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Mike BarryEye on the Island

By Mike Barry
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Credit Card Cons

I was pulled off my bank branch’s line recently, and had one of the bank’s customer sales representatives say they would take care of me. That’s great, I thought, I can withstand a brief sales pitch, deposit these two checks and be on my way.

 

The sales pitch went longer than I anticipated. In fact, I started to get angry and, considering my Irish-American bloodlines, it takes me a surprisingly long time to become agitated. You have to work hard at it to ‘get my Irish up,’ as they say. Back to the story: while processing my simple transactions, the bank representative touted numerous products, none of which I wanted, and offered a $100 gift certificate for agreeing to buy one. I politely declined the offers and the bank’s representative, who was presumably trained to placate customers rather than repel them, expressed astonishment at my stance. “You mean to tell me you don’t want a hundred dollars?” he stated. No, I said, and left, resolving to broaden my electronic banking skills to avert future encounters such as this one.

This incident came to mind for me while reading U.S. Rep. Anthony Weiner’s (D-Forest Hills) report on Store Credit Card Rates: Consumers Beware. It was released last week as a way to remind his constituents that Rep. Weiner had introduced legislation to increase point of purchase disclosure of interest rates, grace periods and annual fees for retail store credit cards. Doesn’t everyone know that retail store credit cards have negative consequences for your credit score, their teaser deals are aptly named, and that major credit cards offer lower interest rates?

Rep. Weiner has little faith in his constituents’ ability to resist retail store credit card come-ons (e.g., no interest for six months). He even appeared on MSNBC to warn a national audience about the innocent-looking retailers who entrap consumers at U.S. shopping malls. Yet the Congressman inadvertently negated the need for his own law’s enactment by having his staff survey 35 major New York City retail store websites to gather their credit card interest rates, grace periods and introductory rates, which are also known as teaser deals. His office then compared this information to the interest rates charged by major credit card issuers. Doing your homework is easier than passing a bill.

The results will come as little surprise to those who closely read their credit card statements, and I believe the overwhelming majority of Americans do, if for no other reason than to monitor their spouse’s spending habits. The average retail store credit card interest rate at the surveyed stores stood at 23.8 percent whereas the average annual percentage rate for a major credit card was 14.8 percent. The five stores found to be charging the highest credit card interest rates were Radio Shack (29 percent), Best Buy (28 percent), Staples (28 percent), Home Depot (26 percent), and Sears (25 percent).

Hey, how do you think these companies ended up being the home to the NBA’s Los Angeles Lakers (Staples Center) or having their co-founders buy the NFL’s Atlanta Falcons (Home Depot)?

Mike Barry, a corporate communications consultant, has worked in government and journalism. Email: MFBARRY@optonline.net