I recently had occasion to help a 78-year-old friend attempt to straighten out a problem with one of her credit cards. She lives on a modest, fixed income and has been a responsible borrower all of her life, proud of her credit reputation and careful to pay her bills on time, though declining health has taken its toll on her now-fragile faculties.
Ms. M, as I will call her, had two credit card balances that she transferred, based on a direct-mail offer, to consolidate debts to a 3.99 percent rate in order to reduce her overall payment to a more manageable $89 per month. But the card carried considerable small print, as is common these days, and her first payment, though mailed prior to the due date, was declared “late.” Her new account incurred a $39 late fee and a $39 over-limit fee and was escalated to a 30 percent interest rate. The following month she attempted to call the credit card company to “straighten out” their error and sent in a payment she thought was correct while waiting for them to “investigate.” When the third month’s statement came, it reflected a payment amount of $328 due, with an increasing principle balance.
Like many of us, Ms. M has great difficulty in navigating the niceties of these nearly incomprehensible agreements that seem more designed to befuddle and confuse than to map the boundaries of a debt agreement. They seem, really, to be written to trip up the unwary for the express purpose of squeezing a few more dollars out of the hapless consumer. As a matter of fact, the U.S. Senate is considering legislation to end such practices as changing payment-due dates without notice, charging interest on debt fully paid on time, charging consumers a fee to pay bills, doubling or tripling interest rates to penalize late payments, imposing repeated over-the-limit fees for a single over-the-limit purchase, and applying consumers’ payments first to the parts of their accounts that carry the lowest interest rate. The legislation is called the Stop Unfair Practices in Credit Cards Act.
This raises a question: Are these international banking corporations so in need of additional revenue they are willing to engage in this kind of funny business? When did America turn down the path of common trickery in order to add to a corporate bottom line? I think of America as a place where a person’s word and handshake result in an ironclad bargain founded on principles of a square deal. Such an agreement is an honorable meeting of the minds. That’s not to say we don’t need to memorialize agreements in writing to avoid misunderstandings, but that is a far cry from agreements founded on downright artifice, deceit, and flummery.
In my business experience, it was considered dishonorable to try to dupe someone out of a few bucks, or a lot of bucks for that matter. No self-respecting, ethical, or God-fearing person would engage in such indignities against a fellow human being. Oh, I know, it seems we are surrounded by thieves every day who are working to unethically or unlawfully take our money or property, but when did it become acceptable for banks, national corporations, government agencies, and even churches to engage in this sort of conduct? Unfortunately, these practices are now widespread and generally accepted in America as the normal course of doing business.
The real tragedy here is that Ms. M is now considered a bad credit risk even though, like most Americans, she is a conscientious individual, always paying her debts, not expecting a handout or shirking her responsibilities. She had good credit. As a result of these difficulties, she is distressed, upset, and suffering daily over her own failure to maintain her sense of personal dignity.
Because of the corporate willingness to treat people this way, folks like Ms. M are being turned from reliable, bill-paying consumers to delinquent debtors, with damaged and poor credit reputations. Lenders and banks should consider the human and personal costs to our citizens resulting from such lending practices and reassess the ethical and moral boundaries for such agreements – before Congress does it for them.
Surely, lenders must understand that conduct such as this is both shameful and disrespectful of America’s founding values and principles. Ms. M’s personal honor, in her own eyes, has been besmirched and her financial reputation damaged for the sake of a corporate “bottom line” or managerial bonus, and it is a national disgrace.
Freelance writer Jack Cole lives and wrestles with small print in Fort Worth.