Hope for a Credit Card Victim

I was the prey in the predatory lending crisis. How to make every credit card mistake and still survive.

Two major strides were made recently in the world of debt management. President Barack Obama signed the Credit CARD Act of 2009 into law. That same week, I mailed a check for the remaining balance of my First Premier credit card. These two actions are related not just because they deal with credit cards, but also because they deal with really bad credit cards.

When I say bad, I'm talking about cards like the one I just paid off. It's never had a zero balance. Ever. The Visa arrived in my mailbox some years ago swollen with over $170 in fees on a $250 credit limit and with a 19 percent interest rate. And since there's a fee to view my account online and a fee to pay over the phone with a representative, I plop my payments in the mail.

Oh yeah, not only has the card never had a zero balance, it never will. The bank charges a $6 monthly "finance fee," balance or not.

I'd always assumed that whack terms like these and yo-yoing interest rates were punishment for resorting to plastic in the first place. These were issues that could not be argued or reported. I also figured that the nastiest credit card deals were reserved for folks like me-folks who made poor financial decisions in a former naïve life.

I enrolled in one college course my senior year of high school, a deed that sent a memo to the credit card underworld that I was a "college student." I was given four credit cards by the time I was 19 and defaulted on all of them by 21.

After using financial aid to pay the debt off, I needed a fresh start to rebuild my credit. The First Premier card, with all its funk and fees, was the only one I could get.

To its credit (pun intended), having that card and making timely payments did open the door for better deals on credit cards. Yet there were times when the avalanche of fees seemed nothing short of criminal. Surely there should be consequences for defaulting borrowers, but where do you draw the line?

"It is a fundamental rule of lending that an increase in risk means that less credit will be available and that the credit that is available will often have a higher interest rate," Edward L. Yingling, president and CEO of the American Bankers Association, told the Associated Press.

While the present state of the economy is more than enough reason to question some of these "fundamental rules of lending," let's roll with the logic for a moment. Jane's a credit risk, she gets a higher interest rate. OK, cool. But a $14 payment ... to make a payment? Thirty-five dollar late fees? A card that comes with a built-in $179 balance? If these aren't examples of extortion, I don't know what is.

The principle behind the Credit CARD Act of 2009 is the same one that underlies why cruel and unusual punishment is illegal in this country. There's a right and a wrong way to penalize people. Struggling individuals become struggling communities which become a struggling country.

Faith Maginley is a freelance writer and journalist in Central Florida.