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.