Illegal credit card practices

Credit card companies are so big and powerful they get away with a lot of things both legally and illegally.  They make certain things possible with their army of lobbyists.  If they can't get it passed that way, they tend to do it anyways hoping not to get caught.

Every once in a while they do slip up and have to pay penalties.  This article below explains how visa, mastercard and American express have settled up or are being sued.


WASHINGTON (AP) -- The Justice Department on Monday sued credit card company American Express for alleged anticompetitive practices while proposing a settlement with the two biggest credit card companies, MasterCard and Visa.

In papers filed in federal court in Brooklyn, the department and various state attorneys general sued all three companies, saying they were attempting to insulate themselves from competition.

At the same time, the Justice Department filed a proposed settlement with Visa and MasterCard.

"We want to put more money in consumers' pockets, and by eliminating credit card companies' anticompetitive rule, we will accomplish that," Attorney General Eric Holder said in remarks prepared for an afternoon news conference.

The lawsuit says the card companies are impeding merchants from promoting the use of competing credit or charge cards with lower acceptance fees.

Each time consumers use a credit card to make a purchase, the merchant must pay a fee. Such fees brought in $35 billion last year to the three credit card companies and their affiliated banks.

Under the proposed settlement, Visa and MasterCard agree not to prohibit merchants from offering customers discounts or rebates for using a particular kind of card.

Credit card videos

There is a ton of information about credit cards on the internet. It is sometimes difficult to read and understand the terms of agreement that come with credit cards. Most of them are basic and are intended to protect the credit card companies.

The credit card agreement is a contract that allows the credit card issuers to charge off the account (write off the credit card debt) for non payment, transfer or sell the card to another bank or card issuer, change the terms and conditions, as well as sue you for default or breach of contract.

The video below helps explain financial terms to help you understand better how your credit cards and other loan products work.

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