Supreme Court to Rule on Whether Credit Card Companies Can Charge Extra Fees
CAROL COSTELLO, CNN ANCHOR: Well, we all know about the high interest rates some credit cards charge. But the Supreme Court will rule on the case of a credit card customer surprised about expensive fees. CNN's Paul Courson live in Washington to explain how this ruling could affect you and your credit card bills. This is an amazing story -- Paul.</s>PAUL COURSON, CNN CORRESPONDENT: Let me ask you something, Carol. Do you read all the fine print on your credit card or do you just click I accept and go on with it?</s>COSTELLO: I just click I accept and go on, which is wrong.</s>COURSON: Well, this woman said that in the fine print it was true that if she went over her credit limit, there were extra charges that would apply. Sharon Pfenning, she was a student at Ohio State a little over 10 years ago when this particular credit card was issued. And she went over her credit limit, which was $2,000, and she wound up discovering her balance was getting kind of high. Well, it turns out $29 a month plus interest was being charged to this customer because she'd been over $2,000.</s>COSTELLO: And was she paying on her credit card in the meantime?</s>COURSON: She had been paying. Yes, she was paying on time, but she was over that magic limit of $2,000. Now, she said, her lawyer said that she had permission from the bank to be over that limit. But the bank said no, we didn't technically authorize the higher credit limit and that the charges were legit. So it went through the courts and it -- most of the courts sided with what's called Regulation Z. It's a banking -- I'll call it a technicality -- that allows them to categorize charges in a certain way. That charge was correctly categorized, said the lower courts. The customer said no way, no fair, it wasn't properly disclosed, I have a right to know that $29 a month plus interest was going to be charged to our account. So the arguments on both sides have taken place and we'll see whether the Supreme Court rules that these rules ought to be clarified, Regulation Z versus the Fair Credit Reporting Act.</s>COSTELLO: You know, it's just astounding to me what credit card companies are able to do, because nobody reads the fine print really.</s>COURSON: Well, it's like those car ads...</s>COSTELLO: I mean I wish everyone did. Go ahead.</s>COURSON: It's like the car ads where they talk real fast, talk real slow and say you're really not going to get a good deal like this, so don't bother trying, you know, and the fine print in the credit cards is much the same way. Interest rates can be high on credit cards and the fine print can be just devastating if you get in a little bit over your head. Now, this is a college student and 10 years ago, $2,000 was even more money than it is today. So when she wound up seeing this $29 a month on her bill, she called a lawyer and said something's not right here. And the lawyer found out that this charge was embedded in the other charges part of her statement.</s>COSTELLO: Well, you would think if you had a $2,000 limit you couldn't charge anymore on your credit card. You would just be cut off.</s>COURSON: Ah. Well, look, I've only got a $100 credit limit and they let me go over it all the time. It's one of those things where, you know, the credit card company, if you've had a good payment history, they quite often will let you go over your limit. But it's going to cost you in some cases. And that's where the fine print really needs to be read.</s>COSTELLO: You know, every time we do a story like this, I go home and cancel a credit card. I'm going to go do that later today.</s>COURSON: Pay cash.</s>COSTELLO: Yes, right. Thank you. Paul Courson live from</s>D.C. COURSON: See you. Charge Extra Fees>