Consumer Action issues credit card fee data
SAN FRANCISCO - A recent survey released by Consumer Action, a consumer education and advocacy organization that monitors credit card companies, shows that credit card companies are steadily charging higher interest rates and more late fees. For the first time in years, all 109 credit cards issued by the 45 companies surveyed charged late fees. According to the report, banks' flat late fees averaged $26, up from $22.50 in 1999. Fleet Bank topped the list by spiking its late fee to $35. Credit card issuers are also quicker to increase rates if a consumer misses a payment. Almost 70% of surveyed issuers stated they would raise the interest rate on a card for late payment, which is an increase of nearly 50% from 1998. Penalty rates ranged from as low as 14.50% to a high of 29.99%. The higher penalty rates stay in effect until the credit card company judges the holder can make on-time payments. According to Linda Sherry, who authored the Consumer Action Report, the rising rates and fees highlight a trend among credit card companies to boost profits by targeting consumers with poor credit history who cannot transfer debt to cards with better terms. "This just means a lot more money coming out of families' pockets for fees and interest rate payments," said Sherry. Full results of the survey are posted on Consumer Action's Web site at www.consumer-action.org.