Today Show Joins Liberal Levin's Fight Against 'Abusive' Credit Card Companies
With the Democrats now in charge of Congress the media is joining them in bringing back some favorite of their favorite boogeymen and on this morning's Today show that boogeyman took the form of the credit card companies and their "abusive" practices. Teasing a Lisa Myers report NBC's Ann Curry charged that credit card companies are "...accused of making it difficult for the average person to pay off that bill. We're gonna show you some of the tactics they allegedly use to keep the dollars flowing in." To which Today host Meredith Vieira piped in: "It's pretty awful."
Throughout the segment the credit card companies were portrayed in almost loan shark terms that had them taking "advantage" of unwitting customers. In her report NBC's Lisa Myers told the story of mild-mannered Charlie Bassham's struggle against the credit card companies and then brought on Democratic Senator Carl Levin as the proverbial hero to the all the Charlie Bassham's across America.
The following are the various teases and then the full Myers segment as it aired on the March 7th Today.
Ann Curry: "And then if you can't seem to get out of credit card debt it might not be an accident because the nation's biggest credit card companies are on the firing line in front of Congress today accused of making it difficult for the average person to pay off that bill. We're gonna show you some of the tactics they allegedly use to keep the dollars flowing in."
Meredith Vieira: "It's pretty awful."
Curry: "But up next how credit card companies stack the deck against you even when you're trying to your very best to do the right thing."
Meredith Vieira: "Do you ever feel the pressure when that credit card bill comes in the mail and it is time to pay up? Well this morning the tables are being turned and it is the credit card companies themselves on the hot seat in front of Congress. NBC senior investigative correspondent Lisa Myers has more. Lisa, good morning."
Lisa Myers: "Good morning, Meredith. Today the CEOs of the top three credit card companies in this country, Citi, Chase and Bank of America are being grilled under oath about industry practices which critics say are abusive and designed to keep millions of Americans in debt. For Charlie Bassham paying his credit card bills on time, every time was a priority. And sometimes it was tough."
Charlie Bassham: "We're a middle-class family facing all the pressures that, that most families face and do not live extravagantly."
Myers: "But last year after missing a payment by a couple of days for the first time he was slapped not only with a late fee but also a higher interest rate. Raised from 10.4 percent to a staggering 32.3 percent, leaving him struggling to make monthly payments."
Bassham: "I really couldn't believe, I'm sitting here thinking that is what they think of you. They don't care, you're just a number. You're just an account. All they want is the interest."
Myers: "A recent government investigation found that in the last several years the credit card industry has piled on a complicated scheme of fees, practices and interest rates that significantly increase consumer cost. Late fees and over-the-limit fees have more than double. Payments are first applied to balances carrying the lowest interest rate. A single late payment can drive up interest rates on other credit cards. And when a consumer fails to pay his entire monthly balance interest is still charged on the amount paid, as well as on what's not paid."
Sen. Carl Levin: "They charge you interest on the money that you paid in a timely way it seems to me is outrageous."
Myers: "Of course all these costs and fees are spelled out by the companies in tiny, fine print and in language even a senator with a Harvard law degree is hard pressed to understand."
Levin: "Well let me try a few lines...'Recalculate separate balances subject to finance charge for category A balances and category B balance...'Calculating daily balance for each day prior to the statement's billing cycle that had a pre-cycle cash advance balance'...Clear as mud. Nobody can understand that."
Myers: "The Basshams refinanced their home to pay down their credit card debt but are still angry about what happened to them after falling just a little behind."
Bassham: "I think it's totally unfair and it's designed, it's designed to, to, you know, to keep people further in debt for a longer period of time. It just makes the banks richer."
Myers: "Now one of the goals of today's hearing is literally to shame the CEOs of these companies into abandoning what critics calls the most abusive practices and to get much clearer disclosure language, Meredith, so that consumers better understand just how much trouble they can get into."
Vieira: "Lisa there are a lot of people who owe on their credit cards and they pay the minimum every month on time, figuring eventually that they will pay down the debt. So what is wrong with that?"
Myers: "Well the ultimate harm, Meredith, is that you'll end up paying a heck of a lot in interest. Take the average American with about $5000 in credit card debt. If you're interest rate is around 16 percent it would take 12 years to pay that off making the minimum payment and you'll end up paying $2500 in interest. And all that assumes you don't make any new purchases."
Vieira: "And what are the credit card companies saying about all of this?"
Myers: "Well that all of their practices are legal and fully disclosed when consumers sign up for a card. The banks also argue that many consumers are paying lower rates than they used to. That it's those considered greater credit risks who get hit with extra fees and higher rates."
Vieira: "So Lisa what's a consumer do to avoid being taken advantage of this way?"
Myers: "Educate yourself, compare interest rates across card and try to pay your monthly balance in full. And if you are tempted to put a big ticket item on plastic there are Web sites that have calculators that let you plug in your debt and your interest rate and learn just how long it will take off to pay that money, how long it will take to pay off all that money, which may give you second thoughts."
Vieira: "Okay Lisa Myers, thank you very much."
Myers: "You bet."