you point this out - about doctors and dentists. I didn't know that, and I've done billing for dentists.
Actually, the office I know of doesn't charge interest anyhow. But are you certain, about that? I will try to look it up, because I know other doctors who do charge interest, even 1 and 1/2 percent still seems quite nominal, all things considered.
Sorry for the delay in responding...I've been out of town since the 17th.
Yep - the usury law is probably one of the laws most frequently broken. Doctors, dentists, attorneys, etc. cannot charge in excess of the state maximum (but they do).
I testified as an Expert Witness on behalf of about 3000 franchisees several years ago. They got a $20 million settlement of excess (usurious) interest charges from their franchisor. The franchisor's solution was going to be to form a bank so the franchisor could go back to charging usurious interest rates (legally this time).
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