His posting here has potentially saved many other people much more than that, though...

Thanks. That was the main reason for posting our experience. In California, it's sad that credit card companies get away with predatory rate hikes and retroactive finance charges when individuals face usury charges for rates over the higher of 10% or 5% + prime:

http://ag.ca.gov/consumers/general/usury.php

I think it's much more damaging to allow massive rate hikes than high static rates. At least with high rates, we know enough to avoid them.

Most credit card companies are based out of Delaware because of its absence of aggressive usury laws. With no physical presence in California, California's laws are mostly inapplicable to the relationship between an interstate card issuer and you.

Fundamentally though, anyone who supports free markets and the idea that you are capable of (or at least responsible for) managing you own life better than some state or federal regulator should see usury laws as an unnecessary and unwelcome invasion on the freedom of contract.

When you or I sign up for a credit card, we freely enter into a contract with the issuer that has certain terms, which may include the lender's right to increase the rate of interest at any time. If that term isn't acceptable to us, then there is nothing that forces us to accept the agreement. And no regulator is necessary to prevent the issuer from offering us those terms. We can simply walk away. No one is holding a gun to our head and making us take the credit card.

As as aside: if you think the terms for consumer credit cards are bad, you've never read and signed a merchant agreement! Those are fearsome. ;)

"When you or I sign up for a credit card, we freely enter into a contract with the issuer that has certain terms, which may include the lender's right to increase the rate of interest at any time. If that term isn't acceptable to us, then there is nothing that forces us to accept the agreement."

People have to rely on reputation more than the actual terms, because the terms are nearly meaningless. If the card company chooses to violate the terms, it's not going to be worth your while to fight, as you note several posts above. In practice, this means they can get away with such things until it becomes common knowledge and people stop using them. Advertising duplicity is the only real check on such practices we have.

You are correct that individually it often doesn't make financial sense to litigate and attempt to recoup small loses, even if due to outright fraud (that is, 'violating the terms'). But often enough outright fraud will come back on the wrong-doer not just with lost customers, revenue, and reputation, but also with a devastating class action.

My larger point here is that outright fraud is relatively uncommon. In most cases of alleged 'predatory' business practices (such as the original post), the company is acting well within the clearly stated policies that the customer accepted in advance.

I hasten to add that having the right to do a thing does not necessarily make exercising that right wise or prudent.

Ikea, for example, would clearly be well within their rights to charge more for umbrellas on rainy days than on dry ones. But in fact, they do just the opposite - they charge substantially _less_ for umbrellas on rainy days. That endears them to their customers.

Similarly, I have a friend who loves Capital One. He fell behind on payments to all of his credit cards, and whereas some creditors had phone banks in India calling his house 11 times a day, Capital One was apparently quite civil. They made a polite courtesy phone call, then basically left him alone. Each of his statements contained a polite letter that offered to reactivate his card if he could make a minimum payment. And they did _not_ jack up his interest rate, even though they had every right to do so.

Morality (as opposed to law) is about more than not infringing on the rights of others. And virtuous action that is imposed by force ceases to be virtuous, as it is not freely chosen. Corporations don't exist in any meaningful sense - only the individuals that invest in and run them do. So these truths of ethics are as applicable for companies as for individuals.

Free of regulation, markets will choose the firms that provide the highest value to customers. Virtue and honesty are components of that value - though customers are free to weigh those against their other desires, such as a lower price. And in the age of the Internet, no company can hide duplicity for very long.

All too often, regulation provides incumbents protection against the upstart competitors and tort liability that make free markets work.

I believe in freedom of contract, but I also believe in fair business practices. Credit card companies have a lot of incentive to craft agreements that look OK on the surface but are littered with land mines. They are the ones that craft the (not) clearly stated policies, and I suspect they've tuned the agreements to maximize profits from slip-ups and timing.

Case in point: sending APR change notices, setting effective APR change dates, and requiring written responses all within one billing cycle. It's not obvious that a line in the original agreement leads to retroactive billing at arbitrary APR if a written response wasn't received. The written response requirement was only mentioned in small print at the end of a large amended agreement.

You said "Free of regulation, markets will choose the firms that provide the highest value to customers."

That may be true of efficient markets, but I don't think there's nearly enough transparency in the credit card market.

I'm for regulations that prevents excessive interest rate hikes for no cause coupled with insufficient grace periods to reject the rates and close out the account.

We had used the cash advance to bypass a liquidity issue with other assets, so when sufficiently motivated, we were able to payoff the sizable advance within two weeks after talking with Advanta reps. Even then, we were hit with these elevated charges. Lesson learned.

A lot of credit card issuers are now including arbitration clauses in their contracts with the borrowers, so that any claim made against the issuer can't be turned into a class-action suit.

Certainly. By 'avenues of complaint,' I was referring to the FDIC and other regulators he was seeking out, not to the Hacker News post, which clearly has relevance and value to others.

The heart of my suggestion was that while it is easy to pour a lot of negative energy into fighting 'their unethical business practices' that 'fleece consumers,' it is more profitable (not to mention ultimately more satisfying) to keep one's focus squarely on creating value.

You're right. We won't waste much more time unless there's some sort of class action lawsuit that is real profitable (and consequently, highly satisfying) :-)