U.S. Senate Investigates Credit Card Abuse

Impartial Expertise on Effects for Consumers, How to Manage Credit Cards

SAN MATEO, Calif., March 12, 2007 - Bradford Stroh, founder and co-CEO of the free online consumer portal Bills.com, is available to comment on credit card companies' abusive practices currently under investigation -- and threatened legislation -- in the U.S. Senate. "Credit cards are becoming increasingly dangerous for consumers who are not extremely vigilant," Stroh said. "The Senate hearings are a first step to addressing this issue, but consumers can take action to protect their finances and credit ratings." Stroh can discuss the implications for consumers of the hearings and credit card practices, including:

  1. The importance of using credit cards wisely. To manage personal business, most people need to own at least one credit card. Additional cards should be unnecessary for those living within their means.
  2. The importance of paying cards off in full each month, on time. Many credit card companies charge "universal default" interest rates -- meaning they raise a consumer's interest rate after a late payment on a different card. (Citigroup reported it would eliminate this policy as the hearings approached.) Payment in full should eliminate interest charges and headaches.
  3. The importance of understanding the "fine print." "Consumers who must pay debt off over time absolutely must read the card agreement," Stroh said. Some companies change payment due dates from month to month, catching many customers off guard -- and resulting in late fees and rate increases. Cardholders must understand interest rates on purchases and transfers, late and over-limit fees, penalty interest rates and universal default clauses.
  4. Consumers' rights. Consumers do have rights when it comes to credit cards. Companies must inform customers when they will raise interest rates or change policies. "Read the fine-printed fliers that come with your statement, and opt out of disagreeable policies," Stroh advised. Opting out sometimes means consumers must close the account, but they then have the right to pay off the balance (if any) under the old terms.
  5. Options for serious debt. For those overwhelmed by debt, non-bankruptcy options exist. Stroh can address options remaining in the wake of 2005's bankruptcy reform legislation including credit counseling, creditor negotiation and debt resolution.

Before founding Bills.com and its sister company, Freedom Financial Network LLC, Stroh spent several years in the finance and investment industries. He held the positions of vice president for CIVC Partners in Chicago, and associate with Doll Capital Management in Palo Alto and TA Associates in Boston. He has served as a business development specialist for Trigo Technologies, Inc. (Palo Alto), and consultant with Coopers & Lybrand Consulting (Chicago). He holds an MBA degree from Stanford University and a Bachelor of Arts degree from Amherst College. Based in San Mateo, Calif., Bills.com is a free one-stop online portal where consumers can educate themselves about complex personal finance issues and save money by choosing the best-value products and services. Since 2002, Bills.com and its partner company, Freedom Financial Network, have served more than 10,000 customers nationwide while managing more than $350 million in consumer debt. The company's co-founders and CEOs, Andrew Housser and Brad Stroh, were named Northern California finalists in Ernst & Young's 2006 Entrepreneur of the Year Awards.