"Credit card offers that lure in consumers and then hit them with surprise charges are against the law," said CFPB Director
The bulletin is available at: http://files.consumerfinance.gov/f/201409_cfpb_bulletin_marketing-credit-card-promotional-apr-offers.pdf
The Bureau believes some companies' marketing materials do not clearly disclose that consumers must pay off the promotional balance by their due date to avoid racking up unexpected interest charges on routine purchases for which they were not charged interest previously. For some consumers, these surprise charges can make the cost of transferring a balance more expensive than revolving the same balance on their existing card.
These marketing tactics specifically impact consumers who enjoy an interest-free "grace period" on their credit card purchases. Consumers who pay off their total credit card balance each month receive a grace period during which they do not have to pay interest on purchases. When consumers carry their promotional credit card balance past their payment due date, they lose their grace period and are charged interest on all new purchases. The only way for these consumers to avoid interest charges on new purchases made with the credit card is to pay off their whole statement balance, including the promotional balance and the new purchases, by their monthly billing due date.
The Bureau's bulletin explains that issuers whose marketing materials fail to convey that promotional interest rate offers may cause consumers to lose the interest-free grace period and rack up unexpected fees risk engaging in deceptive and abusive marketing practices. In the bulletin, the
* Avoid the interest: Consumers that do not carry a balance can take advantage of promotional rates and avoid unexpected interest if they don't make new purchases with the card until they pay off the entire balance. To avoid interest charges on new purchases, these consumers should consider paying with cash, debit, or another credit card that doesn't have a balance.
* Make payments on time to avoid surprise charges: Consumers should be sure to make payments on time. For promotional and deferred-interest balances, consumers should pay off the entire balance before the end of the promotional period.
Compare the interest rates among credit cards. Consumers that carry a balance on all their credit cards should compare the interest rates among their cards to decide which is the best deal for new purchases. These consumers should also consider paying for new purchases with cash or debit.
* Go online at consumerfinance.gov/complaint
* Call the toll-free phone number at 1-855-411-
* Fax the
* Mail a letter to:
Additionally, through Ask CFPB (http://www.consumerfinance.gov/askcfpb/), consumers can get clear, unbiased answers to their questions about credit cards and other financial products and services at consumerfinance.gov/askcfpb or by calling 1-855-411-
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