Consumers League will hold its annual meeting on May 16 at 6 pm at the United Way building, 60 South Fullerton Avenue, Montclair, first floor, enter through the auditorium. All paid-up ($20) members are invited to attend and vote on election of officers and directors. On your newsletter label, we note the date of your last payment. If you plan to attend, please send us a $10 for the refreshments. Come see old friends, and make plans for CLNJ's year 102!
The FTC, New York Attorney
General, AARP and NCLC held a conference on predatory lending
in NYC on April 3. Our colleagues in New York recognize the problem.
The New York Department of Banking, unlike the "see no evil"
N.J. Banking dept., issued a regulation against predatory lending
practices, joining North Carolina, the District of Columbia and
Massachusetts in passing a law or regulation.
Both the U.S. House
and Senate have passed versions of a very bad bankruptcy bill,
opposed by all consumer groups, including CLNJ. The only N.J.
heros to vote against this travesty were Senator Corzine and
Rep. Donald Payne.
Since 1985, CLNJ has kept track of lower rate credit cards. These are early 2001 rates:
Metropolitan Nat'l Bank AR 800-883-251110.98%, $25 fee; Late charge $10
Pulaski B&T ARK800-980-2265
Simmons First Nat'l Bank AR
Washington Mutual CA/WA 800-533-5600
Liberty Savings Bank
People's Bank, (CT)
AARP/First USA Bank, DEL
American Express Blue 800-258-3600
Fidelity National GA
Security First Network Bank GA
The Public Interest Research Groups have issued a report, THE CREDIT CARD TRAP: How to Spot It, How to Avoid It, which is an important contribution to the credit debate. The report, and the pamphlet we describe below, are available at: www.truthaboutcredit.org. The 37 page report exposes manipulative credit marketing practices, the pitches to college students, and suggests legislative solutions for fair credit practices. Did you know credit card banks pay millions to colleges for the right to exploit their students?
New Jersey PIRG (609-394-8155) is distributing a hard-hitting new pamphlet A Road Map to Avoiding Credit Card Hazards. Did you know that 78% of college students use credit cards? With a average balance owing of $2,700?
The PIRG pamphlet tells you how to avoid "10 Credit Card Traps:"
1. More late fees: you pay $27.61 for paying late. Two thirds of banks eliminated grace days.
2. Higher over the limit fees: one dollar over will cost you $20 or more.
3. Hidden transaction fees: fees for cash advances in amounts such as 3% of the advance or $10, whichever is higher.
4. Punitive interest increases: if you miss payments, they raise the rates. For example Fleet cards can carry penalty interest of 24.9%!
5. Shorter grace periods:
now averaging 23 days only. (Have you noticed that it is impossible
to tell on what date they mailed you the bill? This shortens
the days to less than 20.)
6. Teaser introductory rates: the annual percentage rate (APR) increases sharply after 6 months.
7. Low minimum payments: pave the road to bankruptcy. If you pay the minimum, it could take as long as 14 years to payoff $2,000, even if you never used the card to charge more.
8. "Fixed" APR is fixed only until the bank wishes to change it. The Truth in Lending Act allows a change on 15 days notice.
9. Bait and switch: advertise good terms, for the rich, switch to worse terms when you get the card.
10. Tiered pricing: call a bank and they won't tell you what rate you'll get (range of 8% to 25%, for example). So how are consumers supposed to shop? CLNJ found this to be a particular problem when we call banks for our credit card survey. Some bank employees flatly refuse to quote rates. So don't patronize such banks.
This is only part of the pamphlet: Groups should call NJPIRG to get some of these pamphlets for distribution. Everybody is interested in credit.
If things are getting worse in credit cards, fight back, don't give up. We cannot vouch for all the banks on our low rate list, but some have been consistently low for years. Call them and ask about rates and fees. Read the disclosure which comes with the card. Send it back if the terms are bad!
I wish to become a member of the Consumers League of New Jersey, and/or the Consumers League Education Fund.
Annual dues of $20 include a subscription to the Consumers League Newsletter. Contributions to the Education Fund (only) are tax deductible. Thank you for your contribution.
________Consumers League Millennium Circle $2,000
________Consumers League Life Member, $1,000
________Consumers League Century Club, $100
________Consumers League of New Jersey, annual dues $20
________Consumers League Education Fund, $20
________Newsletter subscription only, $10 (not a member)
________Additional donation to help CLNJ: Enclosed is:
_____$1,000,_____$100, _____$50, _____$25, _____other.
CITY, STATE ZIP
we have a simple plea:
if you can, please send us $100 for our next 100 years!