Monday, September 20, 2004

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Credit Card Holders Beware

Top 10 hidden dangers of credit cards
By Peter Davidson • Bankrate.com


Credit cards. It may seem very difficult to get by without them in this day and age, but the fact of the matter is it's becoming more and more expensive to live with them.

That's because credit card companies have managed to stack the deck in their favor, thanks to obliging lawmakers and regulators who have allowed them to gouge consumers for exorbitant fees and unconscionable interest rates.

And you don't have to look hard to find out how tricky they can be.

"Just read the fine print of your credit card agreement," says Ed Mierzwinski, Consumer Program Director of the U.S. Public Interest Research Group in Washington, D.C. "It's a license to steal."

"The industry is out of control, it's getting away with robbery," says Robert Heady, author of the best-selling book The Complete Idiot's Guide to Managing Your Money.







Robert Manning, author of Credit Card Nation: The Consequences of America's Addiction to Credit, agrees. "The system is weighted against the consumer," he says.

But knowledge is power, and if you want to avoid getting squeezed, you should be aware of the top 10 money-grabbing tricks credit card companies have up their sleeves:

1. The universal default penalties. Card issuers regularly check their customers' credit reports for late payments on any of their bills. Any late payment can be used as an excuse to trigger a hike in your credit card's interest rate, even if you have never made a late payment to the card issuer.

A recent study by Consumer Action, a San Francisco-based consumer advocacy group, found that 39 percent of credit cards had universal default penalties in 2003. This year the figure jumped to 44 percent.

2. Bait-and-switch card offers. Direct mail offers generally advertise the issuer's premium card at an eye-popping low interest rate, while the fine print says the company can issue a more costly non-premium card with a higher annual percentage rate if you fail to qualify for the premium card. Just because you apply for a card with a low rate doesn't mean the card that shows up in the mail actually carries that low rate.

3. Shrinking grace periods. Historically, grace periods -- the time during which your transactions don't accrue interest -- were 30 days long. They now average 23 days, and some issuers have whittled the grace period to 20 days. Some cards have no grace period at all.





4. Two-cycle billing. While most card issuers use the standard one-month method to calculate interest charges, some use a method that calculates interest on two previous months' balances. Companies compute interest charges on your average daily balance by adding each day's balance and then dividing that total by the number of days in the billing cycle. Some do it on a monthly basis, but others use the average daily balance over the last two billing periods. If you carry a balance this usually means that you've lost any grace period on your new purchases. Unless you pay off your balance for two months in a row, the two-cycle method will include the prior cycle's average balance in calculating your finance costs even though you paid off that cycle's balance in full. You don't face that expense with a single-cycle card.

5. Inactivity charges. Credit card companies don't make money if you don't use your cards. Keeping your card in your wallet could incur a hefty fee, as much as $15 if you haven't swiped your card in six months, but charges may be incurred for shorter intervals.






6. Late payment fees. A recent study by Vertis, a marketing company that researches consumer credit usage and payment habits, found that 2 percent of all credit card holders occasionally miss getting their credit card payment in on time. They pay dearly. The national average is $29. MBNA (one of the largest issuers of credit cards), Bank of America and Providian are among the steepest chargers. Their late-paying customers get squeezed $39, according to Consumer Action.

And there's yet another downside to paying late: A higher interest rate. In a 2003 survey, Consumer Action found that just one or two late payments will trigger a higher interest rate.

7. Over-limit fees. Exceed your credit limit by even one cent and you'll be hit with over-limit fees of $25 to $39. And don't forget -- charges such as a $39 late fee can then trigger a $39 over-limit fee.

8. Balance transfer fees. It's the big tease: A rock-bottom introductory rate to transfer your balance, but that tantalizing low rate may come with a steep transaction fee, 3 to 5 percent, for transferring your balance to their card, which means transferring $1,000 at 4 percent will cost you $40. "It's really very tricky," says California attorney Howard Strong, author of Credit Card Secrets. He adds, "They have all these sneaky fees. You need to be extremely cautious."

By the way, last year, the industry took in $43 billion in fee income, up from $39 billion in 2002, according to R.K. Hammer Investment Bankers. The industry's take is expected to increase again this year.
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9. Mandatory arbitration. "If there's a dispute, you may have given up your right to your day in a court of law," says attorney/author Strong. "If that's the case, your only recourse is mandatory arbitration."

10. Payment allocation. If you're carrying a balance, and you use your credit card for purchases and cash advances, or you're paying off a promotional rate and then add charges beyond the promotional period, your card company will first allocate your payments to the charges that will earn it the most money. In most cases, that means it will apply your payment to the balance that has the lower rate, thereby allowing the balance with the higher rate to accumulate and compound interest.




