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Regulation of credit card companies is long overdue

Monday, May 12, 2008 | 10:00 a.m. CDT; updated 8:09 a.m. CDT, Tuesday, July 22, 2008
Rose Nolen

Finally.

According to a story from The Associated Press, regulators including the Federal Reserve System have taken steps to stop credit card companies from ripping off customers. The fact that these companies have gotten away with raising interest rates for years and treating their customers like criminals when they fall behind in their payments has given us a fair idea of whose side the government is on.

While many of our parents lived most of their lives never using the installment plan to make their purchases and used lay-away plans for acquiring their merchandise, most working-class people are dependent upon using credit for everything today from buying a house to filling their kitchen cabinets. And, of course, it has always been true that some tend to go overboard and spend beyond their means. But when these companies refuse to take a customer’s good credit history into consideration, when they are struck with an illness or some other crisis and pile on late payments enough to drag the consumer under, there should be regulations that prevent them from doing that.

It’s just too bad these regulators waited until so many are at the point of foreclosure and bankruptcy before they decided to take action.

This particular story illustrates the necessity for a vigorous press. The public truly needs a watchdog these days more than ever when it seems that so many of our governmental agencies are simply not doing their jobs. Where was the Federal Aviation Administration when the airlines allowed their planes to fly without being inspected? Where is the Federal Food and Drug Administration when we hear these stories about tainted food being imported into the country uninspected? Where were the military bigwigs when the facilities at Fort Bragg were deteriorating?

Obviously, we can’t depend on the people we elect to office to do their jobs. This is what happens when we allow the electronic media to turn news into entertainment. The public loses its advocate. Somebody needs to be outside the door listening when people charged with carrying out the public’s business are meeting behind closed doors. With our country in the mess it’s in, we have to start paying attention.

Those who think that letting the free market run rampant is a good thing, surely mean that it’s a good thing for corporate types. It’s seldom a good thing for the working class. These thinkers are like those who still contend that raising the minimum wage was a bad thing for business. It seems to me a truly conservative thinker would believe that if an individual cannot operate a business well enough to pay his employees a living wage he should not be in business. These people seem to feel that it’s just fine for the taxpayers to subsidize business owner’s employees by providing them with food stamps, Section 8 housing and Medicaid cards. If these people do not feel that human beings are entitled to food, shelter and health care why should they bother to work at all.

It is unfortunate that workers today do not seem to appreciate the value of organizing for their own protection. Many people are enjoying comfortable retirements because they were union workers who fought for good salary and good benefits. Some who did not have pensions and are left trying to live off their savings are having a hard time staying afloat. There’s a lesson in that.

Most people probably wish they never had to use a credit card and therefore would not care whether these companies were regulated or not. But with gasoline and food prices continuing to rise a lot of people who have paid cash in the past may have to use charge cards in the future.

Regulating credit card companies is an idea whose time is way overdue.

You can join the conversation with Rose M. Nolen by calling her at 882-5734 or e-mailing her at nolen@iland.net.


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Comments

Mark Foecking May 14, 2008 | 9:22 a.m.

If you really look into it, a lot of people use credit cards very badly. Interest rates on cards are high, hopefully, so people will think twice abut using them. This isn't what is happening.

I'm all for raising the minimum payment amounts - this gets a lot of people into trouble. These companies are doing poor people a favor, by letting them average out their expenditures. People screw up by regularly expending more than they can afford. That's not the credit card companies fault - they're not forcing people to buy things they can't pay for.

I can show you how a single mother, working minimum wage, can save up to $2000/year from her earnings. Tough life, yes, but achievable. Precious few of the poor people I know around here have any idea of what true frugality is.

No one is entitled to anything, except maybe to watch the sun rise the next day. The idea that someone is born, and should get stuff simply for being alive, has generated a great deal of institutional dependency (and the illiteracy and crime the goes along) that we have been dealing with, mostly ineffectively, for generations.

If someone needs a credit card just to live, then they are living beyond their means, and need to do something about that. Blaming the credit card companies for making credit available to people that probably shouldn't have it is unjustly shifting responsibility. How about getting the people spending money they don't have to wise up, make a budget, and take control?

DK

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