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October 05, 2005 at 08:00 PM
How Sweet It Is
I can’t deny it. I got an inordinate amount of glee from a story in the Oct. 25 New York Times about how credit card issuers expected to take a hit to earnings in the area of $1 billion by year-end because of the spate of bankruptcy filings before the new law took effect on Oct. 17.
If there was ever a case of ‘what goes around comes around,’ this is it. Never mind that once this initial bloodletting is over the card companies will make up for it in spades. My feeling was that this usurious lot deserves everything they’re losing now–and more.
I want to state that I have no personal stake in how much credit card companies make or lose. I’m not filing for bankruptcy and I haven’t paid any credit card interest since Congress lopped the deduction for such interest back in the 90s.
So, why the glee?
The fact is that these card companies deserve to take this hit. They supply money all too easily and seemingly without restraint to people who are well-equipped with the gamut of all-American upscale desires but ill-equipped to afford even Wal-Mart.
Look at it this way: Money is a drug and too many people are addicted. Our society goes after drug dealers with assiduity, but when it comes to those supplying financial drugs, a slap on the wrist (if that) is all that happens. In fact, this law gets harsher with the addicts while abetting the suppliers.
Too many people are in financial quicksand and going under before they know it–and that’s when the screws really begin to tighten. There are all too many people making minimum payments on their credit cards and paying interest rates of 20% and more. And many of these cases arose because people who shouldn’t have been given so much credit in the first place got it with nary an eyebrow raised. In fact the credit card companies were more than happy to oblige. And in many cases it was the financial equivalent of the old potato chip slogan: Can’t stop with just one card.
Yes, I know that people have a personal responsibility to make sure their financial situations don’t get out of control. But what about the responsibility of those who supply financial drugs to those least able and/or willing to resist?
