According to court papers, Ruth M. Owens, a 53-year-old disabled woman, paid the company $3,492 over six years on a $1,963 debt only to find that late fees and finance charges had more than doubled the size of her remaining balance to $5,564.
The exhorbitant late fees, found in the fine print of the credit card agreements, are designed to trick honest customers into paying extra money. They go far beyond what it actually costs the credit card company when a customer pays a few days late. All of my utility providers seem to be able to make a profit just fine without charging a $25 late fee.
Although one hates to recommend government regulation, we see that the unregulated free market has failed the consumer. Both the consumer and the credit card industry itself would benefit from fair and uniform standards.
If under tighter uniform rules, some consumers would no longer qualify for credit cards, well that would be to their benefit, because they would be relieved of the temptation to spend beyond their means.
Read my post about bankruptcy reform.