“[I]f you need money to pay your medical bills or get your car fixed, get a loan from the Mafia. You’ll get a lower interest rate and better terms.”
Ouch. Okay, the Mafia comment is sarcasm. But it’s in the context of an article on absurdly high fees levied by banks on (usually subprime) credit card holders. We’ve seen high rates and high fees before, but this example, cited in Congressional testimony, has to take some sort of prize for the most bullshit-per-dollar that banks have gotten away with:
…a young Navy sailor who opened a credit card account with First Premier Bank on November 21, 2006. The credit card had a $250 credit limit and a 9.9 percent APR for purchases. The same day that the sailor opened the account, he was assessed two fees — a “Program Fee” of $95 and an “Account Set-Up Fee” of $29. The next day (November 22), he was assessed a participation fee of $6. Three days later (November 24), he was assessed an annual fee of $48. When this young sailor received his first month bill, which had a closing date of Nov. 24, 2006, he had already accrued a balance of $178, without making a single purchase.
Does some blame fall on the sailor’s shoulders for signing up for such a horrendous card in the first place? Sure. But should banks legally be permitted to get away with this crap? — MARK ASHLEY
Time To Abolish Debt Slavery [CBS / The Nation]