Credit card companies are all kinds of evil. I know it, you know it. Now Congress knows it. Credit card companies do all kinds of nasty things (see below!) to take your hard-earned cash, so it's kind of nice to know that our government wants to do something about it.

The Senate Homeland Security and Governmental Affairs' investigative subcommittee got an earful today from Wesley Wannemacher, an Ohio man who was charged interest and penalty fees on his credit card that essentially tripled his debt.

Wannemacher used a new Chase card in 2001 and 2002 to pay for expenses mostly related to his wedding. He had $3,200 in purchases, interest charges of $4,900, 47 over-limit charges totaling $1,500, late fees of $1,100, for total charges of $10,700 as of February.

Or how about Derek Lee?

...who paid off one of his credit cards because he wanted to cancel it. Six months later, he still hasn't been able to because the card company keeps charging him mysterious fees that keep the account open. "It's incredibly frustrating. It's unfair and it's unethical, and it has dropped my FICO credit score [a measure of credit risk] by 69 points," Lee told "Good Morning America."

Headed by Senator Carl Levin (D., Michigan), today's Senate hearing examined credit card companies' lending practices touched on a number of issues relevant to anyone who used credit cards (that would be pretty much all of us).

One issue of significance to both consumers and business owners is something called interchange.

Largely unknown to most consumers, interchange is a percentage of each transaction that Visa and MasterCard collect from retailers every time a credit or debit card is used to pay for a purchase. The fee varies with type of merchant, transaction and card, but averages close to 2 percent for most credit card and signature debit transactions. Visa and MasterCard interchange fees totaled $30.7 billion in 2005, up 17 percent from 2004 and 85 percent since 2001. The average family in the U.S. pays more than $300 every year in hidden interchange fees.

Those are those little fees that the convenience stores make you pay if you try to put something under $5 on your credit or debit card, right? You either pay it directly or the store hikes their prices up to cover the difference, because it costs them too much and unfairly hits small businesses with crazy charges? And that costs me almost $300 a year?

Here are some other fun credit card practice terms you may or may not be familiar with (from ABC News online):

  • Trailing interest: credit card company charges interest on an entire purchase after you've paid it off.
  • Universal default: Make a late payment on credit card A, and other companies raise interest rates on your other cards.
  • Lowest interest first policy: charging consumers different rates for different types of transactions; transactions with the lowest rate purchases get paid off first, so that high-interest transactions hang around, charging you more.

The Merchants Payments Coalition, an industry group that is pushing for reforms that would change the way credit cards bilk... I mean, charge businesses, has put together a website that urges you into action.

I like this article by Issac Bailey, which points out that in some ways, our banks are worse than payday lenders.

Me, I've made up my mind about credit cards. I'm in the process of paying off my last ones, and when I'm done, I'm done. I might consider some sort of rewards card in the future, but a revolving balance will never again be an option for me. I'm glad, though, that these business behemoths might be getting their due. I believe wholly in capitalism, but there's this thing called 'ethics', which is related to 'human decency', which in turn promote 'customer satisfaction and loyalty'. Those are some terms that these banks and lenders really should try to grasp.

Some inspiration for those trying to cut up those credit cards.