Will Dave Ramsey please pick up the white courtesy phone.
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.
You can argue theory all you want, but as long as there are true accounts of credit card issuers jacking up somebody’s interest rate from 8% to 38% because their water-bill payment got lost in the mail (the technical term is “universal default clause”), this is simply not a hill that any sane Republican candidate (or even Grandpa John) should consider charging (pardon the pun).
This is ridiculous. All Obama is doing is encouraging increased debt and consuption. If I run up a big bill on my credit card, it’s not my fault?
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Don’t forget the socialized health care coming our way if this idiot gets elected.
Yes!! Home Depot came to my house, put a GUN to my head, and said "sign here..." The days are gone when credit card companies can simply send you a card (remember those), and once you used it, it constituted your agreement. Now you receive an offer and either you decide to take it or you don't. Most of those "offers" you get in the mail are for low-balance cards with a "yearly fee" of upwards of 20% of the balance. Capital One, for instance, sends me an offer on the average of twice a week for some reason.
I agree. How hard is it to pay your bills on time?
How does one justify spending and spending beyond their means?
Who held a gun to anyone’s head and made them apply for a credit card?
Who told anyone to use a credit card as cash was worthless?
Victims my fanny.
is he speaking from personal experience? before he bathed in the river jordan, he was dead broke, apparently he couldnt afford to go to the 2000 dem convention because he credit cards were maxed out
That’s my point — as long as credit card companies act in technically legal but obviously abusive ways, only a moron would expend political capital defending them.
Don’t confuse Nobama with logic.
These companies are creating E-Z ID-Theft-O-Matic Kits targeted at the (intended) recipient. They deserve to be mailed something a lot more noxious than newspaper clippings and Kleenex.
Yeah, you’re right about this. As with most things personal responsibility, or more precisely the lack thereof is the culprit. Mencken once made the point that it was an error to say that the most salient characteristic of the Americano was his “money grubbing.” He said it was his prodigality. The sad thing about these credit card addicts is how easy it is to fleece them. They are vulnerable to the most childish ads and will spend thousands for gimcracks, gewgaws, gizmos and gadgets. Check out the Dave Ramsey show. It is replete with examples of fools buying crap with credit cards and having nothing to show for it but shiny baubles that they can’t get rid of.
Like a company who doesn't fire a certain employee not b/c they don't want to, but b/c they are afraid to, is it "predatory lending" when the bank grants loans to people they feel it might be, er, "imprudent", shall we say, not to?
“In his most recent book, “The Audacity of Hope,” Barack Obama describes the financial trouble he faced after losing a 2000 race for a seat in the U.S. House of Representatives. He said that the campaign’s demands “had left me more or less broke,” and he described difficulty renting a car when in Los Angeles for the 2000 Democratic National Convention because his credit card was initially rejected.”
http://articles.latimes.com/2008/mar/26/nation/na-obamataxes26
When you use a credit card, you are borrowing money.
It’s simple; only fools borrow.
Those same fools belive Obama.
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As opposed to whom?
Obama is an idiot.
Having dealt with both the banks issuing credit cards and the U.S. Government, with regards to debts owed, I would much rather deal with the banks than the Federals.
Will Dave Ramsey please pick up the white courtesy phone.
If four point type that starts
, it take a lot more than that to fully prepares someone for the Nuclear Chain Reaction of compounded interest at the default rate of 30+%
I don't carry balances- They hate me..But nevetheless I recall years ago when we got into that scene because of a hospitalization, the principal due to purchases was NOTHING compared to how the debt ballooned with all manner of fees and indefensible rates like that.
Jeez. Bambi brings back memories of the Carter administration ... they wanted to do a rating system for ice cream.
There is plenty of advice on the net about choosing a credit card. If people are too dumb to avail themselves of it, they are probably going to get themselves in trouble regardless of which credit card they pick.
And when they do, it will be Bush's fault!
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