Thursday, April 23, 2009

Pressure on Credit Card Companies

I am so frustrated with Obama and the way that he pressures people and companies into doing what he wants them to do. First of all, it seems like he's just power hungry and wants to force himself upon more American companies. Second, I feel it's just another way of saying "the government will take care of you" and that is the exact opposite of what a free country is.

Third, I am frustrated with the American people that promote him doing so. I keep seeing American's saying things like "It's about time we cracked down on the credit card companies". The fact is that credit card companies have been strictly regulated since at least 1970. (

I'm not saying that all credit card companies never do anything sneaky or take advantage of their customers. But, 90% of the companies (particularly the large ones that Obama met with today), follow the laws and regulations to the letter. They know that if they do not, they will incur large fines and/or lose their businesses.

For the most part the recent raise in interest rates and fees are all legit. If you default on a payment, they raise the rates and/or charge a fee. If your credit score changes greatly, you're a higher risk & your rate goes up. With the economy in the state that it's in, pretty much everyone is a higher risk.

Then theirs the fact that we're told spend, spend, spend - not to spend wisely. This causes defaults on debt, which the credit card companies have to get back in some way - taking it from those that WILL pay. That's the way all businesses work.

The Bible says not to borrow money, not because God says "That's Wrong", but because that's what is best for us. So we don't end up owing more than we can pay - which is the position that all these that are upset with the credit card companies are in. I have read report after report that the credit card company has said "Your rates are going up and if you don't like it, you can close your account". Then close your account. If your answer to that is that you don't have enough money to pay off the card, you're living beyond your means. Sometimes, when you make bad decisions, you have to suffer the consequences of those decisions.

I do understand that there are those that have lost there jobs and are using their credit cards to get by. It's unfortunate that they are in that position and I commend them for doing what they have to do to take care of their families. But the fact is that 80% of Americans have at least one credit card and the average debt they have on those cards are just over $10,000. This is not people using their credit cards to get by in hard times. This is spending beyond your means.

I can see both sides of the issue on this one, but it seems that all congress can say is "The credit card companies are evil". Just like they did with AIG executives. I say that credit card companies do need to be regulated (though, I debate in my head weather this regulation should come from the free market or the government - I'm really not sure), but more than that, the consumer needs to be held accountable for their actions.

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