In recent weeks, youe heard plenty about the sleazy side of the subprime mortgage business. Rising numbers of borrowers are losing their homes after being lured into highost mortgages they couldn afford. But there another piece of the painful subprime story that hasn hit the headlines yet: costly—sometimes abusive—subprime credit cards. Theye bleeding millions of borrowers who didn know what they were getting into.
Subprimes come in two types: Cards that are crazily costly to begin with and cards that look good but hide big traps. You know about traps if youe paid some bills late and are now being charged with interest at 30 percent. In general, here how the business works:
The bottomeeding cards—for people with damaged credit—offer you a decent interest rate on credit lines “up to” $3,000. When the card arrives, however, your line might be only $250. And then come the fees! “Program” fees. Account setp fees. Participation fees. Annual fees. Theye charged to your tiny credit line, leaving you almost nothing to spend.
Two betternown card issuers with a big subprime business are Capital One and HSBC Orchard Bank. They charge lower upfront fees than other cards do. But if you fall behind, it tough. Cap One penalty rate is currently 28.15 percent. Orchard Bank doesn disclose its penalty rate online and wouldn tell me what it is (that didn engender confidence!). Cap One has a reputation for issuing multiple cards to people who bump up against their credit limits. That gives them two cards, with two low limits, to overspend.
Lenders have figured out many ways of extracting fees. There “universal default”, where a late payment on one card can trigger high penalty rates on every card you own. There the “endless late fee”, where your payments never catch up with the new penalties youe charged. There “twoycle billing”—too complicated to explain here, but which amounts to charging interest on balances that youe already paid. And “retroactive price hikes,” where banks impose higher rates on old balances as well as new ones. “What other business can get away with raising the price of something you already purchased?” says Travis Plunkett of the Consumer Federation of America.
These practices startle consumers who think such high fees and interest rates must be against the law. But the Supreme Court effectively deregulated credit card rates 30 years ago, and 10 years ago it deregulated the size of the fees a bank could charge. Prior to fee deregulation, late fees hovered between $13 and $15, says Robert McKinley of CardWeb.com, which tracks the business. Now they run from $30 to $40. “It out of control,” he says. “Banks know theye pushed this too far.”
This year, however, the new Congress started holding hearings. Suddenly Citi dropped universal default and JPMorgan Chase ended twoycle billing. But those are just gestures. Without fee caps or usury laws, wee in the bankershands.
［真题例句］ Railroads typically charge (v.①) such “captive” shippers 20 to 30 percent more than they do when another railroad is competing for the business.［2003年阅读3］
［例句精译］ 通常，铁路公司对这些“被控”客户的收费要比有另一铁路公司竞争业务时多20%～30%。
［真题例句］ Now he is suing the casino,charging (v.②) that it should have refused his patronage because it knew he was addicted.［2006年新题型］
［例句精译］ 现在他正在起诉这个娱乐场，起诉它应该拒绝自己进入并参与赌博，因为它知道他已经上瘾了。
［真题例句］ (48) I have excluded him because, while his accomplishments may contribute to the solution of moral problems, he has not been charged (v.④) with the task of approaching any but the factual aspects of those problems. ［2006年翻译］
［真题例句］ In a significant (32：tightening) of legal controls over the press, Lord Irvine, the Lord Chancellor, will introduce a (33：draft) bill that will propose making payments to witnesses (34：illegal) and will strictly control the amount of (35：publicity) that can be given to a case (36：before) a trial begins.［2001年完形］