All Presidential candidates should have a plan to wean America off its credit card dependence. We collectively owe almost $1 trillion to credit card companies, but only the Democratic candidates have written plans to reform the credit card industry. Alpha Consumer wrote an excellent summary of their competing plans to strike at some of the industry’s most harmful practices.
- Cap credit card interest rates at 30 percent. (The Government Accountability Office reports that 1 in 4 credit cards charges higher rates.)
- Stop credit card companies from increasing rates without written consent from consumers and prevent rate increases because of missed payments on unrelated accounts.
- Require card companies to explain terms and fees clearly to consumers.
- Increase government regulation of credit cards and other credit products through the creation of a Financial Product Safety Commission.
- Create a five-star rating system for credit cards so consumers have a better sense of the fees and rates associated with each card. Card companies would have to display their star ratings with their application materials.
- Write a credit card “bill of rights” that would stop credit card companies from making “unilateral” changes to the terms of cards as well as apply interest rate increases only to future debt. It would also stop card companies from charging interest on fees, something the Clinton plan includes as well.
We are greedy and want elements from both proposals, but consumers would win under either plan. Disappointingly, none of the remaining Republican contenders seem to care about credit card reform.
By the way, if you feel like adding to our $943 billion revolving tab, all campaigns accept contributions by credit card.
The Democratic Candidates and Your Credit Cards [Alpha Consumer]
(Photo: Getty)
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@Mojosan:
HAI ERRYBODY MY NAME IS MOJOSAN AND NOT ONLY DO I LIEK TO USE MAH CREDUT CARDS BUT I ALSO LYKE TO TELL ERRYBADY HOW MUCH MAH INCOME IS LOL. (ITS LIKE HALF A MILLION DOLLARS). LOL IM SO RICH U STUPID BITCHESS. LOL.
(give me a break)
I’m in favor of regulation. The credit card industry is another bubble waiting to burst and if the government just sits on their ass, the mortgage crisis is going to be a joke next to this. Just consider not everybody bought a house in the last five years but almost everybody has a credit card. And each day more people are digging themselves into more debt.
@Mojosan: Considering how well it worked telling people to diet and exercise, do you think that telling them to pay up their bill in full every month is going to work?
1. The average American is too stupid to manage their money properly imo. This could be fixed by several things. a. teaching starting in GRADE school fiscal responsibility, tax law, savings/investment, etc. b. the federal and state governments creating systems by which people can only take ‘so much rope’ thereby preventing them from hanging themselves (and their families and our collective economy) due to their stupidity.
2. The average business is rightly out to make profit, and as much of that as it can, whilst avoiding fines/jail.
Mix #s 1 & 2 together, and you get an often explosive mixture. What government SHOULD be doing, rather than padding its own pockets and that of its special interest groups, is PROTECTING its citizens, if even from themselves.
People should be made to pay their ARMs back all the way, even if it takes them a lifetime. People should be made to pay off their CC debt, again, even if it takes a fucking lifetime. Only be REQUIRING citizens to be responsible (by making them FACE the consequences of their choices/actions) can we truly educate them.
I’m not for either Democrats OR Republicans. The 2 party system sucks my BALLS and I’m sick of it. We are left with 3 unacceptable choices at this point.
Hillary? Good God in heaven, she and her husband are big fat liars and may have had business partners killed off in the past. FTW are we thinking about by even CONSIDERING her as a possible candidate? But then again, I said the same about Bill in 92 and again in 96.
Obama? He gives good speeches, and he’s GOOD at pointing out our problems, but he still hasn’t provided ONE SIMPLE FUCKING plan to fix our broken country. What a perfect politician! What a d-bag!
McCaine? Whatever. I used to be Republican but Dubya fixed that. I’m still more conservative than liberal (mostly because I have worked my fucking ass off to make something of my life and I’ll be DAMNED before I give more of my hard earned $$ to lazy fucks on social welfare!!) but lets be serious:
We need to start looking at individuals ISSUES, and deciding on THESE one by one, rather then sign up for a whole party platform. We HAVE the ability to do this – we have the ability to form the most democratic process the world has ever seen, one in which people are awarded the right to vote NOT just because they are citizens, but because they have, in a quantifiable way, contributed to the society in which they are casting their vote in. People who contribute more would have votes that carry more weight. We no longer need Congress. The internet would allow us to vote on each issue as citizens. We have the ability, but no one has the BALLS to make this happen. What a f$#@ing shame, I did so love this country 20 years ago. It’s falling apart at the seams nowadays, and I fear there’s nothing we can do.
eofm.
