It took a while, but Congress is finally starting to take interest in the unbelievable practices of the cut-throat credit card industry. Senator Carl Levin will be heading up a committee to investigate the practices of credit card companies and come up with legislation that would further regulate the financial practices of credit card companies. I work in the insurance industry, so I definitely understand that it is our responsibility to read the credit card terms and conditions. But let’s be honest, unless you work in the credit card industry, it’s impossible to figure out how they calculate your daily, weekly, monthly, and even your yearly interest rate.
You may already know how much I dislike credit cards and the entire industry itself, s0 hopefully this investigation will expose some of their “legal”, yet devious practices. One man from Ohio gave testimony to the Senate about how he was charged 47 over-the-limit charges on his credit card, but he actually only went over the limit three times. My guess is that every month he was still over the limit so they continued to charge him the over-the-limit rate. My favorite is when credit card companies will raise your interest rate based on the activity of OTHER credit card accounts. The $39 dollar late fees are always nice, too. Reputable lenders like mortgage companies actually allow 15 days before they impose a fee that high. It’s not that I think there should be no penalty for paying late, but I’ve been literally one day late before and charged the $39 dollar fee. Let’s not even get into the collection agent practices of credit card companies. They break every rule from the Fair Debt Collecting Practices Act.
I want to start a discussion about why you think credit cards are beneficial to society. I’m bracing myself for the articles that will talk about how cutting out some of the credit card company’s profits will discourage spending and therefore hurt the economy. If there is anyone who truly believes that, then they are extremely naive and ignorant about macroeconomics. If our society waged war agaainst credit card companies and stopped kissing their butt, then we might be able to cut into the massive 850 billion dollars of debt that we’re in. We carry one of the largest consumer debt loads in the world, and our spending is out of control. Congress recognizing the problem is a start, but it will be up to us to stop letting Chase and Citigroup take advantage of us. Answer this question: Would our world be better off without credit cards? I truly believe that it would, but many of you would disagree with me. “Credit cards offer rewards programs” and “Credit cards help people get out of a jam”. Those are excuses that people might use to support the notion that credit cards are a good financial tool.
So what do you think? Do you think that I am some kind of “I hate debt” freak, or are you with me that credit card companies nee d to go down! Leave me a comment with your thoughts.