Isn’t there a term for near-30% interest on loans? Something like, “loan sharking”? “Usury”??? Does the mafia even charge this much?

Saturday, August 18, 2007 by CommonDreams | Legalized Loan Sharking: The Sleeper Issue of 2008 | by Marney White

There’s a sure way that a presidential candidate could get the attention of even the most politically apathetic citizen this year: vow to outlaw outrageous interest rates legally being charged to American consumers by credit card and student loan corporations. These rates are causing real and enduring pain to hard-working Americans and their families who find themselves behind the eight-ball.

Like me.
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Fast-forward three years, and that $5,500 turned into $14,000+ in debt. My student loans, which were approximately $42,000 when all of this started, ballooned to $69,000 from late fees and penalties, after I ran out of hardship deferments (and interest kept accruing, even in deferment).

Trying to figure out how I could have gotten into this situation, I examined my credit card statements more closely. Taking for granted the low interest rates I qualified for before all of this happened, I had never expected what I now saw.

To my utter astonishment, I discovered that I was being charged between 22% and 29.5% on all of my balances. This included one card, Care Credit (owned by G.E. Money Bank - hey, why stop at war profiteering?), which is intended to help people stretch out payments for dental and other medical care. The Old Navy card I opened to buy school clothes for the kids was (quelle surprise!) also parented by G.E. Money Bank. Both cards (and others) were charging me nearly 30% interest. For children’s school clothes and family dental care!

Isn’t there a term for near-30% interest on loans? Something like, “loan sharking”? “Usury”??? Does the mafia even charge this much?

It got worse for me from there. When I was able to make the minimum payments, I noticed that my balances kept hitting the ceiling of my credit limit, as soon as I’d get them a little bit below it, costing me a $35 “over limit fee”, in addition to any $35 “late fees” I might incur. ...
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... Another gift to corporate finance woven into that “Consumer Protection” Act was the newly-granted right of these companies to raise rates to usurious heights, and add draconian late and over-limit fees. Horrified yet? Wait — there’s more. If you happen to fall behind on one card, the rates for ALL of your cards can now be bumped up to these stratospheric levels! I kid you not, this even happens to people who are NOT in dire straits, and don’t have bad credit, but simply forget about a payment and get caught in these nets!

In an appreciative nod to their contributors at the banks and credit card companies, Republican legislators also tightened bankruptcy laws. So now, you’re really out of luck if you fall on seriously hard times. Oh - and don’t forget that most people who get in this deep do so because of the expenses associated with a catastrophic illness, a divorce, underemployment, or unemployment.

That, I realized, was how my $5,500 had turned to $14,000+, and how my student loans grew from $42,000 to $69,000 faster than Mickey’s broom multiplied in “Fantasia” … all because of a few years of reversal of fortune. ...