30 May 2010

The Credit Card Industry

The Washington Post has a revealing look at the problems of the credit card industry. Essentially, they handed out too many cards to too many overextended borrowers, and then got used to raking in vast profits with unpopular and predatory practices. Comes a reckoning. Here is a bit of the article:
"Millions of American families can't pay off their credit card bills right now," said Warren, who estimates that they're spending $100 billion a year on fees and interest-rate payments. "Are their economic lives better off because they are spending the hundred billion? I don't think so."

There has been a bit of a backlash:

Credit card customers, meanwhile, are still furious after years of rising rates, snowballing fees and less time in which to pay their bills. Citigroup's Galant, who took over in April 2009, gets hundreds of e-mails a month.

"They are angry at us; they are angry at the system; they are angry at the government," he says. "All they want to do is get back to a peaceful existence."

By nature, faith and upbringing I am almost constitutionally incapable of NOT paying off my credit card debt by the month. Nevertheless I am doing my best to relieve the industry of my little share of their profits: I have begun to use my cards as little as possible. Why should 3-5% of each purchase leave my community and fly off to a big bank?

btw, did I mention my belief that faith in all our elites and institutions dissolved during the Double Aughts? Lately?

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