AlterNet: Europe Beware of the Credit-Industrial Complex

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Europe Beware of the Credit-Industrial Complex

In 2004, US banks pocketed $32 billion in service fees, up from $21 billion in 1999. According to BusinessWeek, such fees accounted for 76 percent of profits at the Midwestern bank, TCF. Wells Fargo in San Francisco reportedly charges $2 every time someone with a low balance calls a service representative, and a whopping $30 an hour when a rep helps someone reconcile an account. Not surprisingly, the majority of these fees falls upon the poorest customers. One out of five customers switches banks because he or she is so outraged by these charges. One estimate by Gartner Research shows that it costs banks less than 50 cents to return a payment request, while turning around and charging us anywhere from $25 to $40 for this "service." The barely regulated banks are getting away with one usurious practice after the next: In addition to the subprime fiasco now threatening the entire economy, there are the extortionate service fees on your bank accounts and the escalating interest fees, late fees and truncated payment cycles on your credit cards. Millions of us now get credit card bills that give us 10 days -- and those aren't 10 business days -- to pay up or get hit with a late fee. No wonder the credit card industry has been one of the most profitable in the country, earning on the order of $30 billion annually.

Note EU-Digest: The EU Commission can do European consumers a great service to scrutinize the activities of the Credit Card Industry in the European Union to avoid that situations which American credit card holders are experiencing in the US, don't happen in Europe.