Credit card debt has arised, particularly among young people. Since the late 1990s, lawmakers, consumer advocacy groups, college officials and other higher education affiliates have become increasingly concerned about the rising use of credit cards among college students. Student Credit Cards or Travel Rewards Credit Card become more and more popular.
The major credit card companies have been accused of targeting a younger audience, in particular college students, many of whom are already in debt with college tuition fees and college loans and who obviously are less experienced at managing their own finances.
The nonprofit group “Americans for Fairness in Lending” works to educate Americans about credit card abuse and being careful to Credit Card Offers.
Another controversial area is the universal default feature of many North American credit card contracts. When a cardholder is late paying a particular credit card issuer, that card`s interest rate can be raised, often considerably.
With universal default, a customer`s other credit cards, for which the client may be current on payments, may also have their rates and/or credit limit changed. This universal default feature allows creditors to periodically check cardholders` credit portfolios to view trade, allowing these other institutions to decrease the credit limit and/or increase amounts on cardholders who may be late with another credit card issuer.
The fact that credit card companies can change the interest rate on debts that were incurred when a different rate of interest was in place is similar to adjustable rate mortgages where terms of a contract are changed after the contract has been formed (i.e. after the transaction is completed and the debt incurred).