Credit Card Practices

This is a print on demand edition of a hard to find publication. Contents: (1) Intro.; (2) The Truth in Lending Act and Protections for Credit Card Accounts; (3) The Small Bus. Credit Card (SBCC) Market; (4) SBCC Programs: Characteristics of SBCC Programs; Marketing SBCC; Features of SBCC; Underwriting SBCC; Interest Rates and Fees Associated with SBCC; Mgmt. of SBCC Accounts; The Costs and Profitability of SBCC Programs; (5) Credit Card Use among SB: Trends in SBCC Use and Credit Card Borrowing, 1998¿2009; Characteristics of SB That Use Credit Cards; Intensity of SBCC Use and Borrowing: Low versus High Credit Score Firms; (6) SBCC Access, Terms, and Conditions; (7) Disclosures of Terms, Fees, and Other Expenses, and Protections against Unfair or Deceptive Acts or Practices.

In 1986, credit card balances amounted to about $5 billion, and it is estimated that in 1987 approximately 64% of Canadian consumers possessed at least one credit card. However, there are very few terms and conditions in the pricing of credit cards, making it difficult for the average consumer to understand the costs associated with their use. This paper studies aspects of the credit card industry: partial payments, variations in interest rates, variation in method of interest calculation, the cost of credit card services from financial institutions, retail stores and gasoline credit cards, and travel cards. Discusses provision of information, changes to industry practices and recommends a method of interest calculation. Includes April 1988 pricing features of selected cards.