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February 19, 2008
Credit card debt: a boot stamping on your head, forever
 The McClatchy papers are running a nice story today by Christina Rexrode. The story is titled Your low-interest credit card? Yeah, well ...Some consumers' rates are rising for mysterious reasons. The piece highlights how Bank of America, in particular, is among the credit card companies jacking up the rates of good customers, perhaps because it lost money on its mortgage and hedge fund business recently, but also, of course, because it can:
Some consumers and analysts say Bank of America, which saw profits all but disappear in the fourth quarter, is trying to squeeze money out of its credit card users to make up for disappointing earnings. It's one more reason we need new laws (latest blogs here and here) to ban unfair credit card practices, and, in particular, whey we need to enact rules banning universal default (where good customers' rates are raised due to so-called "external credit criteria," as a BofA flack says in the story) and rules banning retroactive interest rate increases (where your new higher interest rate applies to your old balance, not only to new purchases. Don't even check your account contract, all the bank kids are doing it, and have always done it.)
But what I liked most about the story is the illustration, torn from the pages of George Orwell's 1984:, "If you want a vision of the future, imagine a boot stamping on a human face - forever." If that Orwellian dystopia doesn't best describe both the effect of perpetual debt brought on by penalty interest rates and the attitude credit card companies have toward consumers, what does? Kudos to the unnamed illustrator.
Posted by Ed Mierzwinski at February 19, 2008 09:55 AM
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