Credit card woes? Join the club

When rates jump or charges are piled on, you may not win, but you can register a complaint one of six ways.

By James Eli Schiffer, Star Tribune

Last update: April 25, 2009 - 9:47 PM

One small-business owner in Eagan saw the interest rate on his credit card jump from 7.99 percent to 28 percent with no warning. The owner of a fitness center in Mounds View glanced at her statement and noticed the rate went from 10 percent to 26 percent. A man in Sauk Rapids watched helplessly as the minimum payment of his credit card doubled and the company added a $10 monthly "convenience fee."

These kinds of practices, which Whistleblower readers told me about over the past few months, are the inspiration for reforms pending before Congress. Bills in the House and Senate would give beleaguered consumers more protections against wild interest rate hikes, unexpected fees, due-date gimmicks and other industry tactics.

Banks warn that the proposed changes will force them to restrict credit at a time when consumers and the economy need it most. Supporters of the reforms say it's time to level the playing field between credit card users and the banks.

Reforms are already set to kick in July 1, 2010, regardless of Congressional action, because the Federal Reserve has adopted new rules administratively. But many in Congress think that's not soon enough. They got some high-level support last week, after President Obama held a summit with the Barons of Plastic (credit card company CEOs) and declared that "The days of any-time, any-reason rate hikes and late-fee traps have to end."

Also last week, a bill creating a credit card holder "bill of rights" passed a House committee. Among the provisions: Retroactive interest rate hikes are only allowed if the cardholder is delinquent, a "pre-agreed" promotional rate expires or it's already a variable rate. Cardholders would have to get 45 days notice of any rate hike.

The bill would eliminate unfair penalties for those who pay on time. My favorite provision is the one that would prevent companies from knowingly giving credit cards to minors. My daughter, now 8, got a credit card offer shortly after she was born, and I can only imagine what she would do with a Visa card.

How to complain

The federal government has hot lines to hear your complaints, but where you do it depends on who issued your card. Go to the Federal Reserve site, www.federalreserve.gov/pubs/shop/complaints.htm, which has links to six agencies that divide the responsibility. Cardholders also can call the Fed at 888-851-1920, or the state attorney general's office at 651-296-3353 or 800-657-3787.

A tale of two auction houses

Last Sunday I described how the state Revenue Department had revoked the sales tax permit for Margaret Marie Palmer, whose business was the Minnesota Auction House of Foreston.

That was correct. But last week, I learned the Auction House of Foreston, which is in the same location, with the same phone number, is very much in business. Owner Sheila Geist told me she used to work with Palmer but no longer does, and that people shouldn't confuse the two businesses, despite their similar names.

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