-- Posted: Sept. 15, 2004
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THE LYNCHING OF DAN RATHER


On British TV, Dan feared the price of "asking questions"
By Greg Palast

September 21, 2004 00:29

"It's that fear that keeps journalists from asking the toughest of the tough questions," the aging American journalist told the British television audience.

In June 2002, Dan Rather looked old, defeated, making a confession he dare not speak on American TV about the deadly censorship -- and self-censorship -- which had seized US newsrooms. After September 11, news on the US tube was bound and gagged. Any reporter who stepped out of line, he said, would be professionally lynched as un-American.

"It's an obscene comparison," he said, "but there was a time in South Africa when people would put flaming tires around people's necks if they dissented. In some ways, the fear is that you will be necklaced here. You will have a flaming tire of lack of patriotism put around your neck." No US reporter who values his neck or career will "bore in on the tough questions."

Dan said all these things to a British audience. However, back in the USA, he smothered his conscience and told his TV audience: "George Bush is the President. He makes the decisions. He wants me to line up, just tell me where."

During the war in Vietnam, Dan's predecessor at CBS, Walter Cronkite, asked some pretty hard questions about Nixon's handling of the war in Vietnam. Today, our sons and daughters are dying in Bush wars. But, unlike Cronkite, Dan could not, would not, question George Bush, Top Gun Fighter Pilot, Our Maximum Beloved Leader in the war on terror.

On the British broadcast, without his network minders snooping, you could see Dan seething and deeply unhappy with himself for playing the game.

"What is going on," he said, "I'm sorry to say, is a belief that the public doesn't need to know -- limiting access, limiting information to cover the backsides of those who are in charge of the war. It's extremely dangerous and cannot and should not be accepted, and I'm sorry to say that up to and including this moment of this interview, that overwhelmingly it has been accepted by the American people. And the current Administration revels in that, they relish and take refuge in that."

Dan's words had a poignant personal ring for me. He was speaking on Newsnight, BBC's nightly current affairs program, which broadcasts my own reports. I do not report for BBC, despite its stature, by choice. The truth is, if I want to put a hard, investigative report about the USA on the nightly news, I have to broadcast it in exile, from London. For Americans my broadcasts are stopped at an electronic Berlin wall.

Indeed, Dan is in hot water for a report my own investigative team put in Britain's Guardian papers and on BBC TV years ago. Way back in 1999, I wrote that former Texas Lt. Governor Ben Barnes had put in the fix for little George Bush to get out of 'Nam and into the Air Guard.

What is hot news this month in the USA is a five-year-old story to the rest of the world. And you still wouldn't see it in the USA except that Dan Rather, with a 60 Minutes producer, finally got fed up and ready to step out of line. And, as Dan predicted, he stuck out his neck and got it chopped off.

Is Rather's report accurate? Is George W. Bush a war hero or a privileged little Shirker-in-Chief? Today I saw a goofy two page spread in the Washington Post about a typewriter used to write a memo with no significance to the draft-dodge story. What I haven't read about in my own country's media is about two crucial documents supporting the BBC/CBS story. The first is Barnes' signed and sworn affidavit to a Texas Court, from 1999, in which he testifies to the Air Guard fix -- which Texas Governor George W. Bush, given the opportunity, declined to challenge.

And there is a second document, from the files of US Justice Department, again confirming the story of the fix to keep George's white bottom out of Vietnam. That document, shown last year in the BBC television documentary, "Bush Family Fortunes," correctly identifies Barnes as the bag man even before his 1999 confession.

At BBC, we also obtained a statement from the man who made the call to the Air Guard general on behalf of Bush at Barnes' request. Want to see the document? I've posted it at: http://www.gregpalast.com/ulf/documents/draftdodgeblanked.jpg

This is not a story about Dan Rather. The white millionaire celebrity can defend himself without my help. This is really a story about fear, the fear that stops other reporters in the US from following the evidence about this Administration to where it leads. American news guys and news gals, practicing their smiles, adjusting their hairspray levels, bleaching their teeth and performing all the other activities that are at the heart of US TV journalism, will look to the treatment of Dan Rather and say, "Not me, babe." No questions will be asked, as Dan predicted, lest they risk necklacing and their careers as news actors burnt to death.



"Bush Family Fortunes," the one-hour documentary taken from Greg Palast's BBC investigative reports, including the story of George Bush and Texas Air Guard, can be viewed, in part, at http://www.gregpalast.com/bff-dvd.htm

To receive more of Palast's investigative reports, sign up at http://www.gregpalast.com/contact.cfm