Dear FRONTLINE,

I am a Certified Credit Counselor and have been for the past 7 years. I was in banking for 18 years prior. A few things continue to bother me on this issue.

I see a large amount of what I call irresponsible lending. Ex: We have many seniors in this area (widows) with income of $600- $800 mo in social security receiving credit limits of $10,000 - $20,000 from credit card companies. These consumers have an illness and use there card to pay doctors or prescriptions and over time use that balance and can't pay. How can these companies justify these high limits on such low monthly income?

Next I have many clients who do get behind in there bills and are charged large late fees and then overlimit fees and interest rate is doubled.

All this makes it very hard for them to recover. There should be something in place to stop these after a certain number of months if the consumers are attempting to repay. Several clients

I have start with $300 balance then can't pay one month and the

fees start and they end up with a collection for $2000 to $3000.

How can this be fair & resonable in anyone's eyes?

Lastly, I have asked this question from several area's and all 3 credit bureau's and still have not received an upfront answer.

Maybe you would have better luck.

I want to know what is the criteria a company or individual has to show or present to a credit bureau to place an item on an individuals credit report.

To prove it is valid in the first place. I have seen many horrible things placed on clients credit reports that have no

proof whatsoever. How does this happen. If these reports and there scores carry so much weight then the standards for what is put on them should be better monitored.

christine dunbar
Port Charlotte, Florida

Dear FRONTLINE,

I am disappointed in Frontline's coverage of credit card companies. It's wonderful that these issues are discussed, but you did not empower the viewers to take action when credit card companies employ illegal, unethical or immoral means to increase a customer's debt. It is also important to emphasize the proper and responsible use of credit cards.

There are common means by which consumers can contest charges. Credit reporting agencies can be required to correct incorrect credit information added by unscrupulous lenders, and, when the right techniques are used, credit card companies can often be convinced to "wave" fees and penalties and lower interest rates.

While it is important to recognize the problem, viewers should not resign themselves to victimization by immoral credit card companies. They should find out what they can do about the problem on a personal and national level.

Mirek Bujnovsky
Houston, Texas

Dear FRONTLINE,

Thank you for your very timely broadcast on credit cards. I'm currently getting from under a pile of credit card debt that started while I was handed my first credit card in college. I'm now 34 years old and think I have finally learned to delay gratification. I strongly dislike credit card companies and regret that given the limitations imposed by not carrying one, I will have to keep at least one.

May I suggest a program investigating the student loan industry. I felt more uninformed about my student loan debt than I did about credit cards. I consolidated my student loans in 1998 (when rates were high) in order to manage my payment. Currently regulations do not allow consolidated loans to be refinanced--so I am now paying a fixed 8.25% on $106,000. The interest that I am not able to pay has been addeded to my principal and my debt continues to grow. I understand that there are efforts in the House to allow student loans to be refinanced much like home mortgages are, but the banking industry is lobbying strongly against it.

Given my modest salary as a social worker being able to refinance this debt means the different between being able to save for retirement or not.

Boston, MA

Dear FRONTLINE,

I found this program very interesting, but it missed one point. Contracts are one-sided, and you must agree to its terms to use the product. This is true in many areas, not just credit cards (software quickly comes to mind). If you don't agree to the terms, you can't have the credit card, which has become irreplaceable in today's economy. This is the other reason I believe people don't read the contract (besides its complexity). Reading it is pointless--if you don't accept, you can't use the card. There is no other alternative if you plan to use credit. So use it wisely.

One other note-- I've heard of instances where consumers have successfully defended a change in the terms of contracts by sending in a revised contract with their payment. Part of the contract reads that by cashing the payment check, the company accepts the terms of the amended contract. I wonder if anyone has tried this with the credit card issuers?

Mark Harris
Alexander City, AL

Dear FRONTLINE,

The show was good as far as it went in describing what credit card companies do to promote their businesses' bottom line. But the point that the show missed is how close to the edge so many people are living. There's enough there for another show.

Periodically, all credit card holders receive the "agreements." They explain the changes that are going to be made on the effective date of the agreement. They also say that if you refuse to accept the changes, you can notify the company that you do not accept the changes and they will cancel the card for you and let you pay off the balance under your old agreement.

But living so close to the edge, most people presumably cannot do that. That's the rub, and that's where people can be accused of not taking personal responsibility for their financial lives. I have experienced the feeling that "I'll get caught up when I get a raise," or "when I sell my extra car," or whatever. I think the American dream of winning the lottery or having a wealthy aunt die also plays into some people's "thinking."

