OVERLIMIT? THAT WILL BE $650,000,000.00 PLEASE
Dec. 3, 2002
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According to the Dec. 3, 2002 Wall Street Journal, Bernstein Analyst Howard Mason estimates that the credit card bank Capital One (by itself!) makes $650 Million Dollars in annual revenue from fees paid by it’s “subprime” (less than stellar credit rating) customers (we are not talking about interest or finance charges, just fees, like overlimit or late payment fees. And even then, only from you folks that DARE to pay late, or are considered “less than perfect” credit risks!
Even these massive amounts of money are considered “chump change” compared to the estimated $9.7 Billion (that’s with a “B”) in total revenue that THIS ONE CREDIT CARD BANK will take in this year. Yes, folks, that is $9,700,000,000.00! ONE LENDER, and they are not the biggest, by far.
According to the Wall Street Journal, the fees work like this: Capitol One customers can request an “over the limit” authorization. If it is approved, the card company can grant additional credit on the credit card or credit line, and charge an overlimit transaction fee for the privilege. The decision facing a financial oversight council is whether these fees just pile more debt onto over-burdened consumers. DUH!
I’m sorry for my editorial excesses, folks. But please, PLEASE, contact your U.S. Representatives and Senators, and tell them what your experiences have been with your lenders, particularly credit card lenders. If you feel that more regulation of consumer finance lenders such as Capitol One is necessary, tell your elected representatives! In the past year, for example, credit card lenders, alone, have sent out over 5 BILLION credit card applications.
A proposed new law, intended by the consumer credit industry to strip away consumer protection laws contained in our current bankruptcy laws, will certainly be coming down the pike in the coming 108th Congress. PLEASE, PLEASE, contact your local Congressional representatives and MAKE YOUR VIEWS KNOWN, or you and many others will lose your right to gain effective debt relief through the U.S. Bankruptcy Code. Thank you, Tom Black.
