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Nancy Feig
Nancy Feig
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Making Credit Card Terms More Transparent

Chase and Congress take steps to combat abusive credit card practices. But is it too late for some consumers? By Nancy Feig

Chase and Congress take steps to combat abusive credit card practices. But is it too late for some consumers?

By Nancy FeigOver dinner and drinks the other night, my friend, a public-school teacher in Spanish Harlem, told me about her credit card problems. Exasperated, she told me how she's embroiled in a credit-card catch-22. A credit card she received in college now has a balance she's having trouble paying off. And because she didn't read the fine print, a few missed payments has earned her a 29 percent interest rate and a huge monthly minimum. Eager to transfer the balance to a lower-interest credit-card, she applied for a few other cards. But because of the missed payments and inability to pay her monthly minimum, no one else will issue her a credit card.

If she had only known the consequences of her missed payments earlier, she might have been able to prevent her current situation. But as 20-year-old getting her first card, she was probably too excited to read the fine print. Well, truth be told, I'm sure most people don't read the fine print when applying for a credit card, regardless of age or education.

My friend's situation represents millions of Americans who are drowning in credit card debt. This is a problem that is prompting members of Congress to draft legislation to end abusive credit card practices.

"The credit card industry thrives on the confusion and powerlessness of consumers to both nickel and dime the average card-holder and to commit highway robbery of anyone who slips up even in the slightest," said U.S. Sen. Carl Levin (D-Mich), one of the strongest supporters of credit card reform, at a recent hearing.

One large financial institutuion is taking it upon themselves to make credit cards terms more transparent for consumers. Chase Card Services announced the expansion of Chase Clear & Simple, an ongoing program designed to help Chase customers better understand and manage their accounts, with 10 consumer-friendly initiatives. In addition, Chase is launching an online site, that will feature tools and information to empower customers. In creating the suite of Chase Clear & Simple materials, the company says it wants to increase transparency with easy-to-understand communications and empower cardmembers to make smarter choices with tools that will help them more effectively control credit card accounts and avoid the fees they don't want to pay. "Through extensive research, we listened to what consumers had to say, and more than one in five tell us that when choosing a new credit card, easy-to-understand terms and rules was a very important selection criteria for them," said Carter Franke, marketing executive, JP Morgan Chase. "More than half of consumers also believe that a credit card company should be proactive in contacting them with advice if they make late payments, exceed their credit limits or exhibit other behavior that could get them into financial difficulty."

The Chase Clear & Simple program offers 10 initiatives: 1. Incentives to Pay on Time & Avoid Fees: This summer, Chase will offer cardmembers a $10 credit when they sign-up for helpful tools like free alerts, auto-pay and online statements so that they can more easily manage their accounts, avoid late fees and preserve their best rates. 2. Proactive Outreach: Because Chase wants to help its customers stay out of financial trouble, Chase is proactively sending letters, e-mails or phone calls to customers who are showing signs of financial stress, and even before they get behind on their payments, to offer solutions and custom payment strategies. 3. Choose Your Due Date: Chase customers can select their own payment due date, choosing the date that is most convenient for them. 4. Over-Limit Controls: Customers can protect their accounts against over-limit fees by adding customized "controls" to their accounts that contain their spending within their credit limit. 5. Military Shouldn't Pay Extra Price: Chase knows that military members sacrifice greatly to serve their country and wants to make managing Chase accounts especially easy for customers making that commitment. Chase has a history of going above and beyond federal law in its treatment of military customers, such as reducing interest rates on all balances - including those incurred after going on active duty - and not charging late or over-limit fees on those accounts. 6. Helping Those Who Are New to Credit: Chase is committed to helping first-time users of credit cards - especially college students - learn how to use credit responsibly. To help them pay on time, the company has a range of programs to remind them of due dates, let them know if a payment is late and offer advice on how to manage their credit card use. 7. Simplified Cardmember Communications: Chase has designed an ongoing series of communications to help cardmembers easily understand and control their credit card accounts and avoid fees. For example, Chase is testing a new card "user's guide" that lays out the rules for credit card use in clear and simple language so that customers understand what responsible credit use means. A communication has already gone to about 30 million cardmembers outlining for them - in plain language - tools and tips on avoiding fees and keeping their accounts in good standing. 8. Chase Clear & Simple Web Site: The Chase Clear & Simple Web site ( provides consumers with tips and information to help them better manage their personal finances and easy-to-use tools that empower customers to use credit cards wisely. 9. Payment & Budget Calculators: Chase offers a variety of free payment and budget calculators on its website to help with a wide range of financial planning, including a payment calculator that will allow consumers to calculate the length of time it will take to pay off any credit card balance. 10. Rate Reset: Even though 92 percent of Chase customers start and end the year with the same or better interest rate, Chase offers a solution for those customers who have slipped and made a few late payments. If a customer signs up for automatic payment and makes on-time payments for 12 consecutive months, Chase will ensure that the customer's rate is reset to the lower, original non-promotional rate.

While I applaud Chase and the government for taking steps to aid credit card customers going forward, I worry that they are not doing enought to help those that already in debt. Will the credit card problems of a hard-d working 28-year old school teacher ruin her credit for the rest of her life?

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