Really Pissed Off!

I hate being the harbinger of doom, but there is another crisis about to hit the stage, just when you were becoming adjusted to the ups and downs of Wall Street. We’re about to be hit by the Credit Card Crunch, which has been quietly hiding behind the recent headlines. Not everyone was unaware of this, as it was about to take center stage when Wall Street crashed. It’s been riding on the back of Wall Street and is now going to become a major player. Those of you who are ass tight in debt know about it, as the average amount of Credit Card debt is about $8,300.00 per family in the United States. The big question is whether or not it can be paid and what happens if it isn’t?

The total Credit card dept in America is $951.7 billion dollars in 2008. It is up by 8.2 percent from last year and keeps rising. To try to place controls on this pending disaster, the House of Representatives submitted H.R. 5244 in February 2008. It would have amended the Truth and Lending Law. It was sponsored by (D) Rep. Carolyn Maloney of New York and was commonly known as “The Credit Cardholder’s Bill of Rights.” This bill would have ended unfair interest rates, allow consumers to set credit limits, end unfair penalties for those who pay on time, require fair allocation of interest rates, thus eliminating doubling up, eliminate due date gimmicks, establishing a standard definition of “fixed rate” and “prime rate”, eliminate “sub prime” rate cards of over 25 % to low income consumers and to ban the issuance of credit cards to minors who have no visible means of paying them off. I don’t believe than anyone with half a brain would find this unreasonable, unless you’re one of those bastards who works for the banks and keeps sending me credit card offers every day! The Bill was finally voted and passed in the House by a 312-112 vote on September 23, 2008 and the passed on to the Senate.

H.R. 5244 appears to be tabled by the Senate and will probably die there. There are no plans to move forward on this Bill in the Senate and to add insult to injury; the Bush Administration opposes the Bill. In a statement on September 22nd, the White House announced that the Bill "would restrict when lenders may change terms of the credit agreement, significantly constraining the ability of financial institutions to adapt to changing credit risks and market conditions," In other words, don’t screw with the banking industry! What the White House and the Senate apparently don’t realize is that this is the other show that’s going to drop in their attempt to secure The Economy! Last year, over $27 billion dollars of credit card debt went up in smoke. Next year, the amount may reach $96 billion dollars. Comparing the second quarter of 2007 to the same period in 2008, credit card defaults rose 54 percent. To make it even clearer, $1.00 on every $10.00 will be defaulted on this coming year. Those people who lost their homes due to the subprime mortgages were also maxing out their credit cards, trying to make a go at it. Today, credit cards are being used to buy essentials, as well as using one to pay off another. If no other action is taken, the Senate and the Administration should at least pass and sign the Credit Cardholders Bill of Rights. We were all sold the “American Dream” by becoming consumers. After 9/11, President Bush told the country to “Go shopping!” We’ve amassed ourselves in debt! This time bomb will become another chapter yet to be dealt with as we try to recover The Economy!

NBC’s Nightly News on the Credit Card Crisis.