Credit Card Companies

I just got this letter from my credit card company:

Dear So and So:

We are making changes to your account terms.

To continue to provide our customers with access to credit, we have had to adjust our pricing. The terms of your account will be changing. These changes include an increase in the variable APR for purchases to 29.99% and will take effect November 30, 2009. As always, you have the right to opt out and pay down your balance under your current terms. If you opt out, you may use your account under the current terms until the end of your current membership year or the expiration date on your card, whichever is later. At that time, we will close your account.

[Note I scanned in the text using my newly found OCR ability!]

I'm sorry dear free-market readers, but this is wrong. Thirty percent interest? The fine print says the rate is the US Prime Rate plus 26.74% In other words, the Prime Rate is 3.25%. So they are going to charge over 9 times the Prime Rate. It's absurd.

Credit card companies make money by getting people on the hook and then charging them outrageous interest. This trap used to be called loan-sharking or usury. I am generally a pretty free-market supporter. But there are limits and these people cross it. They give out easy credit to people who shouldn't be given it, then expect the government to act as their enforcer.