Card Issuers

The Rev. Nathaniel Pierce of Trappe says he transferred his credit card balance to a Chase card a few years ago after getting assurances of a low interest rate and low monthly minimum payments. Now, Pierce accuses Chase of bait and switch tactics. Chase notified Pierce that starting next month, his minimum payment is going from 2 percent to 5 percent of his outstanding balance, roughly raising his monthly payment from $100 to $250. He suspects the shift is tied to credit card reforms that take effect in February.

Jack McMillin of Alaska says consumers should be able to count on their credit card terms not changing - at least for a specified time. June Peterson of Florida complains that she has barely any time to mail in her card payment before interest starts racking up. Lee and Patsy Solomon want card issuers to print the payment due date in bigger type and display it prominently on the monthly bill. "It's as if they want you to be late so as to accrue interest charges," the California couple say. And Floridian Ben Brooks just wants to see a certain credit-card issuer "gutted, fined and shut down."

WORLD Shiite cleric's aide killed Gunmen killed an aide to Ayatollah Ali al-Sistani in the southern city of Basra, police said yesterday, the latest in a string of attacks targeting associates of Iraq's leading Shiite cleric. Iraqi civilian deaths rose in August to their second-highest monthly level this year. pg 23a Calderon avoids annual speech Mexican President Felipe Calderon turned over his first State of the Nation report to lawmakers yesterday but became the second president in a row to fail to give the annual speech in Congress amid lingering anger over last year's disputed election.

Question: What do you get when you cross the promotion-happy credit-card industry with the IPO-crazed Internet?Answer: Just about anything you want.American Express Co. weighed in last week with Blue, a new credit card boasting of an introductory rate of 0 percent, online access to account statements and the ability to download into Quicken or Microsoft Money programs.Prefer a traditional rewards program? Club Lycos and Nextcard dole out bonus points for each dollar charged on their cards.

CREDIT CARDS are hitting the lowest interest rates they've charged in years. That's great news for holiday shoppers, who threw around plastic this year as if they were millionaires.When the final tally is in, shoppers are expected to have charged $375,000 per second in each of the holiday's peak buying days, says Robert McKinley of CardWeb in Gettysburg, Pa., which tracks the card industry. (Those special days: Nov. 27, Nov. 28 and Dec. 24.)Most of the new card mailings offer 15 percent or less on unpaid balances, according to Credit Card News, a Chicago trade magazine.

I'm a "deadbeat" - and proud of it. Credit card companies hate people like me. Ironically it isn't because I'm stiffing them on my bill, which is the normal definition of a deadbeat. No, it's only in the perverse credit-card world that someone who pays on time is a "deadbeat."In credit-card philosophy greed is good - it leads to debt. Model customers run up bills and pay in installments, with the high interest that makes the business so lucrative.Too many people have been gulled into believing that plastic somehow represents "free money."

First Maryland Bancorp said yesterday that it is selling its $623 million credit card portfolio to Bank of America N.A. for an undisclosed price, and that it will exit the credit card issuing business altogether.Stiff competition, slim profit margins and high credit card delinquencies are the main factors behind the decision to sell, said Richard H. White, president and chief executive of First Omni Bank N.A., First Maryland's Delaware-based credit card subsidiary."Profitability for all of us [credit card issuers]

WILMINGTON, Del. - Charles Cawley has long seen gold where others see lead, mining the overlooked business opportunity to the hilt and making it pay off handsomely. Take, appropriately enough, the gold credit card, which despite its hue left many bankers cold.In 1983, when he was head of the small credit card unit of the Maryland National Bank, Cawley pounced on the new Gold Mastercard, becoming the top issuer of a product that other banks had chosen to ignore. He repeated the feat last year as head of the now-independent unit, renamed MBNA Corp.

NEW YORK -- Back to school, for the modern student, means back to charging up a storm on credit cards. More than half the 9 million full-time college undergraduates have cards today, Visa reports. They're issued even to students who have no credit history and little income.Many students use their cards responsibly. Assuming you're not a serial shopper, it pays to get a card when you're in school. You'll never again be accepted for credit on such easy terms.But some students go so far into debt at so early an age that they ruin their credit history even before they graduate.

