Grugger’s Way

Credit cards have become so essential to our way of living that we begin to believe that we could not live without them.

That is so wrong. Credit card companies have been so unregulated for so long that they have become the primary unsecured debt load of thousands of consumers who seek bankruptcy protection.

How credit card companies entice young people, particularly college students, into obtaining and using credit, should be outlawed. The problem is that the credit card companies will issue pre-approved cards to college students without taking into consideration any ability to pay. How can a student without a job other than work-study expect to make monthly payments on debt that will, in all probability, escalate into something far beyond their original expectations?

Concert tickets, athletic equipment, trips, clothes, and dining out are all things that college students find that they suddenly have the means to obtain, if not the means to pay for.

Older people too, are often taken advantage of, with pre-approved cards offering low initial interest rates, no-cost balance transfers, and no annual fees. When a consumer is late with a payment, the credit card company can double or triple the interest rate and they NEVER have to reduced it again!

It is no wonder that these credit card debt-loads last a LIFETIME! For many of us, we see no OUT other than bankruptcy or death. Most of us choose bankruptcy.

Thankfully, at last, there is some action in Washington to control the credit card industry. The primary sponsor of the 2009 legislation is Senator Christopher Dodd of Connecticut. The legislation is called the Credit Card Accountability Responsibility and Disclosure Act, and if passed, would institute controls over the industry, including limitations on how long a company can penalize a customer with higher interest rates after being late or missing a payment.

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