Credit Cards Make Appearance on Campaign Trail
Sen. Barack Obama, the presumptive Democratic Presidential candidate, lambasted credit card companies’ marketing tactics yesterday in a speech on the economy (“Obama Says Card Issuers Trick Consumers with Unfair Practices,” June 12).
While not specifically proposing any new legislation, Obama noted that card industry lobbyists were having undue influence on consumer laws. He cited the bankruptcy reform of 2005 as a prime example.
And maybe he has a point, after news of card marketer CompuCredit’s troubles with the FTC and FDIC.
But what impact would increased consumer notification have on the marketing of credit cards anyway? Most Democratic proposals seek not to drastically alter terms of contracts or impose additional taxes or regulations on card companies. They seem to be more in favor of additional disclosures to consumers regarding minimum payments and “plain language” explanations of terms and conditions.
So what kind of effect would new laws stressing simpler consumer communication have on the extension of credit via cards? There seems to already be plenty of card debt out there, and I seriously doubt Americans would suddenly give up their lust for credit spending. What do you think?
Below is a snippet of the speech yesterday provided by CNN.
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Comments
Comment from Fran Fisher on June 12, 2008 at 12:46PM EST
Whatever happened to the concept of individual responsibility? Yes, the card issuers make their offers tempting & attractive, that's their job as successful marketers. But no one is being forced to apply for these cards, charge them to the limit, or pay them late. Those are all individual choices that have consequences. The problem is that, once the consequences happen (fees, credit reports, etc.) the consumers who CHOSE to abuse their credit then blame the issuers, who trusted them to live up to their agreements in the first place, because it's easier than facing their own shortcomings. And hopping on the bandwagon is great for politicians because being for the little guy against big business always gets great press coverage!
Comment from Anonymous on June 12, 2008 at 1:34PM EST
Fran - I think Obama conceded many of your points at the beginning of that clip. And I agree that consumer irresponsibility is more to blame than "confusing credit terms". But I agree with the post that changes in disclosure language will have little impact on people getting credit cards. Now if he starts proposing forced changes to credit terms or interest caps or whatever else, then things change a little.