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Credit Card Applications » News » Other » Research Study Shows Card Companies Ripping Off Small Businesses and Consumers

Research Study Shows Card Companies Ripping Off Small Businesses and Consumers

January 11, 2010
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Consumers for Competitive Choice (C4CC) a US organization composed of concerned consumers and small business owners that promote the concept of a consumer-centric economy, embarked on a nationwide study named "The Credit Card Con", that looked into the practices and business habits of credit card companies.

Credit card companies have recently been under fire for raising interest rates and introducing new fees to card holders in anticipation of the passage of a legislation that will restrict them from dictating card fees.

This study took exception to two known giants in the credit card industry, Visa and Mastercard who according to the results of the research study used their financial clout to impose rate hikes at will, while holding down credit. With the economy contracting, a lot of major industries including manufacturing, media, retail, and automobile businesses suffered substantial losses and were left no choice, but to implement painful measures like job cuts and price downgrades just to mitigate the losses and to stay afloat.

Amidst all the gloom and doom, the two credit card behemoths, Visa and Mastercard, continued to report gains and robust profits which were largely due to the imposition of interest rate increases and introduction of new fees. This is on top of the already astronomical transaction fees that netted credit card companies almost $50 billion in 2008.

When Congress decided that the proposed Credit Card Accountability, Responsibility and Disclosure Act of 2009 be enforced in 2010, it did so with the intent that credit card companies would be given ample time to adjust to new regulations and guidelines. However, credit card companies saw it the other way around and exploited their privilege of imposing rate changes to the hilt while there is still time, making hay while the sun is up so to speak. They started charging unsuspecting card holders higher interest rates and adding new fees, not even sparing people who have maintained good credit all throughout.

Bob Johnson, President of C4CC, want credit card companies to stop milking dry the already battered consuming public.

The report calls for the government to take more aggressive action towards abusive and deceptive business practices and to pass laws that would regulate the imposition of transaction fees. The economy is still suffering from this slump and unemployment numbers are at an all time high. Any additional burden to consumers and businesses would further plunge them into financial distress and so legislators need to exhaust all legal means to put a stop to the underhanded techniques of unscrupulous credit card businesses.

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  • Larry
    With the Virgin / Barclaycard signature offer, there seems to be some consumer deception or maybe even outright fraud goin on.   I decided to jump on this offer..  read all the info on it..  was approved for their platinum card, paid the fee, then was only awarded 10,000 points instead of the advertised 20,000.   When i inquired about the less than advertised bonus points, Barclaycard claims only Signiture Visa cardmembers get the 20,000..  as a platinum cardholder, you don't qualify for that level of bonus, so you get 10k instead.   Well, in their current ongoing promotions, it states plain as day that....    Applicants approved for the Visa Signature or Platinum Card with $49 annual fee will receive 20,000 Bonus Points awarded to your Virgin America Rewards Account at the close of the first billing statement in which you make your first purchase or balance transfer (that is not returned or rescinded) and have paid the Annual Fee on the account (and such fee is not rescinded). They don't mention anything about a separate program for platinum cardholders..  However, trying to get someone to resolve this issue with either Virgin or Barclaycard seems to be rather impossible.. Seems to me they're simply drawing people in with the fraudulent offer, then simply saying, oh, we're sorry you don't qualify..  but thanks for signing up for our garbage credit card with insane fees..   
  • CreditLandCom
    Thank you for sharing your experience with us. We have reviewed this offer and you are correct, nowhere it is mentioned that 20,000 Bonus can become a 10,000 Bonus all of a sudden... We will mention this in our review of this card so others can make an informed decision. Another way to get Virgin miles is to get an American Express charge card: The Business Gold Rewards Card® now offers 50,000 Miles, though you do have to spend $5,000 in the first three months of card membership to get it. It also has $0 introductory annual fee for the first year, then $175. http://www.credit-land.com/details/the-business-gold-rewards-card-from-american-express-open.php Premier Rewards Gold Card now offers 25,000 Miles, though you do have to spend $2,000 during your first three months of Card membership. It also has annual fee of $0 for the first year, then $175. http://www.credit-land.com/details/american-express-premier-rewards-gold-card.php While we do not know If any of these offers make sense to you, we are at least sure that you will get advertised bonus in full if you decide to get them... Conversion rates for Virgin America are: 100 Elevate Points = 200 Membership Rewards® Points All the best.
  • Deborah Ellsworth
     would very much like to start a new credit history  by making payments on time I would tohave a credit card that is NOT PREPAYID! I don't need a card with a high limit just something to start a new credit history. Thank You Deborah Ellsworth
  • Deborah Ellsworth
    I would very much like to start a new credit line to get back on track. I DO NOT WANT A PREPAID CARD!! This new credit card if I am approved does not have to hace a high limit just something for me to start over again and prove myself ThankYou. D Ellsworth
  • Miss Edna
    there is a huge problem with the RFIP chip: it is easily compromised. There are already 'readers' in the form of what looks like a cellphone in a case, that scans all the info in the chip by merely walking near a person -- this 'reader' penetrates leather, cloth, spandex, etc. The only thing it will NOT penetrate is METAL. Perhaps one has seen commercials touting metal credit card cases. Here is my hint for a free fix: cut a piece of aluminum foil or use the foil that is used to keep foods fresh, like coffee. Cut it so that when folded once, it forms a sleeve for your credit card. place the credit card in the sleeve, then place the sleeve in your wallet.
  • Robin Parks
    I am looking to apply for the AARP Visa signature card from Chase that offers $100 after spend $500 in first 3 months, no annual fee and 0% interest first year; I don't want to mail in offer because of having to write in Social security #. Can you direct me to the proper on-line site?
  • CreditLandCom
    The Chase bank cards are not currently available at Credit-Land.com, but you can consider applying for the Citi® Dividend Platinum Select® Visa® Card - $100 Cash Back. The cards has similar terms and cash back program.
  • Becky
    This is Becky Now what do I do just waqit for acard to come to me?
  • CreditLandCom
    Once you have applied, you should receive a letter within 10 business days letting you know if you were approved and when your card will arrive. If you did not receive any letter or notification from the issuer, you should contact them directly. Also, you should contact the issuer if you’ve been waiting for your credit card longer than 30 days. Since we are not a bank and don’t issue credit cards, we cannot give you any information about your application or credit card.
  • SavingStar
    Thank you for posting about SavingStar. Just to clarify one sentence in your article, we have over 5 million members (not 500). Thanks, Josh
  • CreditLandCom
    Sorry for the misprint. We’ve corrected the sentence. Thank you for noticing that.
  • Eric
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