Skip to comments.Obama Makes Appeal to Credit Card Debtors ("Not your fault")
Posted on 06/12/2008 1:14:35 PM PDT by 2ndDivisionVet
Burdened by credit card debt? It may not be your fault. Sen. Barack Obama says in many cases, the credit card companies are to blame for "pushing" financially strapped Americans "over the edge." The banking industry disagrees.
In a speech in Chicago Wednesday, Obama outlined his plan to "build an economy that works for all Americans." He spoke mostly about personal credit card debt, which he views as a problem with a government solution.
Obama says the sour economy is forcing Americans to put more and more of their debt onto credit cards. (The American Banking Association on its Web site debunks a number of "myths," including the notion that Americans are "up to their eyeballs" in credit card debt. In fact, the ABA says, only about 46 percent of all families carry a credit card balance while 54 percent pay their outstanding balance in full each month. The ABA also points to a Government Accountability Office study showing that credit card balances as a percentage of total household debt have been declining since the mid-1990s.)
Obama noted that while some people make "reckless decisions" -- buying luxury goods they know they can't afford -- many more Americans aren't falling into debt because they made an irresponsible decision -- they're falling into debt because credit card companies are forcing them into it. He accused the credit card companies of using "unfair and deceptive" practices to trick Americans into signing agreements they can't afford." Or understand.
Obama said card-holders must sign long, complex contracts that are filled with "traps and fine print that only a credit card executive could understand."
He said "Washington" has let the companies get away with it -- because those companies have "spent millions" on political campaigns and lobbyists who influence legislation beneficial to the card companies.
"This has to stop," Obama said. "We cannot let the rules of the game continue to be rigged against ordinary Americans. We need a president who will look out for the interests of hardworking families, not just their big campaign donors and corporate allies."
Obama accused Republican John McCain of siding with the credit card companies by supporting a bankruptcy bill that Obama opposed. (The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made it more difficult for Americans to escape their debts through bankruptcy protection. McCain called the bill "an important step toward a fair and balanced approach to restoring personal responsibility to our federal banking system.")
Pending legislation in Congress -- a "Credit Cardholders' Bill of Rights" -- would protects cardholders against arbitrary interest rate increases, due-date "gimmicks" and misleading terms. Obama on Wednesday proposed his own "bill of rights."
"I'll protect the rights of ordinary Americans by cracking down on companies that are trying to deceive them," Obama promised. He said his plan begins with transparency -- helping Americans understand the risks involved in signing up for a credit card. To that end, he said he'd create a five-star rating system. "That way, Americans can compare credit card companies and avoid those that are stacking the deck against them."
Obama said he'll propose a credit card bill of rights that would ban unilateral changes to credit card agreements. "You should pay the rate you signed up for. If the credit card company wants to raise that rate, you should be able to opt out of the agreement."
According to the American Banking Association, if consumers are unhappy with the interest rate or other terms, "there are thousands of issuers that would be happy to accept their business." The ABA says the consumers' "power of choice" to transfer outstanding balances "cannot be overstated." It notes that hiking the interest rate allows credit card companies to "avoid taking on risks that are too high to maintain."
Obama also wants to ban rate changes on past debt. "If a credit card company wants to raise interest rates, then that new, higher rate should apply to the debt you add going forward, not what you already owe." And he would ban interest charges on transaction fees. "If you're late in making a payment, you have to pay a late fee. But you shouldn't be paying a fee for paying a fee."
"It's time Washington established some rules of the road to level the playing field for hardworking families," Obama said. "It's time we had an economy that worked for companies and consumers alike. That's what my campaign is all about."
He said Americans have a "clear choice" in November -- "you can choose an approach that sides with the credit card companies...or you can choose to finally have a President who looks out for Main Street, not just Wall Street..."
"Consumers are in complete control of how they use their credit cards," the ABA says on its Web site. It also says most bankruptcies in this country are not caused by credit card debt, but by life crises such as divorce, job loss, or uninsured illness.
Isn’t interest against Islamic law?
He’s pullin a Chavez already.
Personal responsibility has no place in the Obama agenda.
Predatory lending is when a bank lends money to people that the bank has little reason to believe can repay the loan.
Person responsibility cuts two ways. The lender should be professional--should be moral.
The first time you drop off your naive freshman--who has no income to record!--on campus where there are rows of booths hawking easy credit, maybe you'll see what I'm talking about.
Responsibility goes both ways.
Make me pay for your mortgage with my tax dollars, now I'll be paying for your credit card debt, too?
What a country !
Mindless, vapid, populism.
The scary part is that Obama, coupled with this moronic congress, will act on it, and drive the banking industry completely into the ditch and interest rates will SOAR as a result.
“You should pay the rate you signed up for. If the credit card company wants to raise that rate, you should be able to opt out of the agreement.”
What a blooming idiot! Is he not aware of the contracts on back of all credit offers consumers receive and thereby agree to when they sign?
Obama is a dunce.
I bet he would oppose restoring the tax deductibility of interest paid on credit cards and automobile loans.
“He spoke mostly about personal credit card debt, which he views as a problem with a government solution.”
“The nine most terrifying words in the English language are “I’m from the government, and I’m here to help.””
He is an idiot....in five years, low income Americans won't be able to get a credit card if you take the profit out of them.
Let's see what happens when a majority have to pay cash for big dollar items.
B. Hussein is VERY good at the politics of victim-hood.
He may very well be elected Chancellor this November. Then his Ministry of Finance can get to work helping out the poor helpless folks who have been taken advantage of by the evil corporations in this country.
I do not think he is a dunce.
I think he knows exactly what he is doing.
Charging those kinds of interest rates would have gotten you burned at the stake in any Christian country 400 years ago.
Bankruptcy and no debtor's prison were some very attractive things in the early USA that allowed people to come here and make a fresh start.