Seniors struggle with fine print on credit cards

Erica Johnson

Friday, June 1, 2001 | 10:39 a.m.

Senior Citizens Project

Las Vegan Charles August, 75, learned recently that if something seems too good to be true, it probably is.

He was approved for a Visa credit card through a local bank despite his bad credit, August said. He later received a bill saying he owed hundreds of dollars in fees.

According to Michelle Johnson of Consumer Credit Counseling, an organization that offers financial counseling and debt repayments, August is one of many people duped by credit card companies' tiny print and hidden fees.

People who don't read the backs of credit card applications can end up with rates as high as 21 percent, Johnson said. Senior citizens especially should be aware of this tactic, she said.

August, whose income consists of an Army pension and a Social Security check totaling about $700 a month, said he sent $49 to First National Bank of Marin for a partially secured credit card. He got the card and later discovered an additional $200 was billed to his account without his knowledge. Bank officials say the fee was to secure the card.

When August refused to pay, the bank canceled the account but would not refund the $49, August said.

"They are targeting the elderly who can't attack them because they don't have the mental capacity or financial means to do so," said August, who claimed several calls and letters to the company proved unsuccessful.

Robert DeJong, president and CEO of Marin, said his company goes the extra mile to make sure consumers understand the terms and conditions outlined in their contract.

DeJong said although his company does not specifically market to seniors, the law requires that the main components of the agreement be fully disclosed to people of all ages. DeJong said Marin representatives call each new applicant to make sure they fully understand the terms of the agreement, which is "unheard of in the business."

The credit card August applied for through Marin, a company that moved to Las Vegas from California in 1995 and has more than 500,000 customers, includes an APR (annual percentage rate) of 19.8 percent, an enrollment fee of $99, and an annual membership fee of $72 a year.

August was charged $200 on his card in addition to those fees. In the fine print on the back of his contract, the initial $200 charge was explained as necessary in order to secure his credit.

According to DeJong, because Marin targets people with credit problems as a result of events such as divorces or accidents, the $49 fee is necessary to cover processing and the additional fees allow customers who don't have the money upfront to establish a secured line of credit.

"I think 95 percent of credit card companies do a fairly good job of trying to disclose everything to all age groups," DeJong said. "We have all the vested interest in the world to make sure customers fully understand the contract they sign. If we don't have a happy customer, we lose lots of money."