Barack Obama Credit Card Bill of Rights

[thekid]

It's a voluntary contract. If you don't like the terms or think that they are unfair, then don't use credit cards. The credit card companies don't have the power to force you to use their cards.

Okay, lets see. Freedom of contract theory is based on the assumption that enlightened parties can reach a negotiated agreement which is binding upon them. This is fine and dandy.

However in certain types of consumer contracts, such as those between an individual and a large financial institution which grants an individual a credit card, terms are not much negotiable. This is sometimes called a contract of adhesion. You either enter into it or you don't. People always have the option to not enter into those contracts. However, whenever you have such distortions in power between parties or whenever a market player has dominance over a particular market, abusive terms/prices can appear without much recourse. This is a breakdown of normal free market economics. Competition, in one case, and negotiating power, in the other, is taken out of the normal equation. Regulation that basically says "because your particular situation makes you invulnerable to regular market forces that would keep you honest, here are some abusive practices that you can't do". I fail to see the problem with that.

My ideal here is protecting free market economics. Oftentimes that's done by non intervention, sometimes particular situations calls for some levelling. Having powerful parties imposing abusive terms is not a free market.

I would take this out of usual sentiments that "credit is bad", or "I'm careful so, ha, take that". It's not about making the load lighter for bad credit consumers. It's simply about making credit terms non abusive for everybody.

[bjl584]

I've used credit cards for years and have never been abused or taken advantage of. The reason is because I am responsible with them and I pay the bill on time. That is really all one has to do to not have unfair terms or fees placed upon them. Good customers are treated pretty well by the card companies. If they weren't, they wouldn't have any customers. That is truely a free market concept. I don't like the idea of the government stepping in and violating contract law. The government has the power to change the rules in the middle of the game more than any corporation ever could. I knew full well getting into the situation that if I wasn't responsible and I didn't pay my bill, that there were going to be consequences. I would argue that everyone else knows this too. I don't think that defaulting on credit cards and then asking the government to bail you out has anything to do with allowing the free market to work.

[Exile]

I've used credit cards for years and have never been abused or taken advantage of. The reason is because I am responsible with them and I pay the bill on time. That is really all one has to do to not have unfair terms or fees placed upon them. Good customers are treated pretty well by the card companies. If they weren't, they wouldn't have any customers. That is truely a free market concept. I don't like the idea of the government stepping in and violating contract law. The government has the power to change the rules in the middle of the game more than any corporation ever could. I knew full well getting into the situation that if I wasn't responsible and I didn't pay my bill, that there were going to be consequences. I would argue that everyone else knows this too. I don't think that defaulting on credit cards and then asking the government to bail you out has anything to do with allowing the free market to work.

Well, lucky you, bjl584. I too can now and do pay may card balance in full. But sometimes things happen, such as unexpected emergencies beyond the capacity of what responsible people plan and set aside for. Then the card lenders are all over the borrower like vultures on a carcass (interest on fees, universal default, etc). For years that's the position that I was in. I guess that never happened to you, so you can afford to be smug.

Cards often start out with good terms, but then change them later as a bait and switch. Moreover, banks and lenders are a cartel and have an extremely powerful lobby that makes a joke out of the so called free market and anti-trust laws (if there are any still on the books). How can consumers compete with that? Why should one sector be allowed make its own laws at the expense of everybody else?

But don't take my word for it, bjl584. Read American Theocracy by Kevin Phillips who tells it like it is about credit cards, and how they have become a menace to the finance industry.

[DayByDay]

I've used credit cards for years and have never been abused or taken advantage of. The reason is because I am responsible with them and I pay the bill on time. That is really all one has to do to not have unfair terms or fees placed upon them.

I once sent a $5,000+ check to pay off a credit card company whom I had been making small payments to for years. The next month my statement showed the check had not been credited, and I got nailed for a late fee and another month's worth of interest. The company claimed they never received the check. All the other checks I mailed out the same day had made it to their destinations. I suppose it could have gotten lost in the mail, but I doubted it. It was mighty suspicious that it was a huge payoff check that got lost. I read later that the company had been caught discarding many people's checks, so I'm sure I was just another victim.

[thekid]

I don't think that defaulting on credit cards and then asking the government to bail you out has anything to do with allowing the free market to work.

Where is it proposed that the government bail out anybody that has defaulted on a credit card?

[cptacek]

Well, it's not about me. I've never not paid a credit card in full when due and most probably never will. Still, this has no impact on what I find fair or abusive practice.

Allowing a party with dominating negotiating power to impose terms is not free market friendly.

General you. Didn't mean to imply you in particular.

[cptacek]

...there is something inherently unfair about being able to change the terms of a loan agreement midstream...

The terms of the loan agreement STATES EXPLICITLY that they can change the interest rate at any time. They are not changing the terms of the loan agreement. They are doing what they explicitly told you (general you) they could do.

That's like saying that your ARM on your house shouldn't reset. Oh wait, lots of people are saying that.

[jc3900]

All I have to say is that I don't trust obama one bit more than mccain or clinton. I was watching larry kudlow's show a couple of days ago and it gave some bullet points of an obama economic speech. The one that jumped out at me was INCREASE MINIMUM WAGE 3X's its current value. Then you also have to remember that he wants universal healthcare and he wants you(the savers) to front the bill. Oh obama also wants capital gains increased to 28%! He also wants to put higher taxes on dividends and increase corporate income tax. I don't know anymore. Everyone of them clinton, obama, mccain are all socialist. All they want is bigger government and more control of your lives. My gosh look what happened with our republican congress. Spending went through the roof. I say we boot them all out and get someone who has a brain.

