Wednesday, May 20, 2009

New Credit Card Rules Could Stop Sucker Syndrome

New Credit Card Rules Could Stop Sucker Syndrome

Trips and Traps Business Model for Plastic Vendors

Personal Responsibility Works With Disclosure, Certainty

by John Michael Spinelli

May 20, 2009

COLUMBUS, OHIO: As the Obama Administration attempts to re-float the U.S.S America, through massive injections of federal largess that will be foisted on future generations as pay-back punishment for the disastrous financial policies employed by the Minister from Midland, a hint at whether their financial skills will be up to the task could be seen soon, as America retools its credit card laws and one Ohio school system realizes equipping young Buckeyes with financial knowledge will better prepare them to enter the sea of financial sharks without being eaten alive.

To understand the deceitful, ever-changing world credit card companies have been allowed to build that places consumers on a game board rigged with financial rapids that bring them great profit while impaling individuals and families with protean rates operating in league with shifting fees, listen to how Harvard law professor Elizabeth Warren describes to Bill Maher the lawful ability lenders of plastic have to put consumers behind the Eight Ball with little chance of escaping in tack.

Warren, who is also known as the "TARP Queen" because she chairs the panel that oversees the Trouble Asset Relief Program, which was set up by Bush Treasury Secretary Henry Paulson who asked for a blank check for hundreds of billions of dollars to bailout Wall Street banks infected by subprime loan securities, says credit card companies make billions by setting "tricks and traps" for consumers, who whether they know it or not, fall prey to the cruel consequences spelled out in their small-print agreements.

But hope is on the way in the form of new credit card laws that, if passed by Congress and signed by President Obama, would protect consumers from sudden increases in interest rates and curtain that one study performed by the Pew Safe Credit Cards Project said "current credit-card practices place American cardholders at risk of sudden, potentially drastic price increases, which can seriously impair a household's stability and spending power."

In a related story Tuesday, the Cincinnati Public Schools announced students from kindergarten through grade 12 will be taught financial education, in compliance with a new Ohio graduation requirement mandate that high school students, starting with the 2009-10 academic year, study personal financeas part of a curriculum that school superintendent Mary Ronan said will "graduate well-rounded students who know how to thrive amind financial challenges."

The Cincinnati-centric Business Courier reported that 25 percent of American homeowners have no savings to cover living expenses if they lose their job. Taken from a a quarterly survey performed by the Wells Fargo & Co, the study says 34 percent of homeowners have "had family or friends move in with them" and that 43 percent "think about their debt every day" while 36 percent say "they're cutting back on small expenditures, such as dining out, buying clcothes an gifts for friends."

Concerned about their members' financial aptitude as much as the CPS is about training their young students minds to know a good deal from a bad one, the American Federation of State, County & Municipal Employees is offering a free one-hour online class, or Webinar, through Union Plus, that will help members avoid credit card fees, understand their credit score and ow to read a credit report, among other topics.

It's never too late to wise up, but full disclosure and certainty are keys to consumers exercising their personal responsibility. You remember personal responsibility, don't you? It was used by banks and credit card companies to shift the blame of deep debt to people who didn't know the rules because the rules were ever changing, at the whim of the companies who extended credit to anyone with a pulse but then shackled them in handcuffs of repayment terms that essentially sentenced them to a debtors prison without bars.

Business advocates have long said that all business wants is "certainty" about the future so they can plan accordingly. The same demand can be used by consumers, who without access to affordable, clear and reasonable credit terms cannot perform as the loyal consumers the economy needs to grow.

Turning the tables on credit card companies seems only fair. Personal responsibility is great as long as the rules and options are clear for everyone. If "Apples to Apples" comparison is good for electric and gas rates, then it ought to apply to credit card companies and all lenders too. An informed populace is a wise populace. Playing Three Card Monty with a stacked deck is inherently unfair and only rewards deception.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. To send a tip or comment, email

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