It’s all fiat money anyway. And it’s getting more fiat all the time.
When food and gas increase at a faster rate than salaries, people will
rely on what the Good Times theme called ‘easy credit ripoffs’. While
it’s touching that a few of you internet bootstrap conservatives can
posture like experts in money-management, you’re only a crisis or two
away from being in debtors’ hell. Punishing people for getting suckered
into plastic won’t solve the problem — which is that these banks,
which held total advantage in bargaining power, roped a nation [except
for a few people here] into relying on credit, then changing the terms
to where the debtors’ obligations simply could not be met. The credit
card companies have acted unconscionably, and if they’d been tighter
with their credit lines, they wouldn’t face so many bad debts.
@cef21:
Universal Default should be covered under RICO or price fixing schemes.
It would really bum me out to see anything from McCain on this issue. The President of the United States has no business becoming involved in credit card business practices. Those who want a nanny state to protect them from their own stupidity and/or lack of personal responsibility would doubtless disagree.
America is a car and debt is its engine. BUY BUY BUY!
What happened to requiring the CC companies to print on the front page of your bill, how long it would take to pay off your current balance if you make the minimum payment?
They were talking about this a few years ago, and the bank/CC companies talking head in DC said (in a television interview) something to the effect that consumers “aren’t really interested in that kind of thing.” When asked ‘wouldn’t that give people incentive to pay more than the minimum’ this guy just stuck to the canned response ‘consumers don’t want that.’
Can we get back to more important issues, like being required to show a receipt when I leave a store?
The only thing our politicians (from BOTH parties) care about is power and money. Oh and subjagating and taking away the rights of Americans.
This country is done for.
@maikur:
Whoa. Whoa. Just hold it right there.
You mean to say that a Senator can sponsor a bill to legislate precisely what they proposing?
If you pay off your credit card balance every month, then you don’t pay any interest on a credit card. Credit card companies loan out a lot of money at 0% interest to customers who pay off their balance every month, which isn’t factored in to the reported interest rates. Government regulations forbid credit card companies from reporting the true rate of interest charged on all moneys loaned. Credit cards are a great product when used responsibly.
@francoamerican:
Usury’s a sin? Great to hear. Since you truly believe that, head on down to your local payday loan place and tell the people walking in that you’ll loan them money at 10%. See how well that goes for you.
The free market’s all well and good, but it only works when consumers have enough information, and a stable set of comprehensible rules, to make intelligent decisions. As scandal after congressional hearing after consumer expose shows, that’s not the case.
Other than a half-assed defense of universal default, so far nobody has addressed the items in cef21′s list of unfair items. If there’s no valid reason for a practice, then obviously the practice itself is invalid.
What consumerist doesn’t understand is the republicans don’t debate on it, because republicans want free markets and less government regulation. To even comment on it, is to be a liberal. But as an internet blog, i expect this to lean left. Although the topic of this blog, educating buyers, is a conservative idea. A liberal society wouldn’t need this blog because there would be 5 gov officials regulating every business.
How about we limit the number of mailings each credit credit operator can send us each month. I am averaging at least fifteen a week….including Capital One which sends one every week….even my dog has gotten one in the mail
This is a very interesting issue / conversation. If the government wants to stimulate the economy I would think that consumers having lower interest rates would be of great interest to the government.
The commenters who believe these plans have a chance of in hell of passing are incredibly naive. Even if either candidate broke free from their corporate handlers long enough to introduce a bill with these reforms, Congress, who has also been bought off by corporate interests, would never let it pass.
@HooFoot: You are boiling all the hope out of me.
[b]Sorry to inform everyone, but they’ll always be stupid people in the world. No matter what the gov’t does, people are still going to do stupid things[/b].
Get used to it.
@cef21: While I do agree that there are dems that have been bought off by big business, your statement about them changing things tomorrow if they wanted is COMPLETELY inaccurate.
The fact is is that they hold a majority, but only by a very small margin, much less than what would be required to override the repubs in the house and senate AND… any bill they send through would be vetoed by President Retardo anyway… requiring two-thirds to override, which they definitely don’t have. People that make statements like yours have no concept of how our government works…
@nikalseyn: Gotta love this “personal responsibility” bullshit. I hope you incur some devastating medical loss that causes you to go into deep debt. If you’re married, hopefully it will be your spouse that becomes extremely ill and not only mounts up hundreds of thousands in debt, but also loses their job as well.
People that talk about person responsibility usually have never had anything really bad happen to them.
And for the record you retarded repukes… it’s been those stupid people living beyond their means that has kept the economy going for so long since middle class factoring jobs have disappeared in this country. When the CC industry crashes, it will take us all with it.
