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| No | 25% | 104 votes | Total: 411 votes | |
| Yes | 75% | 307 votes |
No
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Add to FavoritesSure as a single rain drop can put out a forest fire, Congress can protect us from predatory credit card companies and the banks who control them.
Too many legislators in Washington, D.C. need or just plain want the money banks and credit card companies are ready, willing and able to pay out to protect profit. Band-aid legislation that looks good to consumers might pass out of Congress and be signed into law. Major surgery is need though and I doubt there are enough representatives and senators willing to support its performance.
Even if there was will in Washington, any significant government regulation would have to wait until George Bush is gone from the White House. We already know how lowly he regards children in need of health care. Do you really think he would sign any bill that would hurt his banking buddies' bottom lines?
Here in California, I can, by law, be charged no more than 10% interest a year to borrow money from a friend money, $10 for every $100 borrowed.
Read the fine print on your credit card statements. You can be made to pay 30% or more in interest every year until you pay back the money a credit card bank loans you when you buy anything using their credit card. This can mean paying over $2000 for something that cost $1000, the $1000 borrowed plus over $1000 in interest.
There once was government protection against usury, "an unconscionable or exorbitant rate or amount of interest," according to the Merriam-Webster Dictionary. No more. Banks can charge as much as they believe they can get away with charging.
The federal government and state governments are the reason people who have come to depend on credit cards to pay their bills are abused, why middle-class people are becoming poor and poor people are becoming poorer. They have allowed interest rates to become onerous and usurious. They've allowed the predatory practices of banks and credit card companies that have resulted in many Americans being all but enslaved.
You, me and everyone else regularly ripped off by banks through credit cards are the only ones who can protect us.
Pay for what you buy with cash and stop using any credit card. If you know in advance you'll have to make a purchase you'd usually make with a credit card, put enough money in a savings account every month so you can pay cash when you make the purchase. Yes, this may be a pain in the posterior. Better, however, to save before you buy and, maybe, get paid a bit of interest than to pay principal and a lot of interest after you buy. Difficult at first, this will pay off in the end.
If you must use credit cards, stop using any card from a bank that charges an interest rate higher than the lowest rate your local bank would charge to borrow money, for sure a rate a lot less than the credit card rate.
Bankruptcy might be an option. Talk to an certified public accountant. If it's going to take a decade to pay off a credit card loan, and you'll wind up paying two or three times the loan amount in interest, like $30,000 interest on a $10,000 loan, maybe bankruptcy is the most responsible alternative. Banks count on people being afraid of bankruptcy. Don't be afraid to find out if this is an alternative for you and do what is best for you. Don't worry what any bank thinks about you. You're already regarded as a chump anyway.
Whatever you do, tell everyone you know what you are doing and why. Write the news media and blog. Write your state legislators and demand that your state legislature limit the interest rate anyone in the state can be charged for use of a credit card. Let them know that your vote will go to the candidate who will best protect you.
Bankers and credit card company CEOs don't fear or respect us because we have simply paid more whenever we've got a letter saying, essentially, "Pay More Or Else." They believe we are too stupid or too weak to stop them from robbing us. They are confident that we have neither the courage nor the conviction to stand up to them.
I say, "Let's prove them wrong!"
Learn more about this author, Stoneheart.
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Yes
Credit cards and other forms of debt are and should be regulated by both State governments and the federal government. Responsible use of credit can be a benefit to businesses and consumers if used well, and making sure that specific rules regarding lending on both the part of the lender and the consumer make sense. That is why there have been regulations regarding credit cards since they began to be used in large numbers after World War II.
The real question is: 'What type and depth of regulation is best?' Clearly understood terms and conditions regarding the credit card's use benefit both parties, unless one party is attempting to use confusion and mis-information as a tool to gain advantage. Credit card companies are famous for their use of fine print and confusing language to mislead consumers. But consumers have been all to willing to suspend their doubts and plunge ahead with the use of credit cards in spite of significantly unfavorable terms.
Credit card companies make money by loaning out the purchase cost to consumers and then gaining interest on unpaid balances. They also earn fees from merchants and companies that accept the cards in the belief that honoring the cards increases their sales. Each year hundreds of billions of dollars are transacted by credit card companies, resulting in billions in revenues for the companies just on merchant fees alone. Over time, consumers have allowed unpaid balances on their accounts to accrue even larger amounts of interest payments to the credit card companies. With their relentless marketing campaigns and the cultural messages about how we all 'need' to have the latest fashions and material goods, the credit card companies are controlling a vast portion of the national wealth.
With this much money in play, the opportunity for some companies and individuals to exploit the rules for even more gain is a real possibility, so common sense and enforceable regulation seems to be a good idea. Along with that regulation, however, should be a serious amount of education and self discipline to keep consumers from endangering themselves through unrestrained spending.
Clearly, credit card companies should be restrained from charging outrageous interest rates and late fees. Before the 1970s, credit cards were typically capped at 12% annual interest. When inflation was running in the range of 9-12% per year, the banks lobbied for and received legal approval to raise their rates. When inflation was tamed to the low levels we have today, the banks insisted that high levels of credit card defaults made it impossible to lower the rates. The banks and the legislatures never tried another approach-having fewer people with credit cards, because that was considered discriminatory. Like the current mortgage crisis, no one seems to favor putting limits on credit to consumers because our economy is so dependent on consumer spending. As a result, too many people have been allowed to accumulate too much debt.
Credit card companies should also be restrained from soliciting accounts for consumers that are not capable of paying them back. The relentless streams of junk mail and offers of 0% interest to children, pets and the elderly are clearly not in anyone's best interest. Controlling these efforts should be a reasonable goal that everyone can support.
Credit card companies should also be bound by civilized practices to clear up account discrepancies and serve their customers. Harassing phone calls, threats and intimidation are already covered by regulation via federal law. Violations of these standards should be actively prosecuted and companies should be financially penalized for such aggressive and unnecessary actions. In return, consumers who willingly fail to meet their debt obligations should be held to account as well, because they are effectively adding the burden to the rest of us in the form of higher costs.
Regulation of both credit card companies and consumers is a necessary thing. Making sure that the regulation is effective and fair is the role of government, and we should not simply accept conditions that do not meet those standards.
Learn more about this author, Gary O'Neill.
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