Consumer complaint received 2020-05-01 00:00:00
Product: Credit card or prepaid card — Store credit card
Issue: Fees or interest — Problem with fees
Company: Bread Financial Holdings, Inc.
State: PA

Complaint narrative:
Today, XX/XX/XXXX I received a call from Commity Bank. It was a call to get payment for my XXXX card. I do not use the card very often and am in a habit of forgetting to make payments. I receive the calls from them but most of the time it is during working hours and I am not able to deal with the payment. I acknowledge my fault in being late on my payments and I feel that I should be penalized, actually I thought that was the whole point of interest. Today I decided I needed to stop putting this off and get this card paid off. I went online to make the payment, thinking I could get rid of the balance because I knew the amount I used the card for was small. I was shocked when I saw my outstanding balance was for {$400.00}! I looked through the 'Transactions and Statements ' section of the website to see what in the world was going on. I had made 2 purchases with this card one on XX/XX/XXXX and the other on XX/XX/XXXX. In total those two purchases came to {$280.00}. The interest rate recorded on the XXXX Statement was 28.24 % and I believe that it continues to be that rate. I made a payment of {$100.00} on XX/XX/XXXX and another payment of {$49.00} on XX/XX/XXXX totaling {$140.00} towards the balance. In XXXX the balance should have been, {$180.00}. While I was forgetting about this card, that I rarely ever use, interest and late fees added up to what is now the current balance. So if we minus 50 % of the {$49.00} payment in XXXX against the principal that would bring the balance in XXXX down to {$150.00}, leaving the other 50 % of the {$49.00} payment for interests and late fee. If we minus the {$400.00} from the principal balance of {$150.00} we get, {$240.00}. This amounts to 152 % of interest of the current principal! I made a payment of {$100.00} on XX/XX/XXXX which is scheduled for release from my account on XX/XX/XXXX. I also called the company because I wanted to negotiate these fees. What they did was fight with me and demean my intelligence and ultimately, upon speaking with a supervisor I got 2 late fees waived. Now, I am not stupid. One of those late fees is policy of the company and the other is covered under the COVID19 mess we are all in. I could not help but think that this has to be against regulations some where. First of all, why isn't 28.24 % interest enough? Why isn't it enough for the finance company to allow this outrageously high interest rate to continue to accrue? My credit limit is {$400.00} on this card and so a {$40.00} late fee represents an additional 10 % of interest on the available balance, not even the amount I have used. In my case it was an additional 25.1 % on the balance. So my true interest charge on this balance is 53.34 % monthly! Isn't that against the law? 
Why do I even have a late fee in the first place, isn't the whole point of a credit card for you to buy something you don't have the money for, then pay for it over time so that the lender can become filthy rich off of interest? Isn't a late fee just an interest rate the finance company wants to charge but they can't because of regulations so they use the back door to get it, playing a cat and mouse game with the consumer? I don't mind getting into a little trouble because I neglected the card, I deserve it, but 152 %! Isn't that like dealing with a loan shark? I would also like to point out that on the statement the finance company conveniently does not show that the balance is split between late fees and principal. The late fees just become part of the balance and the new late fee is added as if there is only 1. Then interest is charged on the accrued late fees which are now higher then the principal! Is that allowable? I mean wow! 
When I questioned Commetity Bank about this they insisted that it is perfectly legal. Some XXXX XXXX something  girl tried to reason with me that the high integrity of the company would not run the risk of doing something crooked or under handed. HA! That poor girl does not know the world she lives in. If this is legal then it is your department that has fallen down on the job of protecting consumers. My personal opinion is that this is an oversight and that it is just another manipulating tactic of the banks to increase the money they can squeeze out of the people who use their services. That is why I am writing this complaint. You have to concede this is outrageous. Again, I deserve the accrued interest on the balance, I don't dispute that. I am wrong for allowing this to get out of hand, but honestly this is like making the stupid mistake of dealing with a shyster and opening up your wallet only to have him take all the cash that is in there. It is like taking advantage of a baby who doesn't know they lost their blankie until it is too late! At this point I will have to pay all of these fees so that I don't have the outstanding balance of late fees on my credit report. My only recourse is to learn my lesson and throw out the card and run if they every try to talk to me again. I would like it if you would do an audit on their company and others like them. I agree with the XXXX  XXXX XXXX XXXX, it probably is legal but that doesn't make it right. When you find out they have been extorting the public through late fees I would like you bring it into some kind of balance. The federal government just put XXXX XXXX dollars into the system, most of which was given in guaranteed loans to prop up the credit markets. Tax payers are on the hook for that capital that liquidfied the banks and credit card companies. Not only do they XXXX us with interest and fees, they expect us to bail them out of their continual mismanagement of all that money. 
I know that my numbers are small but the percentages say all that need to be said. If this is my experience then it is others as well. You have to concede this is way beyond the cost of money, even for a credit card company.

Company response to consumer: Closed with explanation