Giving Credit Where It’s Not Due
Since credit cards are on our minds today, let’s take a closer look at this little item: One of the bankruptcy experts over at creditslips was taken aback by the amounts of credit card debt listed on recent bankruptcy filings he was looking through. Soon enough he came across a jaw-dropping total for credit card debt piled up by a single consumer: $175,862.27.
The debtor had 25 cards, from 12 different lenders. Nine cards came from a single lender, Bank of America. The debtor earned $85,000 in post-tax income. We don’t know why the debtor ran up so much in credit card bills, but let’s assume that, regardless of the reason, there’s just no excuse.
But that hardly leaves lenders off the hook. What kind of business issues all those cards to a single consumer and approves all those debts? What was Bank of America thinking? Isn’t this just like the relationship between a dealer and an addict? How do credit card companies continue to get away with this kind of behavior?
It’s great that Congress says it wants to curb credit card abuses. Don’t believe it until you see it. Lawmakers tend to grab good publicity for saying they’ll take on credit card companies, and then they don’t follow through. The financial services industry has a powerful lobby, and it contributes generously to both parties.
And that’s how a consumer addiction to credit continues, unchecked.