Oregon Public Broadcasting

Fees make big bucks for credit card companies.  In 2006, they made over $17 billion in penalty fees alone.

But a local public interest advocacy group is hoping to reduce the fees paid by Oregonians.  So they issued a 13-page report Wednesday outlining credit tips for consumers.

The report, issued by OSPIRG, comes in the middle of National Consumer Protection Week in Oregon. 

Matt Wallace is a consumer advocate for OSPIRG.  He says as the economy gets worse, these consumer tips become more relevant.

“While no one is forcing consumers to go out and get a credit card, it is a fact of life in our economy that credit cards are almost a necessity for most families as a way to build credit,” says Wallace. 

Having a credit card in good standing can help someone qualify for car and home loans.

But having a credit card with too much debt or a history of late payments can be detrimental.

Wallace encourages consumers to read the fine print on the credit card agreements, but says most people don’t.

“More and more families area using their credit cards to pay their bills, to pay their rents,” says Wallace.  “Now certainly that’s not ideal but it’s a situation that many people are in and we just want to make sure there’s a fair playing field.  That consumers know what the terms of their contract are and that we don’t have a lot of underhanded and unfair practices in the fine print.”

Wallace says one of these unfair practices is when a credit card company arbitrarily changes the due date for payment and the consumer doesn’t realize it.

“That’s a very common practice among credit card companies.  And the only explanation for that is it’s a way to ding consumers for penalty fees which can be up to $39 a month,” Wallace explains.  “And not only that, but it triggers in many case outrageous penalty fees of up to 40 percent.” 

Wallace recommends shopping around to compare credit card rates and terms before signing up.

Consumer protection is also a concern for the Oregon Attorney General.

The Attorney General has been working with a variety of agencies and non-profits to protect consumers from predatory lending and credit practices. But sometimes it takes someone complaining about a credit card policy before the state is aware of it.

“Frankly, a lot of these companies come up with things that we haven’t thought about yet so we haven’t been able to make it illegal,” says Tony Green, a spokesman for the Oregon Department of Justice.

Green says one goal of the state Department of Justice is to make the terms of credit card agreements simpler so that most consumers can understand them.

“When you consider all the paperwork, you know, most people have more than one credit card, they have loans to deal with, they have bills to pay, they have offers in the mail and it’s easy to kind of sign up for something in a way that you didn’t realize what all the terms were,” says Green.

He adds, “We’re trying to simplify things as much as possible so consumers don’t wind up getting taken advantage of, or just stumbling into something they really wouldn’t have done had it been explained clearly to them.”

The state has several events planned this week to educate consumers.  On Tuesday, the Department of Justice launched a Scam Alert Network.  They’ve also posted several scams and tips on their website.

OSPIRG’s Consumer Tips for the Downturn

Oregon Department of Justice Consumer Tips