@balthisar: Yeah, they’d rather get into vital government issues like forcing a brain dead woman to remain on life support and banning homosexual marriage… God the people that claim to be repukes are such idiots.
@balthisar: you can’t be serious. do you honestly think that republicans stand on the sideline while democrats regulate the shit out of everything? do you read a fucking newspaper?
sorry to drop the f-bomb, but get_fucking_real. washington is stealing your liberty & it’s not party-exclusive. that city is like scrooge mcduck’s money vault & everyone’s swimming in the loot. the only legislation that gets passed these days tightens the noose a little more.
you can bet your sweet ass that any bill remotely related to credit cards passed by a republican OR democrat controlled government will tip the scales even more against the common man. it can’t be helped – it’s what they do.
@mac-phisto:
You’ve got it right. The difference between the Democrats and the Republicans is like the difference between Coke and Pepsi. A lot of hoopla and bickering when they are pretty much the same.
Actually, UWisc did a study where they gave a group of welfare participants some guaranteed annual income and another group got no such thing. The group that was on an annual guaranteed income was off welfare MUCH quicker than the group that wasn’t.
As far as pseudosocialism goes, Sweden and Norway have the highest standards of living in the world. And people aren’t bitching about their high taxes because if they were to lose their job or something, at least they’d have a roof over their head.
@cef21: WROOOOOOOOOONG!
Democrats do not control the Senate. They don’t even have a majority in the Senate. If they controlled the Senate, Bush and Co. would be in prison so fast you’ld never see it coming (and probably scream “Police state!” as actual criminals get hauled off to jail).
Because the same sort of fools who think Democrats control Congress think there’s no difference between the parties. Oh, but there is. Just read the fucking article. it’s right here on this web page staring you in your clearly uncomprehending eyes.
Republican leaders must know their brain-dead cultists never fact-check. If they did, that party (cult?) would collapse overnight.
Greed+Stupidity=Disaster. When the national credit card debt s*** hits the fan we all going to pay. The spending that keeps the economy going -and possibly your job- is based on a trillion-dollar consumer debt. I don’t like government nannying, but if I’m going to be affected because of others’ fiscal irresponsibility, hell yea! Same as we’re all going to pay for our government’s fiscal irresponsibility. If McCain doesn’t have an answer to the looming disaster I can’t trust him with my vote.
Lookie here… The Ruskies are restarting the cold war, we need more credit card debt to pay for it. Wha’sa matta with u guys?
A credit card “bill of rights” is a great idea. The second amendment ofcourse being, the right to bear debt. And with the Obama Michelin Guide to perpetual debt, one can determine which company one wants to go bankrupt with. “Oh look honey, Visa has three stars, a knife and a fork.
@nikalseyn: ppl should be accountable for their actions, but what I like about this is that it protects smart, responsbile consumers too.
As we’re seeing with the real estate market, total lack of oversight and uneducated, irresponsible consumers can affect us all. If you had bought a house you could afford with a prime mortgage and always made your payments, everyone else’s stupidity and risk taking would most likely leave you know with a devalued property, affecting the equity you deserve.
I’d like to see more proposals, like the one in TN, to make personal finance a mandatory class in high school.
Credit card companies make far more money off of consumers who are unaware of the pitfalls of using credit to pay for expenses, than they do off of people who pay on a regular basis with low interest rates.
It is a fact, that if the credit/bank industry didn’t have uneducated/uninformed customers, they could not survive on “good clients alone”.
It is the predatory nature (aka capitalism) of most business in the United States that maintains a severely lopsided economy. Since our country is built on Capitalism and then Democracy, we are essentially screwed!
@ClayS:
Assuming a generous 2% cashback, you are putting 60k on that card. REALLY hard to live within your means there. chief.
@redheadedstepchild:
Business expenses; I’m self-employed.
Government intrusion in my life to help prevent corporate abuse? With what’s going on in the unregulated housing/mortgage markets, I think I’ll be able to deal
[sticksoffire.com]
You already have all the rights you need: scissors or a blender.
You heard the democrat’s plans and should check out Ron Paul’s plans, but for now study Spamtasticus’s credit fix plan:
Short Plan:
1). Pay Cash
2). Only buy what you can afford.
Long Plan:
1). Go to the bank (specially if it is BoA or HSBC) and withdraw all your money as cash.
2). Buy a safe and hide it well in your house.
3). Put cash in safe.
4). Buy gun to protect yourself and your safe. (if you have kids be smart and educated them and lock the gun)
5). Pay cash.
6). Only buy what you can afford.