Credit Card Companies May Get Slapped by Congress

Monday, March 4th, 2019 (No comments yet)

Will Congress act on a predatory credit card industry?

(Image used under: Creative Commons 3.0 [SRC])

Consumeraffairs writes that congress may take a look at the credit card industry and how it's been hurting consumers for years. They talk about the practice of assessing fees for anything and everything, but don't forget about those difficult to understand agreements:

"Anyone who has ever tried to read a credit card agreement knows that the terms are simply incomprehensible," Warren said. "The inserts sent along with monthly bills to amend the card agreements are filled with language even a lawyer would have difficulty parsing."

It's as this point that some would say "well, if you don't understand it, then don't sign it". That's great in theory, but how many things in life actually work that way? Do you completely understand all the terms and conditions when you bought your car? Bought your house? Signed up for your last web service? People have a right to simple to understand terms and conditions for everything they do. Not everyone is a lawyer and even they don't want to read pages and pages of crap just to open an account with a retailer.

Most of all, the expert witnesses emphasized the willingness of banks to lend to just about anyone as a prime reason for the explosion in consumer credit card debt.

This is called "Predatory Lending" and is similar to sending wine-of-the-month brochures to a list of Alcoholics Anonymous attendees.

"To make the assumption of debt more attractive to these households -- and to entice them into carrying debt for longer periods -- creditors lowered minimum payment balances from around five percent of principal to just over two percent," Manning said.