[ Monday ]
Advanta Bank Corp...Bait and Switch on CC Rates?
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With the media focused on the sub-prime housing debacle, consumers are experiencing interest rate jumps on their credit card accounts. Legislatures and Congress are investigating how these rate increases are affecting consumers and small businesses, especially in instances where zero or introductory rates suddenly jump to 20 or 30-plus percent APR. The worst violators were named by the FDIC based on the number of complaints, but the list was published in alphabetical order. At the top of the list was Advanta Bank Corp.
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It should come as no surprise for small business customers of Advanta, with the lure of low interest introductory rates, that Advanta appeared on the FDIC list. Advanta is one of the worst violators. Last year (2007), Advanta offered new credit card customers a rate of 0 percent APR for 12 months, and showed a regular purchase and cash advance rate of 7.9 percent on their statements. This, according to customers, gave the impression that with low rates still prevalent in 2008, any post-introductory rate would be at the 7.9 percent rate. Advanta, however, took advantage of its customers by raising the post-intro rate to as high as 34.99% APR, even though customers complained that all prior statements had been paid on time with at least the minimum payment due during each billing cycle.
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Advanta Bank Corp violated the trust of its good customers, forcing many to close their accounts with the company, but only after paying the 'usury' rates for the final billing period, and any other period prior to cancellation. For customers affected by this sudden jump in rates, we would advise them to contact the Comptroller of the Currency and file a complaint against Advanta (see the Bank of America article in an earlier post for the link). Customers may also want to contact their legislators and congressman, along with their state's Office of Consumer Affairs or similar department. Only through this exposure can pressure be placed on these predatory type of financial institutions.
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Ironically, Advanta is currently running an offer on their website which shows the 15-month introductory rate for Balance Transfers, along with a line stating that the post-intro rate will only be 7.99 percent. Good luck getting that one to stick...and be sure to read the fine print.
MM [15:35]
[ Tuesday ]
Oil Prices...A Regulatory Issue?
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Now that a spokesperson for OPEC has declared that the current value of a barrel of oil is only $70 USD, and industry economists have stated that there is no justification, demand or otherwise, for oil to be priced at more than a $55 to $80 range, one has to wonder how the current futures price reached the current level (around $135 to $140).
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The facts are clear: speculators have driven up the price, and firms such as Goldman Sachs operate in an unregulated market, outside of the SEC and other agencies, with regard to this issue. Just last week, a GS analyst suggested that the price of oil would hit $150 per barrel by July 1st, and the price that day jumped $11 per barrel in response to the suggestion. Does anyone believe that Goldman Sachs did not already have a futures position in advance of the announcement, thereby insuring a neat profit?
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While not a proponent of government regulation, this is more of a security issue as it deals with speculators rather than profiteering, similar to the silver market of the 1980's. However, where the silver market affected only a small portion of the economy, oil price speculation by these investment firms has created a worldwide economic problem. The ramifications include food shortages, increased healthcare costs, budget problems for municipalities affecting basic services, as well as inflationary trends in virtually ever sector of the economy. This may well be considered an insider trading issue, except that the penalty to the petroleum consumers of the world will be in the trillions of dollars. In the USA, perhaps emergency regulation of these speculators should be addressed by Congress, along with the appropriate penalties on windfall profits.
MM [11:07]
Hey Microsoft...What Were You Thinking?
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Vista is rubbish...and that word comes from a Microsoft Partner. How many years does it take to publish a buggy and bloated operating system? Apparently, five years of (Longhorn) development is not enough.
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While a pretty interface belies the BSOD and compatibility problems users are likely to encounter, Vista does have a few nice features. But are they enough to warrant upgrading from XP, or switching from Linux or Apple OS....not in your wildest dreams!
MM [08:45]
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