Weiner Says Shoppers Facing Many Woes
This year's holiday season may be the worst for wallets, a recent study by Representatives Anthony Weiner and Carolyn Maloney shows. Before entering a store, or even going online to shop, consumers are being charged higher ATM surcharge fees as well as credit card and store credit card interest rates.
Rates are up even though money is cheaper. The Federal Reserve rate, the basis for many credit card interest rates, has dropped to 1 percent.
"Shoppers hit by soaring interest rates and fees are seeing the prices of their holiday gifts go up - after buying them," Maloney said in a press release.
Weiner and Maloney used data from the Federal Reserve, major New York City retail stores and www.bankrate.com to compile the "Shoppers' Misery Index."
They discovered ATM surcharge fees have increased 28 percent since 2006 - from an average rate of $1.45 in 2006 to $1.85 in 2008.
When withdrawing cash from ATMs not owned by your bank, an average fee of almost $1.50 is added.
They also found the average interest rate for a bank credit card is more than 12 percent and the average store credit card rate is more than 20 percent.
Both rates have increased since the new millennium and are still on the rise.
"The law of economic gravity doesn't seem to apply when it comes to shoppers accessing their own money," Weiner said in a press release.
"Banks are crying for billions while pulling more and more money from the pockets of consumers."
Maloney and Weiner have made advances in combating increasing fees. Maloney authored the Credit Cardholders' Bill of Rights, which attempts to stop industry abuses, and Weiner introduced legislation to better regulate interest and fees.
Weiner also noted cheaper banking alternatives, such as online banks like ING Direct and E*Trade, which charge no fees for ATM use at other banks.
"We need to put an end to abusive industry practices," Maloney said. "It's outrageous that financial institutions that received billions in taxpayer aid are leaving struggling consumers out in the cold this holiday season."