Credit Card Action Center

Credit Card Debt: Where does your state rank?
Common Credit Card Tricks and Traps
Take action! Tell the Federal Reserve Board your credit card story
Pending Legislation: The Credit Cardholders’ Bill of Rights

Credit Card Debt: Where does your state rank?
(July 29, 2008) What is the median amount of credit card debt per borrower in your state? Find out below!

This table shows the median amount of revolving debt per borrower in each state as of 2006. Revolving debt is largely comprised of credit card debt (95%), and also includes private label cards and lines of credit. Our Partner CFED acquired the data from TransUnion, a credit reporting agency, as part of their Assets and Opportunities Score Cards.


New Hampshire
New Jersey
Rhode Island
North Carolina
New York
District of Columbia
New Mexico
South Carolina
South Dakota
North Dakota
West Virginia
Watch Out For These Common Credit Card Tricks and Traps
PDF Version of the Tricks and Traps

(July 11, 2008) Credit card contracts are packed with fine print tricks and traps to increase the likelihood of paying fees nd penalties. You will be hard pressed to find a credit card without these terms – at least until our government outlaws them – but if you’re informed and cautious, you have a better chance of steering clear of the traps and saving money.

Fees and More Fees – On any given month, you might pay a late payment fee, overlimit fee, cash advance fee, balance transfer fee, foreign exchange fee, bill payment fee, Western Union fee, and whatever else your lender can devise. Not to mention monthly and annual fees.

Tricks to Make You Pay Late – These come in many varieties. If you’re late you’ll pay a hefty fee and your interest rate may go up. Check each statement carefully and pay your bill as soon as it arrives.

Changing Due Dates – Your bill will not be due on the same day every month.

Early Due Dates – Bills may be due just a few days after you receive them.

Weekend Due Dates – If your due date is on the weekend and your payment arrives on the date, it won’t be processed until Monday and you’ll be considered late.

Morning Due Times –Your payment may be due at 9am on the due date, not 5pm.

Approved Overlimit Charges – If a purchase puts you over your limit, your credit card company will approve the charge then hit you with an overlimit fee and maybe even raise your interest rate. Keep careful track of your balance and know that even approved charges may put you overlimit.

Universal Default – Pay Card A on time but pay late to Card B (or anything else monitored by your credit score) and your interest rate on Card A may jump!

“Any Time For Any Reason” Changes – Most contracts include this ominous phrase. It means just what it says – they can increase your interest rate on a whim.

Teaser Rates That Don’t Stick – An introductory 0% interest rate can jump to 30% with a late payment or if you go overlimit. Don’t bank on keeping that 0% rate for the entire promotional period.

Retroactive Application of Higher Interest Rates – To make things worse, if your interest rate increases, they can apply the higher interest rate to the entire existing balance, not just to new charges.

Allocation of Payments – If you end up with two or more different interest rates, they will apply your payments to the balance with the lower interest rate first. The rest of your balance will continue to generate high interest charges until the low-rate balance is entirely paid off.

Tricky Interest Calculations – For some cards, you can pay interest on purchases from previous cycles. This is known as double cycle billing. Look for a card that uses the “Average Daily Balance” interest calculation method.

Credit “Protection” – Services like this may sound good, but they’re usually useless. The fee for the service likely exceeds the minimum payments it would cover if you became sick or lost your job. Avoid add-on products like this.

Binding Mandatory Arbitration (BMA) – This provision requires that you resolve any conflict with an arbitrator selected by the lender, which means you give up your right to take the credit card company to court.

Finally! Banking Regulators Propose Ending Unfair and Abusive Credit Card Practices
(May 21, 2008) The Federal Reserve Board and two other federal banking agencies have released a proposed rule that aims to reform some of the most unfair credit card tricks. But this important new rule of fair play is just a proposal. The banks are fighting hard to weaken the rule before it becomes final. Don’t let the banks win! Read more about the proposal below, and tell the Federal Reserve Board your opinion or a horror story about your credit card company’s practices!

Have you received your credit card bill, only to realize that that it was due so soon that you have to pay it right away?

Do you think it’s unfair when your credit card company suddenly decides to apply a new, higher interest rate to an old balance? Has your credit card company raised the rate on money you’ve already borrowed for no reason or for a flimsy reason?

Putting your personal story into the Federal Reserve Board’s comment process can help to ensure that this rule is adopted, and that the Fed hears about all types of unfair credit card practices.

Tell the Fed about your experiences. Just fill out the form below to send an e-mail to the Federal Reserve Board sharing your opinion or experience with unfair credit card practices.

The comments you submit will be made available to the public on its website, so don’t include your account number. You can also leave out your street address if you prefer, though you should include your city.

To [email protected]
Subject Docket No. R-1314
First Name
Last Name
Your E-mail Address



Zip Code

Your Message
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The proposed rule includes these important credit card reforms:

Gives you more time to pay. A payment can’t be treated as late for fees or negative credit reporting unless the bill was mailed or delivered to you at least 21 days before the due date. This helps end card companies’ ever-shrinking repayment periods.
Ends tricks that increase your finance charges. Card companies routinely require you to pay off low-interest balances (like transfer balances at teaser rates) before allowing you to touch higher-interest debt (like new purchases). That’s never in your best interest. The rule requires that your payments must be allocated to give you the full benefit of a discounted promotional rate.
Prohibits rate increases on your existing balance. Today, when a card company jacks up your interest rate, for whatever reason, it applies that rate hike to your current balance. Under the new rule, rate increases can be applied to your prior balance only if you have a variable rate card, your promotional rate expires or is lost, or you pay your bill more than 30 days late.
Eliminates hidden interest charges. Today, some card companies charge interest even on debt repaid during the grace period. The proposed rule would end that.
Read the full proposal here.

Other ways to submit comments:

By Fax to (202)452-3819 or (202) 452-3102. Identify your comment by including Docket No. R-1314 on the top of your letter.
By Regular Mail to Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Ave, NW, Washington DC 20551. Identify your comment by including Docket No. R-1314 on the top of your letter.
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