Editorial: Card Sharps Get Credit Where Credit's Not Due

Publication: Philadelphia Daily News

Author: Elmer Smith

05/12/2009 - My wife's favorite credit-card-abuse story is of the time she sent in two payments because we were going away.

She wrote two checks, marked June and July, and sent them off well in advance of the June due date.

When she opened the August bill, it included a huge late charge for July. When she called for an explanation, they told her that both checks had been applied to the June bill.

They couldn't apply the second check for the July bill, they claimed, because it came in three days earlier than the start of the July billing cycle.


No doubt this policy is spelled out in our contract. But the typeface is about the size of the letters they use to print the Lord's Prayer on a grain of rice. We may have missed it.

If we had missed it twice, they could have jacked our rate up to whatever they wanted. In fact, they could have raised it the first time.

Because credit-card issuers can do with alacrity what Jesse James had to do with a pistol. Jesse didn't have the law on his side.

The law allows credit-card issuers to rewrite agreements for any amount at any time, even for accounts that have always been paid by the due date.

Provisions like "universal default" allow issuers to raise your rate if you or your spouse are late paying a bill with another company. Some use a "double-cycle" billing protocol that allows them to charge additional interest on balances previously paid.

If you think these are handpicked horror stories, punch up the Pew Charitable Trusts' Safe Credit Card Project's standards report.


Read the full article Card Sharps Get Credit Where Credit's Not Due on the Philadelphia Daily News' Web site.

Pew is no longer active in this line of work, but for more information visit the Safe Credit Cards Project on PewHealth.org.

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