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Credit Card Companies Issue $11.7 Billion in Penalties in 2003
By Mitchell Pacelle
The Wall Street Journal

Card users, consumer advocates and some industry experts complain that banks are attempting to squeeze more and more revenue from consumers struggling to make ends meet. Instead of cutting these people off as bad credit risks, banks are letting them spend — and then hitting them with larger penalties for running up their credit, going over their credit limits, paying late and getting cash advances.

“People think they are being swindled,” says industry consultant Duncan MacDonald, formerly a lawyer for the credit-card division of Citigroup Inc., a consulting group that tracks the card industry, says credit-card fees, including those from retailers, rose to 33.4 percent of total credit-card revenue in 2003. That was up from 27.9 percent in 2000 and just 16.1 percent in 1996.

The average monthly late fee hit $32.01 in May, up from $30.29 a year earlier and $13.30 in May 1996, the company said. In 2003, the credit-card industry reaped $11.7 billion from penalty fees, up 9 percent from $10.7 billion a year earlier, according to Robert Hammer, an industry consultant.

Senior Citizens Sink Under Cost of Living
By Eileen Alt Powell
The Associated Press
Stuart D. Zimring, president of the National Academy of Elder Law Attorneys, said he’s seeing more older couples who get into financial problems because “cash flow is not keeping pace with the cost of living, particularly the cost of health care.”

A study by Harvard University’s Consumer Bankruptcy Project found that the actual number of seniors filing for bankruptcy is still quite small. In 2001, just 82,207 bankruptcy petitioners – or 4.6 percent of the total 1.8 million – were 65 and older, the study found.

Still, it was the fastest-growing group, the Harvard study said.