I guess the subject for another show could be on "Good and Bad Credit Counselors."

Punta Gorda, Florida

Dear FRONTLINE,

I found your propgram about credit cards very thought porvoking and made sure my whole family watched it, especially my two teenage daughters who are just beginning to use savings and checking accounts.

I don't fault the credit card industry for making a profit within the law. credit cards a great convenience and I would hate to go back to having to carry around a lot of cash.

People need to exercise more restraint, be responsibile for their actions, and not claim to be victimized at every turn.

Parents and schools need to a better job of educating young people about value of thrift and savings, and how to avoid the potential pitfalls of the perils of credit card misuse.

I'm glad you provided a balanced perspective by including a "dead beat" who uses credit cards responsibly, pays off his balance at the end of the month, and thereby avoids the high charges and fees everyone else is complaining about.

Nicholas G. Siegl

Lemoyne, PA

Nicholas Siegl
Lemoyne, pennsylvania

Dear FRONTLINE,

I really enjoyed your program on credit cards. It was a very balanced presentation of many different viewpoints.The interviewer on the program did a great job in revealing the pertinent information and then allowing the audience to draw their own conclusions.

I really apppreciate this high level of discussion. The creators of the program did not appear to have a predisposed position to advance. Great job.

John Dunlap
Dallas, Tx

Dear FRONTLINE,

Everyone is quick to talk down upon credit card companies, but I feel obligated to defend them. I do not work for a credit card company, and have nothing to gain from posting this.

I am a middle class American as well, and was told the dangers of credit cards in high school as well as by my parents growing up. Still when I turned 18 I got my first credit card with a 500 dollar limit. I am now being rewarded with lower interest rates due to my outstanding credit history. I am able to get auto loan payments at a much cheaper rate along with many other benefits. I am a providian card holder currently paying 25% interest. Yes that is outrageous, but I have a 4000 dollar limit on that card and recently my truck needed 2000 dollars in repairs. Since I am a middle class American I often live paycheck to paycheck, and without the help of Providian I would be traveling miles to work on a biycle.

So before everyone is so quick to destroy a credit card companies reputation I think people need to sit back, and realize how a credit card can help in many situations. Just remember at some point in time you had the oppurtunity to say "no" to getting that credit card...but you said "yes"....it is your fault not the credit card companies fault. They provide a service, and unless you live in a hole you should be fully aware of what the services entail as well as the risks.

Chester Johnson
Nederland, Texas

Dear FRONTLINE,

I got really tired of the word "unfair" to describe an industry that is willing to take on nearly anyone as a credit risk before they have established a credit history. What really got my blood pressure going was the unemployed couple who kept buying stuff until they were $80,000 in debt. What were they thinkin? Was Visa suppose to look the other way?

Is it MasterCard's fault that people don't read their credit card agreement?

I wonder how many of your panel of "victims" buy stuff they "have to have".

I have a Discover card and an AT&T Master-card. I pay off my balance each month like Ben Stein and have payed no interest for over 18 years. I made one partial payment shortly after I got my first credit card and the interest charge worked out to about 25%. I did not feel that it was unfair since that is what my credt card agreement said would happen. I did learn from that event and have had great experiences with my credit cards since then.

Thomas W. Rowley
Grand Rapids, Michigan

Dear FRONTLINE,

Tnanks for an enlightening program on the credit card industry.

I am on a treadmill with several credit cards and have balances adding up to approximately $15,000. The interest, penalties and late fee's are eating me alive. I have several "1 day late" issues and have had my interest rate increased due to being just one day late.

Citibank raised me on one card recently because another card I had that was AT&T( which is owned by Citi) was late. My middle class income is greatly affected and it puts you in a "peter to pay paul syndrome" which makes matters worse. Borrowing from one card to pay the other. I had times where I had to take a cash advance from the same card to pay its minimum due on the statement to avoid high penalties and interest increases.

I am trying to reduce the amounts but find it very difficult and without a low home mortgage rate loan or other means I cannot find a way to repay down the debt.

The only part of information the show could have made were several of the "non-profit agencies" (ie) Greenpath that supposedly assist in getting the interest lower and working out a payment schedule. I am cautious about entering these programs

without some degree of confidence that they really work.

