An Oregon Perspective: Cracking Down on Deceptive Credit Card Tactics

As a young man working for the Secretary of Defense in
Washington D.C., I applied for a MasterCard and was declined because I didn’t
have enough credit history.  So, I got an American Express card, paid off
my balance every month as required, waited a few years to build up credit,
applied again, and was approved.  The way our credit system used to work,
credit card companies took into account a variety of financial factors to lower
their risk and ensure that people weren’t approved for loans that they couldn’t
afford to pay back.

Now the credit card industry
seems to be aimed at taking advantage of working families.  Banks are
marketing cards on college campuses in an effort to hook our young people on
credit. Instead of helping keep people out of debt, they’ll approve almost
anyone for a card – even small children or the family dog.

Extra charges for late payments, ridiculous overdraft fees,
and fees for paying your bill by check or online are all tactics that credit
card companies use to strip wealth from Americans in bits and pieces.

One of the worst of these schemes is “universal default,”
through which credit card companies can alter your interest rates at any time,
for any reason.  If your credit score changes at all, which happens to all
of us for a variety of reason, they can hike up your interest rate to 29
percent or more, even if you are current on your credit card.  In a bait
and switch move, the companies offer a low introductory rate they can – and do
– change whenever they want.

To restore rights to American consumers and rein in these
irresponsible lending practices, I’ve co-sponsored the Credit Card
Accountability, Responsibility and Disclosure Act (Credit CARD Act).  This
bill will end these abusive practices, crackdown on marketing to young people,
and ensure that the terms of credit card agreements are fully disclosed instead
of hidden in fine print.

This week, the Credit CARD Act will be up for debate on the
Senate floor.  I’ll be working hard to generate support for this important
bill and restore fairness for American consumers. 

If you have a credit card story about outrageous fees or
deceptive practices, please consider sharing it.  You can share your story
by visiting my website at or calling my office in Portland
at (503) 326-3386 or Washington D.C. at (202) 224-3753.

I’m encouraged by President Obama’s strong statement of
support for credit card reform and it is my hope that there will be a bill on
his desk in the coming weeks.