Consumer Action Surveys Universal Default Practices
San Francisco Consumer Action has released the results of its 2005 Credit Card Survey (PDF) focusing on the use of universal default by card issuers to increase interest rates on revolving balances based upon changes in their credit profile as reported monthly to the issuers by credit bureaus.
This practice “tops the list of unfair practices,” said Sherry, because customers are given little choice about the rate or fee hikes. In 2004, CA found penalty interest rates as high as 29.99% and this year has seen one bank charging a penalty rate of 35%.
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