考研英语阅读真题文章三十篇之一

　　Higher rates! Bigger fees!

　　In recent weeks, youve heard plenty about the sleazy side of the subprime mortgage business. Rising numbers of borrowers are losing their homes after being lured into high cost mortgages they couldnt afford. But theres another piece of the painful subprime story that hasnt hit the headlines yet: costly-sometimes abusive-subprime credit cards. Theyre bleeding millions of borrowers who didnt know what they were getting into.

　　Subprimes come in two types: Cards that are crazily costly to begin with and cards that look good but hide big traps. You know about traps if youve paid some bills late and are now being charged with interest at 30 percent. In general, heres how the business works:

　　The bottom feeding cards-for people with damaged credit-offer you a decent interest rate on credit lines up to $3,000. When the card arrives, however, your line might be only $250. And then come the fees! Program fees. Account set up fees. Participation fees. Annual fees. Theyre charged to your tiny credit line, leaving you almost nothing to spend.

　　Two better known card issuers with a big subprime business are Capital One and HSBCs Orchard Bank. They charge lower upfront fees than other cards do. But if you fall behind, its tough. Cap Ones penalty rate is currently 28.15 percent. Orchard Bank doesnt disclose its penalty rate online and wouldnt tell me what it is . Cap One has a reputation for issuing multiple cards to people who bump up against their credit limits. That gives them two cards, with two low limits, to overspend.

　　Lenders have figured out many ways of extracting fees. Theres universal default , where a late payment on one card can trigger high penalty rates on every card you own. Theres the endless late fee , where your payments never catch up with the new penalties you re charged. Theres two cycle billing -too complicated to explain here, but which amounts to charging interest on balances that youve already paid. And retroactive price hikes, where banks impose higher rates on old balances as well as new ones. What other business can get away with raising the price of something you already purchased? says Travis Plunkett of the Consumer Federation of America.

　　These practices startle consumers who think such high fees and interest rates must be against the law. But the Supreme Court effectively deregulated credit card rates 30 years ago, and 10 years ago it deregulated the size of the fees a bank could charge. Prior to fee deregulation, late fees hovered between $13 and $15, says Robert McKinley of CardWeb.com, which tracks the business. Now they run from $30 to $40. Its out of control, he says. Banks know theyve pushed this too far.

　　This year, however, the new Congress started holding hearings. Suddenly Citi dropped universal default and JPMorgan Chase ended two cycle billing. But those are just gestures. Without fee caps or usury laws, were in the bankers hands.