Reuters: MasterCard Faces Probe, Details Auction- Rate Issues - by Svea Herbst-Bayliss

For the complete report from Reuters click on this link

MasterCard Faces Probe, Details Auction-Rate Issues - by Svea Herbst-Bayliss

Credit-card company MasterCard Inc. said on Thursday that financial regulators in Hungary are probing its interchange fees in Europe at a time these fees are coming under close scrutiny around the world. The European Commission has already cracked down on MasterCard when it told the company late last year to cut its interchange fees within six months or face heavy fines. In the same filing MasterCard also said that it faced some problems in the auction-rate securities market this month, which recently became the latest victim of the global credit crisis as liquidity dried up.

MasterCard shares fell as much as 3 percent before paring losses to trade down 2.3 percent, or $4.72, at $203.50 late Thursday afternoon on the New York Stock Exchange.

USA Today: US Credit card companies are getting away with murder - When interest rates hit 32%, there ought to be a law

For the complete report from Yahoo News click on this link

US Credit card companies are getting away with murder - When interest rates hit 32%, there ought to be a law

Wesley Wannemacher of Lima, Ohio, charged $3,200 on a new Chase credit card in 2001 to help pay for his wedding. That put him $200 over his credit limit - and into a riptide of penalty fees and interest rates. Wannemacher told a Senate panel Wednesday that he had paid Chase $6,300 over six years, nearly double his initial debt. Despite that, he still had a balance of $4,400.

For years, the Republican-controlled Congress ignored consumer outcries as the industry flooded Washington with campaign cash to protect its outrageous practices. Now, with the Democrats in control and probing those practices, the industry has made a few grudging changes. But some of the most egregious policies remain:
•Many card issuers hit consumers with penalty rates of up to 32.24% for a variety of infractions, most commonly late payments. Adding to the unfairness, the sky-high rates can apply to customers' entire balance, not just new charges.
•Some issuers impose these onerous rates on cardholders who pay them on time, but are late paying another creditor. That's akin to a mortgage holder raising your rate because you paid your phone bill late. Citi announced last week that it was dropping this much-criticized practice.
•Many banks impose fees of up to $39 - nearly three times what they were in 1995 - for paying even one minute late or going over a credit limit.

Unless Congress is planning to intervene individually in the case of every consumer caught in a web of credit card debt, it should set some markers to ensure that credit card issuers behave better than loan sharks.