Congress in Debt- To Credit Cards!

[MsTryska]

By Selena Maranjian (TMF Selena)
September 21, 2005

Many of us have written letters to our representatives in Congress. Vote against lotteries, we urge. Please support aid for developing nations. Protect the Snittle-nose Prandicoot's environment. Some of us may even have written asking Congress to help Americans who are drowning in credit card debt or who might one day become entangled in it. We probably don't imagine that our guy or gal in Washington can really relate to the yoke of debt, but it turns out that many can.

"More than 40 members of the House reported carrying at least $10,000 in credit-card or charge-card debt in 2003 and parts of 2004," says Josephine Hearn of The Hill, citing a survey of financial disclosure reports conducted by the publication. That sounds like a lot, but it's less than 10% of House members. (Only one Senator, Norm Coleman, R-Minn., made the list -- he and his wife owed between $10,000 and $15,000 on a joint American Express (NYSE: AXP) card.)

How does this rate stack up to more average Americans? Well, Hearn cites these figures: "About 51 million households carry credit-card debt at an average balance of nearly $12,000, according to cardweb.com." I've seen -- and cited -- similar statistics myself. But I recently ran across some interesting contrary statistics, from Liz Pulliam Weston at MSN Money. She found that: "In reality, most Americans owe nothing to credit card companies. Most households that carry balances owe $2,000 or less. Only about 1 in 20 American households owes $8,000 or more on credit cards." (Still, that's a lot of people, and a lot of debt. If you or anyone you love are mired in it, our Credit Center can help you dig out. We can also open your eyes to how the credit card industry works -- it's pretty interesting stuff!)

http://www.fool.com/news/commentary/2005/commentary05092102.htm

[sui generis]

1. oh yeah, credit card = bad bad bad

If you can at all avoid using credit cards for anything or for longer than a one month balance you should do it.

As a former industry insider myself I can tell you that YOU, little people, exist to be harvested, no matter what they tell you in the pretty colorful brochures. If there is any way to show that you are a credit risk and therefore should pay at the highest, riskiest rates, the industry will contrive it, in cahoots with the credit reporting agencies. Therefore, the people with the least need for credit get the best rates, or sometimes even Zero percent interest deals, while the people who can least afford it are pegged to prime-plus for the remainder of their lives. This is not a matter of "living beyond one's means" -- it is flat out predatory, and you are the prey.

In fact if there was a way for the credit card companies to make it illegal to not carry revolving debt, they would be trying to write it into the U.S. constitution, and that's not a joke.

I have sat in board meetings (as a consultant) where the most extraordinarily callous plans were discussed, in the most extraordinarily callous terms. Believe it, they are NOT your friend and we need to fight them and the elected officials who support them with every bit of strength we can muster.

[MsTryska]

2. tell me about it.....

I haven't had a credit card since 1994? maybe?


I've held an Amex - but that's about it.