Wondering what the federal government is going to do about the credit card debt crisis? NPR just covered credit cards in a webcast. The session starts with an introduction of everyday people – young adults – who took on small amounts of credit card debt in college in order to cover seemingly legitimate expenses like books, tuition, and minor emergencies. But reliance on plastic turned out to presage a steady slide into mountains of debt, leaving at least one of them holding a university diploma and over $17,000 in credit card revolving balances. Aside from this human face of the problem, they identify some key issues and facts. Some of the highlights from their discussion include:
- 6.3 is the percentage that credit card lenders are writing off of their books due to the problem of collecting on outstanding debt balances from consumers, and it is expected to rise to as high as 9 or 10.
- New York Congresswoman Maloney, working on Congress’ upcoming Credit Cardholder’s Bill of Rights, criticizes the consumer-credit card lender contractual system underlying the crsis, highlighting the transient terms of contracts that undermine consumers, including the hiking of interest rates on a whim.
- How credit card debt problems negatively impact one’s life in myriad ways. Not resolving credit card debt issues will invariably lead to credit score ruin. We’ve already covered some of the more far-reaching impacts of low credit scores.
- The NPR correspondent quotes the Federal Reserve’s description of credit card lenders’ practices towards consumers, describing them as “unfair, deceptive, and anti-competitive”.
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