From the Houston Chronicle:
Credit card companies want it both ways: strict bankruptcy laws but no mandate to disclose how much all that credit is costing consumers.
If the newly wed Smiths charge $1,000 to a 13 percent credit card to finance a week-long honeymoon, then pay only the 2 percent minimum monthly payment, it will cost the couple $632 in interest and require 8.7 years to pay off, perhaps longer than their marriage.
The nation’s financial institutions don’t want consumers to focus on this, the real cost of amassing credit card debt while making only minimum monthly payments. As in the past, the industry is lobbying against proposals that would require they spell out those costs in customer statements.Sen. Chris Dodd, D-Conn., has been pushing for years to pass legislation that would mandate that credit card companies include information in customer statements about how long it would take to discharge a debt by making only minimum payments and how much it would cost in interest.
I will grant you that a credit card bill ought to clearly show the interest rate and amount of interest incurred during the billing period, but how stupid are people these days? Anyone living in this country ought to be able to do the math and figure out this simple problem on their own. Geez.
After all they take out tons of student loans thinking that a college education will get them great jobs and let them pay them off, and then find out that it really doens’t get you all that great a job and you end up using that money to pay for things like food and rent and…oh wait…I should shut up now
Hhmmm…sounds like you’ve done some of the jobs I have!
Well written article but a little niave. Get with the world! Work in a factory with the 18-25 crowd these days and you will quickly learn that they are not only not able to do this simple math they do not want to do it! Quite a few would rather work the social system for support, purchase tattoos with that credit card and use all their cash on alcohol. Think I am kidding or cynical? Think again.
I wouldn’t say naive; let’s go with idealistic. But even that’s overstating it, I think, because 99.99% of the people in this country have been given the opportunity to understand basic mathematics, which is all we’re talking about here. The fact that they don’t have or are too lazy to apply this knowledge doesn’t mean that statement is wrong. Something is wrong, however, and you describe it’s symptoms vividly. What’s at the core of it, though?