EU-DIGEST - special edition

"The super-large banks and investment banks from one end of our country to the other are being rescued by the Federal Reserve Bank. If the rescue operation had not taken place, many of our largest banks would have failed. We were forced to help the banks for two reasons. Number one, they are not allowed to go bankrupt because they are "too big to fail." This means that the effect of their failure would be devastating to the economy and therefore the whole country, even to the point of a depression deeper than the 1930s.

What all of this double-speak means is that we taxpayers are covering the gambling losses of the giant banks and also the companies that insured them.

However, currently we are facing a problem with our credit cards that could be as big as the sub-prime mortgage problem. The large banks are raising the interest rates on our credit cards - just because they want to. They want to raise rates because their profits have been reduced by their losses on sub-prime mortgages.

The banks have a whole list of ways to scam us on our credit cards. They can charge several different rates. For example, one rate is for cash or cash-like purchases. A second rate can be charged for transfers from another card and then a third rate for regular purchases. Multiple interest rates make it very difficult for card owners to keep track of their rates. Then, of course, if we are late, even once, there are special fees and charges. Some credit card companies are even raising our rates if we are late paying someone else, our electric bill for example.

Credit card companies have dozens of reasons, I should call them excuses, for raising our interest rates. I have read that these large banks have formulas for their computers to automatically raise rates when they can determine that a family is trapped in a debt too large to handle.

Some of these large banks are as bad as loan sharks. When the banks' computers detect that a consumer is near the maximum on his card and is only making the minimum payment, the rates are raised. Why would credit card companies push someone who is already in trouble into deeper trouble? Because they can.

These large banks are now protecting themselves just like they did with the sub-prime mortgage fiasco. They are transferring their risk on bad credit card loans to insurance companies. We could very easily find ourselves in another national financial crisis. And this crisis would be handed to the taxpayers, just like the mortgage crisis was.

However, the gigantic banks that control most of our banking systems are only interested in short-term profits and are working against the long-term health of our economy."

For the complete report from the People Defender click on this link