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Schumer Blasts Retailers for High Credit Card Rates

US Senator Charles Schumer
US Senator Charles Schumer

By Mark Scott

Buffalo, NY – US Senator Charles Schumer released a study Monday that shows credit cards issued by Buffalo-area stores carry a higher interest than bank-issued cards.

"A store credit card, as convenient as it may be, is sort of like a wolf in sheep's clothing," Schumer said. "You might think you're getting a real bargain. But wait until the bill comes."

Schumer surveyed 18 national retailers with stores in the Buffalo area. He says some offer credit cards with rates exceeding 23 percent.

Schumer said the stores lure costumers into accepting their cards by offering discounts on their first purchases. But he said those savings can turn into a net loss if card holders fail to pay their balances in full.

"Their promotional materials should advertise the store's credit card interest rate and terms as prominently as they display the initial discount," Schumer said. "They'll say $10 off if you use our credit card. Let them say you're going to pay 23 percent. They don't say that."

Schumer said sales representatives should inform customers -- verbally -- of the credit card's interest rates. He also says stores should avoid soliciting college students and young adults into accepting store cards.

Schumer says he's written to the Federal Trade Commission to examine the credit card practices of retailers.