Education » Articles » Congress Questions Credit Card Industry

Congress Questions Credit Card Industry

How Does UW Credit Union Compare?

Recently Congress called on some of the largest credit card issuers to explain certain credit card fees and practices. Here's what is being scrutinized, and how UW Credit Union compares.

Trailing interest charges.

This occurs when you pay your balance in full and on time; the interest charge accrues on your balance before your due date.

UWCU: No trailing interest charges.

Universal default rates.

If you fall behind on payments to any lender, your credit card issuer will increase your card's interest rate. For example, if you forget to pay your phone bill one month, the next month your credit card issuer can increase your interest rate—for that month and going forward.

UWCU: We do not include universal default features.

Overlimit fees.

Purchases are approved, even when the transaction amount surpasses the allowable credit limit. Overlimit fees may also be assessed even when a fee is what caused the overlimit situation.

UWCU: We decline any purchase that would cause a member to exceed their balance maximum. Since posting time frames vary, there could be an occasion that causes an overlimit situation. We do not charge an overlimit fee when the limit was exceeded due to another fee.

Lower minimum payments.

Minimum payments of 5% have been reduced to 2%.

UWCU: We have not lowered our minimum payment due.

Retroactive rate changes.

This occurs when an upcoming rate change is applied to your entire balance, including purchases that were made long before the rate change.

UWCU: We disagree with this practice and have never done it.

Mandatory arbitration clauses.

To dispute a fee or decision, you can no longer sue the card issuer in court. Instead you must file a grievance with a third party who will rule on your case (eventually). Consumer advocates believe that arbitration companies are more likely to rule in favor of the credit card company, compared to a neutral court of law.

UWCU: We have no arbitration clauses.

More educational articles »