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Letter in Support of House Bill 1501 |
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The
Honorable Dereck Economic
Matters Committee
Annapolis
, Re: Support for HB 1501 – Consumer Protection - Credit Card Issuers –
Required Disclosures Dear
Mr. Chairman and Members of the Committee: The
Maryland Consumer Rights Coalition, Inc. is a non-profit education and advocacy
organization that promotes equity and fairness in the consumer marketplace.
We support the enactment of House Bill 1501 -
Consumer Protection - Credit Card Issuers – Required Disclosures. House
Bill 1501 requires a credit card issuer to disclose on a credit card
application and in person, if the credit card is offered in person, that the
processing of a credit card application can affect a consumer’s credit
rating. This bill is needed to
address the common practice among many retailers to encourage consumers to open
credit card accounts with the retailer in order to save money on their initial
purchase. Many consumers do not
realize that applying for a credit card may have a negative affect on their
credit score. Consumers who apply
for a credit card with every store who offers them one, may save 10% on their
purchase, but they are also lowering their credit score, which could mean they
end up paying a higher interest rate when they really need to borrow money to
purchase a car or to buy a house. We
suggest that HB 1501 be amended to include credit card vendors in addition to
credit card issuers. Vendors are
independent companies that have contracts with credit card issuers to market
credit cards, often to college students. We recently issued a report on credit
card marketing to college students (a copy of the report can be found at www.mdconsumers.org)
that found that aggressive marketing by credit card vendors still occurs
on a number of Maryland college campuses. Many students apply for multiple
credit cards in order to get the free gifts offered by vendors, not
understanding that it will affect their credit record. We
also suggest that the bill be amended to require that the disclosure be posted
in writing at the place the credit card application is offered, if offered in
person. The Maryland Consumer Rights Coalition urges you to give HB 1501 a
favorable report, with the suggested amendments.
Very truly yours,
Cheryl L. Hystad
Executive Director
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