Looking over credit reports right now and I do have a serious

situation which I must address but as fast as I run the treadmill

goes faster and its really tough to keep up or stop running.

howad berger
new york, ny

Dear FRONTLINE,

As a result of your documentary, I am actually using the credit card company's return envelopes to tell them something. I never thought of that before.

geoff hilton
columbus, ohio

Dear FRONTLINE,

Some practices I discovered last year when applying for a new mortgage to refinance my house:

1. Some mortgage brokers charge a "rapid re-score fee" to consumers when they had a bad credit score due to inaccurate information on their credit reports and were successful in getting this information removed. These mortgage brokers will try to charge between $25 to $60 per instance on the consumer's credit report. The credit reporting agencies only charge about $1.50 per credit report to re-score for the mortgage broker. (I got this information directly from a representative of Fair Isaac and from a CEO of one of the major credit reporting agencies.)

2. Several old and invalid debts had resurfaced on my credit reports. One of these was over 10 years old but appeared on my credit report as a new debt! In each case, thankfully, I still had the paperwork to prove the debts invalid. This is a process I've had to do two or three times over the course of seven or eight years.

It turned out the debts appeared as new debts on my credit reports because they were "recycled" by credit collection agencies. After you prove to a collection agency that a debt is invalid, they can sell it to another collection agency, then you have to go through the process all over again six months or a year later with this new collection agency.

One invalid debt showed up on my credit reports with seven different credit collection agencies. (The Fair Isaac scoring is negatively skewed in this scenario.) What I didn't know was even though that particular credit collection agency stopped trying to collect once I proved the debt was invalid it didn't come off my credit reports. It came off my reports only after I disputed the debt with the credit reporting agencies and waited the 30-days for the collection agency to respond to my dispute, which they didn't. However, if the debt gets sold again, it will show up on my credit report all over again. Lots of fun, isn't it?

My mortgage broker (one I found that didn't charge fees for rapid re-scoring) told me that this was happening to a lot of her clients. I was furious and started calling State consumer protection agencies and my State representatives. They agreed this is a common practice effecting consumers, but said there are currently no laws to prevent collection agencies for re-selling debts like this.

Collection agencies pay the original creditor part of the debt to "own" it so they can collect. If the original debt was $200, they might pay $100 for it. When they find out it's not valid, they're out the $100. So to get their cost back, they include the debt in a lot of debts they resell to another collection agency. And the cycle goes on. And we pay for it... This practice cost me a couple % points in my mortgage interest rate.

After nearly three months of dealing with the credit industry I literally had to scream to reduce the stress. It's insane that we have given this industry so much control over our lives, with so little accountability. They are making tons of money at our expense and they use that money to "buy" government sanction for their unfair practices.

It won't get better until we demand our government representatives pass laws to better regulate the credit industry at all levels to protect consumers.

Denise Subramaniam
Beaverton, Oregon

Dear FRONTLINE,

Cell phone wireless services, equipment and accesories are an extension of the credit industry crafted to hook people into a continuing use of difficult to understand tiers of charges.

I wonder if Frontline could ferret out an way to explain how that facet works.

don warner saklad
Cambridge, MA

Dear FRONTLINE,

Fascinating program on credit cards! My husband and I have never had one (only debit cards).

Given how loathe most people are to pay income taxes, it seems funny that so many are willing to pay a bank what amounts to a monthly income tax forever!

I would postulate that many of these folks are paying more in this credit card "tax" (interest and fees) annually than they are paying in taxes to the government.

It looks like the credit card companies can even charge more in late penalties and interest than the IRS!

cedar park, texas

Dear FRONTLINE,

I worked for many years at Providian (in the IT department -- NOT on the business side), and I had a chance to view some of our more interesting marketing and business practices.

During the boom years (the 1990's), many of my colleagues and I believed that the business side was completely out of control. We were delighted when the District Attorneys finally reined the business in (particularly the much-loathed marketing department).

In the company's defense, I have met several customers who were very loyal to Providian, including a young Australian who could not get a credit card elsewhere, not due to bad credit, but due to not having a credit history in the U.S. Also, I can genuinely say that few events put management in quite the same tizzy as an OCC Audit (and we seemed to have quite a few of them). Few phrases could more effectively break a political logjam than, "That's not in compliance with OCC standards" (although strangely enough, Marketing always seemed to weasel its way around that).

Having said this, much of what the OCC required was written procedures. We would provide reams of paper in beautifully labeled, six-inch binders, and bury the auditors in them. Personally, I was not always convinced that what was written was an accurate reflection of what was going on, particularly during the '90's, when we were growing so fast that any documentation was quickly outdated (assuming, of course, that any was written). This is one of many reasons why any District Attorney who wants to inquire about a credit card company gets 100% of my support.

Fremont, CA