Why Credit Card Companies are so Mean

[DGuller]

At the end of the day, credit cards are products, and in this country we decided some time ago that we want to have some product safety laws.  We decided that saw manufacturers disclosing that the use of saw results in loss of operator's limbs is not enough, and that the saws should have reasonable idiot-proofing equipment on them.

[DGuller]

But it's not the responsibility of the State to nurse such people.

Otherwise, you can extend that very far.  All adults are presumed to willingly enter a contract verbal or written, unless proven otherwise.  They are presumed to be able to make such choices.  If they are not able to make such choices, then there are a lot of things they can't do...

Assumptions and presumptions are useful, but only until you have actual data.  The actual data, reflecting real life rather than ideals, shows that credit cards are breaking a lot of people.

[Berkut]

Regret already forthcoming.

Why am I not surprised you set up the ad hom as your FIRST step in the argument?

Oh please, what a bleeding heart bunch of nonsense. What are these "predatory behaviors"? how is it predatory to offer someone a deal different from what they have now, when they can simply refuse that deal whenever they wish?

I think credit card companies scouring colleges to sign up students is predatory.  Free market or not, they are in effect crack dealers getting people prone to addiction hooked.

So college students  are "prone to addiction"? Even moreso than others?

Crack, last I checked was illegal. If credit is like crack, then perhaps we should just make it illegal altogether to loan people money. After all, its not like you get to buy crack once you are 22.

I can't really disagree with you here - this is too fundamental to your view of governments as having as its job protecting consumers from themselves. I certainly do not think offering adults credit is by definition "predatory", nor do I want the government "protecting" me from my own decisions.

But I do understand that a lot of people feel that the government is best at making choices for consumers.

It is only predatory if you buy into the assumption that people MUST HAVE MORE CREDIT ALWAYS. Like it is some kind of Constitutional Right to borrow money.

Where am I making an argument for more credit?  I'm closer to the opposite, in fact.

But the law is saying that they MUST continue to give people credit, and more credit, and MORE credit. The companies are not allowed to say "No thanks, don't want to loan to you anymore at the previous rates".

How can a law that restricts the ability of credit card companies to make business deals with their customers be spun as a way to ensure full disclosure? If you want better disclosure, you do not need to pass a law restricting anything, by definition. You just need a law demanding the disclosure.

Actual disclosure, and effective disclosure, are two different things.

Not really, unless you operate under the assumption that others cannot possibly read for themselves, so that "disclosure" isn't really disclosure, because the people involved are too stupid or lazy to understand.

We passed a bunch of laws demanding that credit card companies fully disclose ALL the terms. So now they do, and the bitch is that they are disclosing too much, and it is confusing, so teh way to get them to disclose more is to not let them do things. That is some fine doublegoodspeak right there.

Just because information is out there, somewhere in the middle of large tomes of fine print, does not make for disclosure.

You are really arguing that just because the information is available, it isn't actually available?

Financial agreements are, by definition, complex. We make them so because we want to protect and be protected. That is the very definition of disclosure. If you think there is a problem with companies not engaging in disclosure in good faith, than that can be addressed without banning companies and consumers from entering into any agreements that some politician decides is too complicate for the consumer to understand.

I'm more concerned about people actually understanding the terms.  Sometimes having less things to disclose about ensures better overall understanding of what people are getting into.

Ahh, so in order to disclose things, we cannot actually disclose things, because that would be too confusing for people, so we have to restrict their ability to enter into good faith agreements because if we give them choices, why, they won't be able to understand the choices, because there are too many choices.

So lets keep it so simple that they don't have any choice, and this is what we mean by "disclosure".

Gotcha.

[ulmont]

At the end of the day, credit cards are products, and in this country we decided some time ago that we want to have some product safety laws.  We decided that saw manufacturers disclosing that the use of saw results in loss of operator's limbs is not enough, and that the saws should have reasonable idiot-proofing equipment on them.

Repeal those laws too!  If the people demand chainsaws that don't kick back, the market will provide them with options!

[crazy canuck]

I wouldnt mind my children having to obtain my signature before they get a credit card.  I am going to be the one paying if they cant after all.

