Consumer complaint received 2019-04-08
Product: Credit card or prepaid card — Government benefit card
Issue: Unexpected or other fees — 
Company: DISCOVER BANK (VA)

I am writing this petition regarding credit card billing procedures and resultant ramifications, as an attempt to call attention to the credit card industry 's practices, and how over time they have become accepted and regarded as fair, responsible, and transparent when, in fact they have become extremely difficult to understand, hidden in fine print, and virtually impossible to calculate by the average consumer. This lack of transparency, deliberate or otherwise, can be entrapping, and expensive ( some may argue usurious depending on which method of calculation, or which definition of usury might be used ).

My motive is not to call attention to Discover Card in particular, but to an entire industry whose practices have evolved to be unfair and obscure to the average consumer in my opinion ( I have another credit card which employs similar practices and calculations ). It is a sincere plea for transparency. 

I recently experienced the following events that occurred over the end of this past year as I received and paid my statement balances regarding my Discover More Card. I believe there is cause to be concerned about the excessive interest charges that accrued and compounded as a result of a minor error on my part. The excessive interest charge resulted from the calculation method used which is referred to in the fine print of the credit card agreement and the fine print on my statement. However, it is my opinion that the excessive amount was greatly exacerbated by less than full transparency as shown on the Discover statement format and labeling, and, in my opinion, is likely to be adversely affecting many other unknowing credit card users. 

I have included copies of my pertinent statements and letters of correspondence with Discover Card. 

In my case, I normally pay off my full credit card balance as shown on my statement as the " New Balance '' every month ; however, I mistakenly underpaid the New Balance on the XX/XX/XXXX, statement by XXXX cents ( {$.00} - one thin XXXX ). Consequently, my account was in arrears causing my XX/XX/XXXX, statement to be charged {$14.00} in interest. This interest was computed on a daily basis on the amount of my XXXX charges and was included in the XXXX New Balance which I paid entirely as I normally do in a timely manner, but I failed to notice the {$14.00} interest charge which had accrued. 

Even though the XX/XX/XXXX, " New Balance '' had been paid entirely and in a timely manner, I was charged another {$22.00} in interest on my XX/XX/XXXX, statement which, was computed on a daily basis on the amount of my XXXX charges plus interest from the closing date of my XXXX statement ( XX/XX/XXXX ) until the payment of the balance on my XX/XX/XXXX statement was received. ( See Discover letter dated XX/XX/XXXX. ) As I understand it, the reason Discover could charge the interest on the XXXX statement, even though the New Balance on the XXXX statement was timely paid, was because interest on the XXXX New Balance continued to accumulate from the time the XXXX statement was mailed. And, therefore, even though my XXXX New Balance was timely paid there still was a balance due on my XXXX bill. 

In any event, when I received my XX/XX/XXXX statement I noticed the interest charges on my statements and contacted Discover concerning them. They agreed that {$37.00} ( {$14.00} plus {$22.00} ) in interest on a XXXX cent underpayment was excessive and removed both interest charges. 

After further inquiry with a supervisor with Discover, I was assured that further interest charges would have been stopped after the second month of paying in a timely manner the " New Balance  '' amount shown on my monthly statement. A representative of XXXX XXXX XXXX later told me that this two-month protection is a federal regulation. Otherwise, as I understand it, these interest charges would continue ad infinitum even though I would continue to pay in good faith the " New Balance '' amount on each subsequent statement. 

In my opinion, not only does this billing procedure result in a disproportionate financial impact on the cardholder ( in my case {$37.00} in interest in two months because of a XXXX cent underpayment ), but also, in a worst-case scenario, it could possibly adversely affect a cardholders credit rating. 

To me it is obvious that this billing procedure is less than transparent and should be changed. Perhaps, by a caveat on the face of the statement ; perhaps by a text message and/or email notification that interest calculations have been initiated and/or continue on the account ; perhaps by posting the card 's daily interest calculations on a website viewable by the credit card holder or perhaps in some other way. 
Thank you for taking my concerns under consideration, and I look forward to hearing from you. 

XXXX XXXX. XXXX XXXX XXXX XXXX XXXX, VA XXXX Cell Phone and Text : XXXX XXXX XXXX