The Need to Regulate the Credit Card Industry
Credit cards have become the driving force behind consumer spending which our economy is based. With the increased use of credit cards, personal debt and bankruptcy have also increased. Among Americans who have possession of credit cards, the average household owes $10,000 says Ronald J. Mann, a professor at Columbia Law School in New York City (cited. in Clemmitt, 2008, p.819). The President of the Counseling Corporation in Massachusetts, Christopher Vaile says, “At least 35 million U.S. households are either behind in payments or over the limits on at least one card (qtd. In Clemmitt, p. 819).” Some unfair and deceptive credit card practices have made it very difficult and almost impossible for some to borrow only what they can repay, or pay back what they have already borrowed without paying excessive interest rates. To protect consumers from unfair and deceptive credit card industry practices that can transform moderate debt into a crushing burden for unwary consumers, congress needs to place tougher regulation on specific credit card industry practices.
Credit card use, debt and bankruptcy have grown mostly among low-income, minority families, and young people (qtd. in Clemmitt, 2008, p. 821). Credit card companies often market heavily to college students and in low-income neighborhoods, offering more credit than people can handle without proof they can repay. In a study done among 50 low income women, more than 90 percent said they received credit card offers regularly, and many of them obtain a credit card in case of an emergency with no intention of borrowing on it, but found themselves using it regularly. “Entering college students are bombarded with an average of eight credit card offers during their first week,” wrote Creloa Johnson. She found that most of the students at Ohio State signed up for a credit card in order to receive a free gift (August, 2007). “Credit card companies have become...