The $683 billion in unpaid American credit card debt is about to look a whole lot uglier, thanks to efforts by Rebpulicans in Congress that will protect wealthy individuals and unscrupulous credit card companies while making it harder for the debt-laden individual to declare bankruptcy.
Not only that, but those with the means will be able to work the system by disguising assets in home values and declaring bankruptcy to wipe out other debt. Where? You guessed it. In the two states with “Bush” written all over them.
washingtonpost.com / Tighter Bankruptcy Law Favored:
The legislation would make it harder for, but would not eliminate the ability of, wealthy people to hide assets during bankruptcy by buying expensive houses in states such as Texas or Florida, which currently provide broad exemptions for homes.
Sure, we live in a $6 trillion spend culture where it’s easier to buy a car than it is to return a DVD you’ve decided you no longer want, so to some degree, it is the responsibility of the individual to curb his or her spending habits, but the credit card companies have way too much leeway. They’re allowed to set whatever rates they want, prey freely on campus to lure in unknowing college students, and take joy in constantly raising credit limits higher than income levels. Case in point: I’ve had a $20,000 credit limit on my Citibank since college. I can guarantee you that I made nowhere near that much money as a college student.
In many cases when individuals are forced to declare bankruptcy, it’s not so much a result of irresponsible spending on credit, but an extreme situation — job loss, injury, medical bills — that might lead one to fall back on credit when there’s no other option. That, of course, points to many bigger problems, such as the faulty American health care system. But that’s a different topic for a different day.
This is a two-way street and it’s time for credit card companies to be held accountable for ethical and responsible behavior that helps drive individuals deeper and deeper into debt.
[ via Jenny and Joe in D.C. ]
2 responses so far ↓
1 Jordan // Feb 17, 2005 at 11:30 am
My credit limit in university was $700 dollars and stayed that way all four years. It wasn’t until after college I got myself a new card, and my current card has a limit of just two months of salary on it. I don’t need more, and I won’t support a credit card company that doesn’t offer me a choice of a low-limit card.
I don’t want the government to go in and limit the abilities of credit card companies to provide services that consumers demands just because current American culture has people mis-using credit. Credit card companies are required to disclose policies on changing limits, policies on changing APR, etc. Requiring a card company to cleary disclose that information is all that should be needed. I could jump on board with requiring clearly discloser, but the market can help to kick out the ones that practice bad-customer care.
2 Bankruptcy Information // Mar 3, 2005 at 11:58 pm
Bankruptcy law
An interesting post about the impending bankruptcy law at http://blogmasterg.com/life/2005/02/16/bankruptcy.php…