Debt Free

Watch your bank. Some are changing the terms of your account without any input from you. I was informed by my bank that they are going to begin charging me $5 per month for the privilege of banking with them unless my business begins to use direct deposit for my paycheck. My wife, who has an account at the same bank, but no monthly paycheck, got no such notice. So, let me get this straight, they analyzed our deposit history, realized I deposit a paycheck every month but my wife does not, and then slapped me with what's essentially a check deposit fee. Nice! Maybe I should begin charging them for the privilege of having my business. Time to switch all my banking to my credit union. If they only had thousands of cash machines nationwide, I would do just that.

The propensity of banks and other financial institutions to just begin charging fees willy nilly whenever the feel they can get away with it has got some in Congress a bit riled up. I guess someone in congress got one of those letters from their credit card company too. In one of its first orders of business in the new session, the Senate Banking Committee began examining the credit card industry and their business practices. Credit card providers have been changing to a more fee oriented business model. As such, they are looking to maximize fee revenue. The firms have started to be fairly aggressive about their fee structure and when said fees are imposed.

It was only a matter of time until they began to push things a bit too far and consumers started to get a bit upset. That time is now. If you have credit cards, you've no doubt noticed some of the tactics credit card companies are using in an attempt to extract the maximum amount of cash from card holders. The committee chairman, Senator Christopher Dodd, D-Connecticut issued the following statement, aimed squarely at the credit card companies: "If you currently engage in any business practice that you would be ashamed to discuss before this committee, I would strongly encourage you to cease and desist that practice."

Strong words, but will the Senate actually back them up? Only time will tell.In an effort to get to the bottom of the situation Senators questioned execs from Chase Bank USA, Barclays Bank and Capital One Financial Corp. Cap1, in particular, has a reputation for pursuing some pretty aggressive tactics to maximize revenue, while targeting sub-prime credit card holders. Maybe those tactics, which include offering borrowers multiple low limit cards, instead of a single card with a higher limit, have finally reached the point where they're about to be reigned in by a higher power; the Senate Banking Committee.

Another tactic the committee found that is being used by several credit card providers can only be described as unscrupulous. Actually, several other descriptions spring to mind, but hey, this is a family blog. The committee found that the companies have been charging card holders interest on debt they've already paid! Nice, huh. Imagine if that happened when you went for lunch. “Sir, that burger will be $1.98.” “But I already paid for it” “Too bad, pay again, or we'll charge you for the fries too” As the problem gets worse, consumers just go deeper down the debt well. Don't let it happen to you.