[Caliga]

Repeal those laws too!  If the people demand chainsaws that don't kick back, the market will provide them with options!

Actually you can turn off the clutch thingy that is supposed to protect against chainsaw kickback.

I read a story about a lumberjack who did that once, and then his chainsaw kicked and cut through his neck so far that his head almost fell off.  Amazingly, he didn't die even though he had to walk like 3 miles for help. 

[Berkut]

Congress is responsible for passing reasonable consumer laws.

Yeah, they will tell you that all the time. They are responsible for making sure you Do The Right Thing, as THEY decide.

These make sense because 1) monitoring credit card rates is a pain in the ass,

It is? I never monitor them, at all. I simply don't care.

And how is it such a pain in the ass to pay attention to what people are charging you for credit?

I apy attention to mortgage rates, for example, since I have a mortgage. It doesn't seem all that terribly annoying.

and it isn't unreasonable for congress to lessen that burden since changing the rates can be lucrative for the banks (and a failure to notice ruinous for consumers)

It is unreasonable for Congress to restrict the ability of consumers to enter into good faitha greemetns with banks because some of them are too lazy or clueless to pay attention to the fully disclosed terms of their agreements.

, 2) consumers can't negotiate credit card terms, and

Of course they can.

3) there is a sizeable segment of the population that is unfortunately unable to manage their credit card debt and are financially breaking because of it.

There is a "sizeable portion" of the population that suffers from a variety of self inflicted problems. It is not the job of the state to protect them from their own problems, especially when that protection involves infringing upon other peoples rights.

the alternative is truly the Nanny State.

[Berkut]

At the end of the day, credit cards are products, and in this country we decided some time ago that we want to have some product safety laws.  We decided that saw manufacturers disclosing that the use of saw results in loss of operator's limbs is not enough, and that the saws should have reasonable idiot-proofing equipment on them.

I thought credit was like crack - now it is like a saw?

Marty?

[Berkut]

But it's not the responsibility of the State to nurse such people.

Otherwise, you can extend that very far.  All adults are presumed to willingly enter a contract verbal or written, unless proven otherwise.  They are presumed to be able to make such choices.  If they are not able to make such choices, then there are a lot of things they can't do...

Assumptions and presumptions are useful, but only until you have actual data.  The actual data, reflecting real life rather than ideals, shows that credit cards are breaking a lot of people.

Please share this data with us. A "lot" of people? Is that 1000? One billion? How many people have to be "broken" to justify the State restricting the rights of others?

Would 3000 be enough?

[Berkut]

I wouldnt mind my children having to obtain my signature before they get a credit card.  I am going to be the one paying if they cant after all.

Even when they are no longer children?

Why end it at 21?

[DGuller]

Ok, experiment over.  I don't know what got into me.

[Caliga]

Please share this data with us. A "lot" of people? Is that 1000? One billion? How many people have to be "broken" to justify the State restricting the rights of others?

Would 3000 be enough?

If it affects you, it "affects a lot of people".

[Berkut]

At the end of the day, credit cards are products, and in this country we decided some time ago that we want to have some product safety laws.  We decided that saw manufacturers disclosing that the use of saw results in loss of operator's limbs is not enough, and that the saws should have reasonable idiot-proofing equipment on them.

Repeal those laws too!  If the people demand chainsaws that don't kick back, the market will provide them with options!

The flaw in this argument is that you are assuming that credit cards, right now, "kick back" and that if only the State would set up the rules properly, people would not borrow themselves into debt.

I don't think that is the case - people get into trouble with credit cards because they borrow money to pay for things they cannot afford. Then they blame their lack of control on the credit card companies for loaning them the money under the terms they agreed to from the start.

it isn't the credit card companies fault that Americans borrow way more than they make or can possibly pay back. And all the laws in the world shuffling around the deck chairs as the ship sinks isn't going to change anything - but it will make the Nanny Staters feel good about 'doing something" and it makes great political grist - standing up for the little man against the Evil Corporations!

it is pure, grade-A populism.

[Berkut]

Ok, experiment over.  I don't know what got into me.

Nice one DG - sling some ad homs, then run away. Truly a stand up guy.

[Caliga]

  What has Berkut said that justifies that sort of snarky response?