American consumers have the opportunity to benefit from the lowest credit card rates in more than 20 years.The average bank card rate has fallen 2 percent in the past year to around 16 percent, but you may be able to cut that rate in half by shopping around.This column has railed for years about how high credit card rates remain no matter what occurs with savings rates. But now recession, consumer awareness and industrywide competition are making their presence felt."Since we've offered low-rate credit cards, we've seen explosive growth, our cardholders doubling to 60,000 in a year and a half," said Richard Rieser, president of Oak Brook Bank, Oak Brook, Ill. [800]

On his way home from work recently, Rick Niles of Laurel stopped at a gas station to fill up and as usual pulled out his Shell credit card to pay. But this time, the card didn't work. "I thought it was a probably just a problem with the gas station," said Niles, 40, an aerospace engineer with Mitre Corp. in Northern Virginia. Days later he learned the truth. Citi, the card's issuer, had canceled his two-year-old account without advance notice, even though Niles says he pays the $200 or $300 balance each month and has a high credit rating.

Theodore Casser has been a loyal Bank of America credit card customer for about 10 years. But the prospect that the bank might start charging him an annual fee because he pays off his balance monthly has the Baltimore software developer ready to sever that relationship. "I take it almost as an insult," says Casser, who hasn't heard yet if he will be among the small percentage of unprofitable Bank of America customers to be charged a $29 to $99 fee starting next year. "I'm happy to take the hit to my credit rating to cancel the card."

Could a sign of economic recovery be in your mailbox? Synovate, which tracks credit card solicitations, reported last week that card offers mailed to consumers dropped about 6 percent from the first to second quarter this year, a far milder decline than in recent quarters. And some big issuers, such as Bank of America and Citibank, have actually increased their offerings. "That's the flattening out or bottoming out," says Anuj Shahani, director of competitive tracking services with Synovate's financial services group.

Thanks to credit card reforms kicking in next year, card issuers will have a tougher time getting teenagers on college campuses to apply for plastic without their parents' knowledge. But what about now? Students will arrive on campus next month, and card issuers will be there to greet them at many schools. Will card companies make one more big final push to sign up students? "Issuers will try to continue to market to college students between now and the time the legislation takes effect," says Bill Hardekopf, chief executive of LowCards.

The Rev. Nathaniel Pierce of Trappe says he transferred his credit card balance to a Chase card a few years ago after getting assurances of a low interest rate and low monthly minimum payments. Now, Pierce accuses Chase of bait and switch tactics. Chase notified Pierce that starting next month, his minimum payment is going from 2 percent to 5 percent of his outstanding balance, roughly raising his monthly payment from $100 to $250. He suspects the shift is tied to credit card reforms that take effect in February.

Are you seriously behind on credit card payments? Next time the card company calls to collect, you might see if it's willing to settle for less than you owe. Such settlements have been around for years. But the new twist, as recently reported by The New York Times, is that not only are settlements increasing but front-line customer representatives are making settlement offers on the spot. "It doesn't mean everyone out there will qualify for a settlement," says Curtis Arnold, founder of CardRatings.

Ready access to credit, coupled with teaser interest rates, generous reward programs, grace periods and the absence of annual fees enticed many Americans to rely on credit cards for even the smallest purchases. But when credit card companies hiked interest rates with little warning and slapped on snowballing penalties, consumer groups fought for change. Now that President Barack Obama has signed a credit card reform bill into law that curtails many of the fees and billing practices that have been so lucrative for card issuers, credit card representatives are predicting these perks may be harder to find as the industry evolves in response.

Even as a growing number of people can't pay their credit card bills, major banks are jacking up interest rates and clamping down on credit limits. But two new bills in Congress are taking aim at what many consider credit card abuses, and legislators should act quickly to make them law. The House and Senate bills would prohibit banks from raising interest rates on existing balances, something banks and credit card companies have been doing with increasing...

For years, consumers deep in debt turned to counseling agencies to negotiate repayment plans with credit-card issuers. But consumers are now in such dire straits, some can't even afford repayment plans despite concessions from card companies. So the National Foundation for Credit Counseling, a trade group for credit counselors, approached card issuers about making even more concessions for consumers without the resources to repay under a regular plan. The group announced last week that the top 10 card issuers, including Capital One, Bank of America, Chase Card Services, Discover and American Express, signed on. Of course, it is in the interest of credit-card companies to be more lenient, even though they will collect less in fees and interest.

In boasting a few days ago about Citigroup's $19 billion operating profit for January and February, CEO Vikram Pandit rattled off some of the cash cows, including "credit to consumer and corporate customers." That means you, credit card users. The good news is that Citi and other banks plastered by bad mortgage loans are partly rebuilding their capital with huge spreads between what they pay to get money and what they charge to lend it. The bad news: That means continued high interest rates on credit cards - despite the government's bringing short-term rates to historically low levels and despite the billions in taxpayer bailouts that Citi and some other card banks are getting.