Page 37 - Book1E

Credit card companies are more than happy to help Americans get into debt. In the 1970s, credit card companies began making it irresistibly easy to get into debt. Millions of consumers began using credit cards to pay their way, to pay even their rent and groceries. Promises of “cash back” almost made it sound like the smart thing to do.
According to the Federal Reserve
Statistical Release dated December
7, 2010 on Consumer Credit
(G-19), there is now well over
$800 billion dollars of consumer
credit card debt in America, while
at least half of consumers have less
than $1,000 in assets. In fact, if
you are someone who carries a bal-
ance near the limit of your credit
card, and you pay your minimum
every month, credit card compa-
nies put you in a special category. They increase your limit or offer you new cards because they know they will make money from you. Some borrowers end up defaulting on their debt, but there are enough people who continue to pay the high interest rates month after month to more than compensate for the bankruptcies. For most consumers, acquiring debt is dangerous.
The New Rules for Credit Card Companies have been Good News for Consumers.
If you are struggling against credit card companies that raise your inter- est rate every time you hit a bad financial patch, we have some good news for you. On May 22, 2009, President Barack Obama signed into law the Credit CARD Act (Credit Card Accountability Responsibility and Disclosure Act), which put new rules in place that create controls over the credit card industry, including protecting consumers from increases in interest rates on existing account balances.
Too Much Credit
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