Allow me to vent for a minute. I just got my credit card statement for the time I was in Africa. In South Africa I used my MBNA card to withdraw about $40 from an ATM. Added to that was a $10 “foreign transaction fee.” That’s 25% of the actual transaction amount! Plus, because they received my July payment 2 days late, I was slapped with a $39 late fee. In my naivety as a new American I thought I would get cut some slack on the 4th of July!
Okay, so today I heard a report on the radio about how consumer watchdog groups are noticing a spike in credit card interest rates and hidden discretionary fees. In response banks have said, “the fees are legal, fair, and appropriate because credit cards represent significant unsecured debt.” Well yeah, that’s because these people are idiots! Anyone can get a credit card. My two cats can get credit cards. Today we got a pre-approved credit card in the mail for “Tamara North” – odd, since my wife’s name is Holly. Every time a college kid buys a textbook they get a credit card application in the bag. That’s why the high interest rates are justifiable. I suppose 18-23 percent for unsecured debt is fair given the high risk. So what’s the rub? Didn’t our Republican congress just pass a massive bankruptcy reform bill, signed by president Bush, making it easier for lenders (including banks and credit card companies) to retrieve debt? So when the risk factor goes down, so should the interest rates, right? Oh no, up, up, and away they go! Again, the consumer gets hosed.
So next time some wild-eyed, conspiratorial, crazy leftist accuses Republicans of being in the pockets of banks and “big business,” don’t dismiss them immediately. Oh, and while you’re thinking about that – really thinking about it – as you put gas in your car, keep in mind that last fiscal year Exxon-Mobil, the world’s largest oil company, posted a record profit.