Structuralism

From Ex-bankers on pushing customers to rack up debt - CNN.com:

“Americans now carry $850 billion in credit card debt. Consumer groups are lobbying Congress to include better protection for credit card holders, demanding legislation to prevent what they call unjustified interest charges and deceptive practices, especially in light of the massive financial bailout now being considered.”

This article has some interesting comments from two women who worked in the MBNA call centers on the how they were instructed to push hard for card holders to max out their cards. This whole issue needs to be addressed now because this is the second credit crisis looming. There is no question that much of this debt will cause bankruptcy for card holders, and while it will not be as severe as the current crisis, it needs to get dealt with proactively.

As a rule, I dislike government intervention, but the credit card industry really cannot be called anything besides predatory. There are tons of cards marketed today with interest rates over 25%. Is there ever really a case where a loan needs over 15% to make it a good investment for the lender? I think we need a simple rule for the industry that caps interest rates at prime + X for some reasonable value of X (10% or 15% seem likely). That would at least lessen the number of people who got completely crippled by credit cards.