Weiner Says Store Credit Cards Fleece Consumers
BY JOHN TOSCANO

Congressmember Anthony Weiner urged consumers to stay away from credit cards offered by retail store owners, advising them to use credit cards offered by banks instead because bank credit card rates are much lower.

Weiner (D- Queens/ Brooklyn) released results of a comprehensive new study done by his staff of credit cards offered by 36 major stores in New York City that found their average rate was 21.71 percent, eight percent higher than the average bank credit card.

In his release on the credit card analysis Weiner said, "The study showed that customers could save over $500 simply by knowing their options. The study reached a simple conclusion: If you plan to carry a balance beyond one month, look for no interest or low interest credit cards.

Weiner said, "Retailers promise big savings- but they're doling out big bills on customers. When it comes to store credit cards, shoppers should leave home without them."

The lawmaker also announced he had introduced legislation to increase point of purchase disclosure of interest rates, grace periods and annual fees for store credit cards.

Weiner said the study also outlined some of the "teaser" deals offered by the credit card issuers to entice customers to sign up. These included offers to pay no interest for varying numbers of months to help lure potential customers, Weiner said.

What the retailers hide in the fine print, Weiner said, is that if customers fail to pay the entire bill within the allotted time, the interest rate is applied retroactively on the initial purchase price- regardless of how much the individual has paid.

The "teaser" benefits are therefore offset by the higher interest payments and hidden fees, Weiner pointed out.

To compile the new data, Weiner said, his office contacted 32 major New York City retail stores, asking for interest rates charged on their store credit cards, flexibility with regard to the rates, and grace periods. Interest rates are normally applied as a finance charge at the end of each billing cycle, he said.

The highest rate charged, 23.99 percent, was offered by ABC Carpets; the lowest were 19.92 percent charged by Fortunoff and 19.80 percent, charged by Crate and Barrel.

Weiner's staff also contacted credit card companies and two banks. They found their interest rates ranged upward from 6.99 percent charged by Iberia Bank to 12.24 percent charged by American Express. Bank credit card rates averaged 13.42 percent, and some bank credit card rates were as low as 6.99 percent.