It seems like business as usual at the Banks and Credit Card companies, trying to squeeze as much money out of their customers as they can.  Even when the Federal Banking Officials say the practices are illegal but will not be enforced until 2010. The taxpayer bails out the banks, and then banks  use the money to take advantage of consumers through the banks credit card practices.  Practices that have been deemed illegal are now being using against their customers.  Here are some of the practices the banks and credit card companies are using on the U.S. consumer to strip him or her of any extra cash flow they might have. Remember the Feds have ruled these practices are illegal.

The newest rip-off is outrageous increases in interest rates on your credit cards for made up reasons.  Here is an example, many banks have sent out letters informing their credit card customers that their credit card interest rates will jump to 12, 16 or even 24 percent effective immediately.  This new interest rate will be charged on your old balance as well as any new charges. Why do the banks say they are doing this, because they have lowered your credit limit, and now you are over the limit, so to punish you they are raising your interest rates.  If you are not over your credit card limit, they just say they are doing it because they can and who is going to stop them

The Federal Banking Authorities, such as the Federal Reserve Board, have just approved new rules that make it illegal to do this type of banking fraud against customers.  But the Feds, like most politicians, gave the banks a way to gouge their customers for unearned money for about one and a half years before these rules goes into effect June 10, 2010.  If it will be illegal then, it is illegal and immoral now.

The banks have other credit card dirty tricks to rip you off.  One of them is called Two Cycle Billing.  Here is how it works, in one month you put nothing on your credit card, the next month you buy something on your card, the bank charges you interest for both months for the one item you bought, it is like double billing. They say you bought it in the two-cycle billing period so you must pay interest on it for both months even though did not buy it in the first month.

Another dirty trick is when the banks raise your interest rate if you are late on any other credit charge, like another credit card bill or a car payment. Also some banks raise your interest rates if they find out your credit has been checked for any reason, like when you are shopping for a mortgage.  It does not matter if you get the mortgage, they raise your rates just because you were looking.  This is another example of what they call Universal Default.

Here is an example that happen to me on a major department store credit card.  After the Northridge Earthquake the department store offered a three-percent earthquake low interest credit card rate if you charge earthquake home repair supplies on your credit card. We charged all our new carpet.  About one year later, they changed their policy and raised the interest rate on the amount to 24 percent.  Some other consumers filed a class action lawsuit and won. For the hundreds of dollars in higher interest I paid, all I got were three department store coupons for $10 each. Of course the attorneys got millions. The consumer never seems to come out even.

When the banking industry was putting in the first ATMs at banks in Los Angeles, I did a CBS-2 News story on the first ATM machines.  While I was at one of the banks, an official said we are going to make all the ATM machines free until we get our customers addicted to them and then we will start charging fees. He continued we are going to make a lot of money on these machines.  I think it is extremely clear that if most banks can rip you off for another dollar they will. (And they will probably charge you a late fee for that dollar too!)

Remember the money changers who had tables (their ATMs) in the Temple when Jesus arrived. Jesus turn-over the tables saying this was not the place for money-changers making profits. I wonder what Jesus would say about the banking industry policies today?

Filed 12-22-08