Credit ripoff: How a $100 purchase turns into a $1,000 debt
http://www.mcclatchydc.com/227/story/42463.html Ronda Churchill / MCT
Wendy Adams and her fiance, Richard James. | View larger image
By Tony Pugh | McClatchy Newspapers
WASHINGTON — Subprime credit cards might be the worst consumer credit product ever marketed.
Their high interest rates, costly penalties and high, hidden fees can eat up nearly all the credit available from the cards and, over time, turn a $100 purchase into more than a thousand dollars of debt.
Wendy Adams, of Las Vegas, is living that nightmare.
A former Navy hospital corpsman with disabilities, Adams received a popular subprime card — the Aspen MasterCard — in June 2006. She was approved for a $350 credit limit, but when the card arrived, Adams said, she'd already been billed for $285 in processing fees, leaving her only about $65 in available credit.
Adams said she promptly called and canceled the card.
"I never used it. I never bought anything," she said.
She assumed that the cancellation would rid her of the fees she'd been charged, but they remained on the account. When they weren't paid, that led to more charges, for late payment and exceeding the card's credit limit.
The money myth exploded.
There is never enough money issued to repay the interest credit.
http://www.michaeljournal.org/myth.htm
caveat emptor
While Congrees might make this sort of business illegal, you've got to read the cardmember agreement - every word. If you're not willing or able to do that with understanding, don't accept the card.
absolutely right
While it's true that this is a ripoff, it's also true that she is assumed to have known about it because it's right there in the terms of the agreement. If she had read that ahead of time, she would not have found herself in this mess. I commiserate and do not believe that she should have to pay this charge, and if it were me I would fight it to the bitter end. But if it were me, I would have made sure I knew about every charge beforehand.
www.paulforronpaul.com
same family lines?
Hi freeman! We might be related!
thefreeman