Posted on Tuesday, 31st August 2010 by Timothy Bell
Credit card companies are tricking consumers with unsatisfactory solicitations, Senator Charles Schumer (D-NY) explained in a letter sent to the Federal Reserve on Wednesday. In his letter, he revealed that the number of professional and business credit cards sent to consumers skyrocketed in the first quarter because they don’t have to same protections as personal cards.
Are Credit Card Issuers Trying to Bypass the Law?
Despite the many changes that have occurred as a result of the Credit CARD Act, card issuers have apparently been determined to find ways to lure in customers while avoiding all of the rules they’re meant to abide by.
Since many of the guidelines listed in the act don’t apply to business credit cards, companies have opted to distribute new and exciting business and professional credit card offers to non-business consumers, rather than focusing on personal cards. This is something the senator is trying to stop before it gets started.
But it may already be too late.
According to his stats, there has already been a 256 percent jump in solicitations just in the first quarter as compared with the same period last year. This surge could mean issuers are not only trying to bypass consumer reforms, but financially vulnerable consumers are in danger of digging themselves further into debt if they accept these new offers.
Make Cautious Credit Choices
As we all have learned from the credit bubble burst and the Great Recession, taking on too much credit of any kind could be damaging to your financial and emotional well-being. So as warned by Sen. Schumer, if you’re receiving these business and professional credit card offers, it is up to you to proceed with caution.
Keep in mind that these cards are not protected by the Credit CARD Act, which is a big deal since so much work went into making sure companies followed rules when it comes to interest rates, penalty fees, limit adjustments and more. In other words, by accepting one of these cards, you’re giving the company the right to make up all the rules.
So before jumping in, it’s good to first ask are you’re ready for a credit card? If you feel that you are and the offer seems too enticing to pass up then be sure to read every word in the fine print to avoid becoming a victim of the abusive tactics issuers are known for.
Similar Posts:
- Surge in Credit Card Direct Mail Solicitations
- Offers for credit cards sent through snail mail increase in 4Q of last year
- Credit card delinquencies lowest since 1996
- The Importance of Building Business Credit
- Demand for credit cards increases
Tags: Credit Card, Schumer
Posted in Credit Cards News | No Comments »