Pay as you go and hope you don't go broke


Congress has targeted the credit card industry
Congress wants to reform the credit card laws. Let's go to the articles. The first one is an editorial from the Detroit Free Press.

Dissatisfied with the industry's response to the disturbing findings of a Government Accountability Office investigation of credit card practices that he ordered last year, Michigan Democrat Levin will hold a hearing in Washington today on credit card fees, interest rates and grace periods, with an eye on federal legislation if credit card issuers don't stop taking unfair advantage of consumers.

True, no one forces you to use plastic instead of cash, but the industry sure does a better job of encouraging it than of explaining the costs. Abusive credit card practices have contributed mightily to consumer debt, especially as credit card use has exploded in recent years.

One of the things I want to stress here is that we are talking about a voluntary contract. Granted, one side doesn't read the fine print, but not all credit card providers abuse their customers. Congress passed the laws that made the abuse possible, and now they want to impose a one-size-fits-all solution.

This bit from the Sun-Sentinal was telling though, especially in light of what I want to talk about,

"The disclosures contained in card agreements are written by and for lawyers with an eye more toward staving off litigation rather than educating consumers," Coleman said. The bankers all said they could make the disclosures simpler.

So now we can agree that the credit card companies and banks are this weeks Officially Designated Nasties and deserve every bit of criticism they get, right?

Not so fast.

As I said before, Congress made all of this possible.

But even more importantly, have you looked at the practices and policies of the Internal Revenue Service lately?

Rather than a voluntary contract, income taxes are an involuntary obligation backed with the threat of force. The IRS has collection procedures that make the credit card companies look like a sixth-grader who just failed his fourth test in a row.

You can change credit card companies, but there is no escaping the IRS.

The IRS gets your money BEFORE you get to see it. Even if you get a refund, you aren't paid interest on that money.

The IRS collects many times the combined amount of every credit card company and bank.

Thanks to Congress and the IRS, your bank is required by law to monitor almost every financial transaction. Since the IRS is not paying for those services, the cost is passed along to you in the form of fees and a lower interest rate. In effect, you are paying your own bank to spy on you and report to the FedGovs.

So now someone tell me, when are the Congressional hearings for taxpayer abuse going to happen? And will they get the same attention that credit card abuse has gotten?

— NeoWayland

Posted: Fri - March 9, 2007 at 05:27 AM  Tag


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