Dear Consumer Ed:
My bank and credit cards are charging me all kinds of fees that I think are too high and unfair to consumers. Is there an agency that can get the interest rate lowered on my credit cards or help get rid of all those fees?
Consumer Ed says:
Credit card issuers have wide latitude in what they can charge for interest, but they must inform the customer of the interest rate. Therefore, it is important to “read the fine print” in both the original credit card agreement and in any supplemental notices. The Federal Credit CARD Act of 2009 only allows interest rate increases on existing balances under certain conditions, such as when a promotional rate ends, there is a variable rate, or if the cardholder makes a late payment. Interest rates on new transactions can increase only after the first year. You also must be given 45 days’ advance written notice of significant changes to your account, such as an interest rate hike. Once notified, you may choose to decline the rate increase, close your account, and pay off the balance at the old interest rate. Late fees cannot be more than $25 for occasional late payments, although the fees can be higher if you are late more than once in a six month period. Customers must now “opt-in” to over-the-limit fees, and those fees cannot be higher than the amount by which you exceeded your credit limit, i.e. if you go over by $15, the fee cannot be more than $15.
If you believe your credit card issuer has violated the law, you should contact the agency that regulates that bank or institution. The Federal Financial Institutions Examination Council’s Consumer Help Center website can help you identify the correct regulatory agency. Go to www.ffiec.gov/consumercenter and enter the name of your bank. You might want to keep these regulatory agency numbers for reference:
- Office of the Comptroller of the Currency: 800-613-6743
- Federal Reserve Board: 888-851-1920
- Federal Deposit Insurance Corporation: 877-275-3342
If your complaint or inquiry is in reference to a credit union, contact the National Credit Union Administration at http://mycreditunion.gov
If you need help managing credit card debt, fees and high interest rates, you may want to contact a credit counseling service or debt management company. They can provide practical and legal financial advice regarding the use of credit. They can also attempt to renegotiate the terms of your credit agreements and arrange to pay off your debts. But be careful when choosing a debt management company, as not all of them are legitimate. Some may charge excessive fees, misrepresent what they will be able to accomplish, or not pay your creditors in a timely manner, which can end up making your debt problems even worse. The National Foundation for Credit Counseling can help you locate a reputable credit counseling service in your area. You can contact them at 800-388-2227 or www.nfcc.org.
Also, under Georgia's Debt Adjustment Act, a debt adjuster may not charge you a fee of more than 7.5% of the amount you pay monthly for distribution to your creditors. In addition, all funds received from a debtor, minus authorized fees, must be disbursed to creditors within 30 days. If a debt adjustment company violates these provisions, contact the Governor's Office of Consumer Protection at www.consumer.ga.gov.
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