There’s a story floating around, and it’s a true one, that credit card companies are racing to raise interest rates before a new law designed to protect us from that very thing goes into effect February 22nd. You can read more about it here, for more ugly details.

Congress had actually been moving quickly themselves to form probably insipid meaningful legislation around the Credit Card Accountability, Responsibility and Disclosure Act, or CARD Act. But, and I have to add the word oddly, and should also add disappointingly, let’s also consider outrageously, allowed themselves to be lobbied by the credit card companies and approve a “grace period” that would enable the credit card companies to “prepare” for the change in predatory practices.

So, they’re using that grace period to gouge credit card users as hard, deep and quickly as they can.

Thank you, our ever vigilant, inspiring representatives.

The same representatives, mind you, that are voting in a healthcare package that they, themselves, are not required to participate in. Read about that in my post: healthcare is not for You.

The Act actually offers some fairly meaningful protection for credit card users. You can or should research those details elsewhere; it’s worth the time and effort. A meaningful issue at hand, however, is this grace period is going to create a lot of harm and financial chaos in the interim. It’s also going to cause, in many cases the very thing the Act was meant to forestall, if not eliminate.

I’m skeptical Congress could not have seen this coming. And, so, I feel set-up by them again.

We don’t use credit cards much in our household, or in my businesses. We prefer American Express (I certainly have issues with American Express), but when we need to use a credit card we prefer to pay it off. Apparently most Americans can’t or aren’t doing that, for the moment.

Nonetheless, I have a letter from Citibank informing me that they are doubling the interest rate on cards.

Right there in my hands I had written proof that the credit card companies; certainly Citibank, were attempting to extort the American people – and, Congress are their unwitting accomplice. /1

Where’s Aaron Burr when we really need him?

This is all a lot more insidious than the media are letting on, Congress will own up to, and, what most people might understand.

The letter I received from Citibank said, in effect, that I had an option to decline the higher interest rate. But, if I do so, they will cancel the credit card. For me, that’s not an issue. But, apparently for 63% of Americans, it just might be. If the credit card companies cancel the credit card, you are still, obviously, responsible for paying down the balance. Maybe that, unto itself, is not such a big deal, but the fact that your credit score will drop precipitously, is. Your credit score is driven by many factors (I suspect many of them subjective). But, an obvious factor is amount of credit card balance against available credit (your credit limit on the card). If you’ve maxed out your card, but are paying, at least the minimum required each month, your credit score will likely stay intact. But, if you have a credit ratio where your balances outweigh the available or potential available credit, your score drops up to 99 points in only one reporting cycle. NOTE: It comes down to algorithms (more profiling) designed by the credit industry exist to punish users if they tried to cancel their own cards.

It’s true; and, you better get pissed! I don’t mean inebriated here, but, that might help some of you that continue to numb yourselves against being bent over your own “American dreams” as they collapse around you.

I wish I had good news today. Maybe a fun story. And, I am trying to come up with a solution – if not a course of action. I honestly don’t know if writing, calling or visiting your Congressman does any good. We could go to Oprah, I suppose. But, she won’t make any move that might shed unfavorable light on Barack Obama. I don’t know if she’s his bitch, or the other way around.

Maybe we should try something like a “Don’t use your credit card for a week” campaign. What do you think?

Peace be to my Brothers and Sisters.

Brian Patrick Cork

1/ From: West’s Law:

  1. The act or an instance of extorting.
  2. Illegal use of one’s official position or powers to obtain property, funds, or patronage.
  3. An excessive or exorbitant charge.
  4. Something extorted.

extortionary ex·tortion·ar’y (-shə-nĕr’ē) adj.
extortionist ex·tortion·ist or ex·tortion·er n.

or,

From the Columbia Dictionary:

“extortion, in law, unlawful demanding or receiving by an officer, in his official capacity, of any property or money not legally due to him. Examples include requesting and accepting fees in excess of those allowed to him by statute or arresting a person and, with corrupt motives, demanding money or property unlawfully under pretense of duty. The taking of money or property is generally an essential element of the crime. In most states of the United States, extortion is more widely defined to include the obtaining of money or property of another by inducing his consent through wrongful use of fear, force, or authority of office; blackmailransom, and threat of force are included under this definition.”

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