Consumers for Responsible Credit Solutions Calls 41 Percent Interest Rate Visa Credit Card 'Abusive'

March 10, 2004
 

To: National Desk

Contact: Mia Freis of Consumers For Responsible Credit Solutions, 202-354-8270

WASHINGTON, /U.S. Newswire/ -- Consumers For Responsible Credit Solutions (CRCS), a national advocacy group representing consumers benefiting from credit counseling, today blasted the "Aspire Gold Visa" which saddles already troubled consumers with an annual interest rate as high as 41 percent.

"A 41 percent interest rate on a credit card is simply abusive," said CRCS Executive Director Michael Barnhart. "If someone has such a poor credit rating that it requires a 41 percent interest rate to approve them, it's probably safe to assume they've already got such serious credit problems that another credit card will only make things worse. To bait someone with poor credit with another credit card and stick them with such an outlandish rate is simply irresponsible.

"This is what happens when we lack national standards for interest rates for credit cards," added Barnhart. "It allows already troubled consumers to be preyed upon."

According to story on the Aspire Visa on Cardweb.com, "Notwithstanding a current 4 percent prime rate, you could pay an APR as high as 35 percent for a major credit card. Miss payments and the rate could go as high as 41 percent. CompuCredit and Columbus Bank & Trust have restarted marketing of the "Aspire VISA Gold," targeted at consumers with weak credit scores. The card carries a minimum interest rate of 27.75 percent. However, applicants with lower scores may be charged a minimum 29.75 percent annual interest rate, or a minimum 35.00 percent annual interest rate. Cardholders who become delinquent face a minimum interest rate of 33.75 percent, 35.75 percent, or 41.00 percent. But, all the interest rates on the "Aspire VISA Gold" are variable. If the prime returned to 9 percent, the annual interest rate on the highest priced "Aspire VISA Gold" would hit 45 percent. After all, it's a 'Gold' card."

Consumers for Responsible Credit Solutions (CRCS) is a nationwide group of consumers who have benefited from credit counseling, joined by academics, government officials and pro- consumer organizations. CRCS' mission is to represent consumers who have benefited from credit counseling, in order to help other Americans successfully manage debt and avoid bankruptcy. CRCS serves as a source of independent, balanced information on debt management, a liaison with the credit counseling industry and a voice for consumers on industry issues. For more information, go to http://www.responsiblecredit.com.