Pew Weighs In on Credit Card Debate
by Steve Cypher on Wednesday, April 29th, 2009Pew Safe Credit Cards Project urges the house to pass the credit cardholders bill of rights.
What is Pew?
Here at Auto Credit Express, we realize that unless you listen to public radio or public t.v., you’ve probably never heard of the Pew Charitable Trusts. Even if you have, you might not know what it is.
Founded in 1948, the Pew Charitable Trusts is the sole beneficiary of charitable funds that were established between the years 1948 and 1979 by two sons and two daughters of Joseph N. Pew, founder of the Sun Oil Company. Based in Philadelphia and with offices in Washington, D.C., its current mission is to serve the public interest by “improving public policy, informing the public and stimulating civic life.”
Pew Safe Credit Cards Project
Currently, the trust has established a Safe Credit Cards Project to study the practices of credit card companies in the United States and the effects of their practices on the American consumer as well as to support legislation that would eliminate many of their unfair practices.
In a recent press release, here is what Nick Bourke, manager of the Safe Credit Cards Project at the Pew, had to say about pending legislation:
“In this economic climate, allowing credit card issuers to continue to engage in unfair and deceptive practices is like letting a car company continue to sell cars we know have faulty brakes. Congress needs to act now to give consumers protection under the law from business practices that the Federal Reserve and our independent research have shown are widespread. We strongly urge members to vote tomorrow for the Credit Cardholders’ Bill of Rights to protect consumers and make it clear that this Congress demands safe and fair lending practices.”
The release also contained this statement:
The Pew Safe Credit Cards Project recently evaluated general purpose credit cards offered online by the largest 12 issuers, which control more than 88 percent of all outstanding credit card debt in America. Based on its research, Pew developed a set of Safe Credit Card Standards and is recommending immediate legislative action from Congress.
Select findings from the research include:
• 100 percent of cards contained features that the Federal Reserve has determined cause substantial harm to consumers.
• 93 percent of cards allowed the issuer to raise any interest rate at any time by changing the account agreement.
• 87 percent of cards allowed the issuer to impose automatic penalty interest rate increases on all balances, even if the account is not 30 days or more past due. The median allowable penalty interest rate was 27.99 percent per year.
The Bottom Line
Here at Auto Credit Express, we support any organization that, in these economic times, supports congressional action designed to protect the rights of consumers. For more information, the project’s report is available at: www.pewtrusts.org/creditcards.
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