With the economy in a downward spiral, more and more people are taking advantage of credit card offers to make ends meet, but are the credit card companies actually taking advantage of their customers?
In the week in which federal regulators adopted sweeping new rules for the credit card industry, NOW meets families struggling to pay off their credit card debt. Such debt has become significantly larger thanks to questionable industry practices like doubling and tripling interest rates, increasing fees and penalties, and shrinking credit limits.
We meet people like Andrew Spurlock and his wife Michelle, who are raising three children while watching the interest rates and fees on their credit cards skyrocket. Michelle was horrified when her interest rate jumped from seven percent to 30 percent from one day to the next, despite claiming she always paid her monthly minimum. Michelle and her husband are fighting off financial ruin as they struggle to pay off their debt.
Harvard Professor Elizabeth Warren, an expert on debt and the middle class, says credit card companies are deceiving customers in order to maximize profits. "You would think that if you upheld your end of the contract that the contract would be binding. But in the case of credit cards, you would be wrong," Warren, tells NOW.
This week, NOW takes a hard look at the small print in credit card offers, and at Congressional legislation aimed at regulating the industry.
Are you getting the credit you deserve? Watch Credit Crunch to find out.