[thekid]

General you.

Is that the former chinese military chief of staff? Didn't know he had credit card problems!

[chumlyb]

So much sanctimony on this topic - yeegads!! I think the plan is great and long overdue. Credit card companies have violated what my CPA dad calls the "pig principle" (he uses the term to refer to what will fly on your income tax return and what won't as I remember) - they are practicing usury and their practices have become more and more egregious every year. I find it completely mind boggling that, with a good dash of holier than thou attitude, people will advocate for big business to be allowed to continue their obscene practices at the expense of consumers. I would far rather live in what someone here called the "nanny state" than in a country completely ruled by corporate interests which is the direction we have been heading for a number of years.

[txex86]

The kicker to all of this is that no one is forcing individuals to charge more on their credit cards than they can afford to pay back at the end of a billing cycle. The banks/lending institutions are offering a service to those who chose to borrow on these company's credit cards. Those who choose to use credit cards are responsible for reading the "fine print" regarding their credit card loan (yes, it's a loan) and understanding what they are agreeing to. If they don't comprehend it, then they shouldn't sign up for the card(s) in the first place. Whatever happened to individual responsibility?

[tripods68]

Coming from banking industry, I personally know all banks rely heavily in generating revenues through penalties, late payments, overdraft charges, and transfer fees, etc. Read the fine prints. Banks knows they can count on certain population (usually lower incomes) to pay up to WAZZU! This common practices. Consumers know they can't compete against powerful lobbyists, which essentially write their own laws. This is not about competition. It's all about controlling revenues that banks must count on.

This is not to say I don't agree in personal responsibility. Not at all. What I'm saying this is battle like "David and Goliath" David will lose most of the battles. As consumer we can't fight against powerful lobbyists that "write" laws to benefit their industry. We have so called "consumer watchdog". Their play an important roles but laughable. But this is what consumers been pushing for years.

This proposal is NOT about improving the economy. What Barrack is proposing is about protecting the consumers from exuberant charges that all banks now enjoys while consumers continue to asleep at the wheel. It's about improving the rules of the game that we all are playing. This my friend is NOT about free market competition or the hindering economies of scales that banks would like you to think it. It's about protecting their revenues.

As a fiscal conservative and I no longer carry credit card balances (except mortgage, or car payment). In fact very few Americans can't say, "I don't have any cc debt at". It's rare to find or know anyone in my circle of friends, or families that have zero cc balances. If you're one of the americans that no longer carry credit balances consider yourself lucky. This is why I enjoy coming to this forum because its inspiring to read other people's story (not to sound corny), but in many ways its true. Because much of what I learned and put to practices thus far improved our family budget. Like others who come here looking for advice or read stories, this site has done wonderful things for me. Ok I'm now just rambling on a bit. But i hope you get the point.

[gackle]

Everyone of them clinton, obama, mccain are all socialist. All they want is bigger government and more control of your lives. My gosh look what happened with our republican congress.

While I agree with most of what you said and I dislike McCain the most of all the republican candidates, you statement seems to imply that McCain is for bigger government. I just wanted to point out that with all of his faults, he is one of only a few Congressmen that have not put a single earmark on a bill. I have to respect him for that.

[Exile]

So much sanctimony on this topic - yeegads!! I think the plan is great and long overdue. Credit card companies have violated what my CPA dad calls the "pig principle" (he uses the term to refer to what will fly on your income tax return and what won't as I remember) - they are practicing usury and their practices have become more and more egregious every year. I find it completely mind boggling that, with a good dash of holier than thou attitude, people will advocate for big business to be allowed to continue their obscene practices at the expense of consumers. I would far rather live in what someone here called the "nanny state" than in a country completely ruled by corporate interests which is the direction we have been heading for a number of years.

Well stated, chumlyb. Now for all those "free market" fans who state that the relationship between lenders, especially credit card issuers, and borrowers is equal, please answer the following.

If I want to know my FICO score, which is an essential tool for lenders to determine my creditworthiness, I have to pay for the privlege of obtainig this magic number. So if I don't like this state of affairs, what am I supposed to do? Take my business elsewhere? The problem is that there is no "elsewhere". As in any other monopoly the credit industry has the upper hand in this matter. So just where is the equal relationship here?

[jc3900]

While I agree with most of what you said and I dislike McCain the most of all the republican candidates, you statement seems to imply that McCain is for bigger government. I just wanted to point out that with all of his faults, he is one of only a few Congressmen that have not put a single earmark on a bill. I have to respect him for that.

Wow, big woop, he didn't put an earmark in. That doesn't impress me one bit. Why don't you go look at his tax record. He voted AGAINST the Bush tax cuts. I havn't heard him once address current spending programs either. I guarentee Mclaim won't address one government entitlement program over the entire campaign eventhough entitlements are like 65% of the budget and growing. Right now our future entitlements from these programs is like 53 trillion dollars! However, Mccain the so called fiscal conservative won't even waste his time with facts like these because his a laim piece of crap politician. It doesn't matter if the United States will be bankrupt, the only thing that matters is not upsetting any voter groups so you can stay in office. If the president were a job in the private sector, would we even be considering these absolute pathetic candidates. Cmon America WAKE UP!

To make this post even more political than it allready is: I endorse Ron Paul, the last true conservative!