Don't Blame Credit Cards for you Debt
Author: Board Monitor
Posted: Fri Mar 11, 2005 8:58 am
Post subject: Don't Blame Credit Cards for you Debt
A contrarian viewpoint about bankruptcy and credit cards. Bear in mind that the writer is the CEO of the American Bankers Association.
Don't blame credit cards
By Donald Ogilvie
Millions of Americans use credit cards every day to buy gas, charge airline tickets, book hotels and obtain services of every make and variety. The credit card has helped drive electronic commerce and contributed to the success of the Internet. Credit cards allow us to carry less cash and purchase services down the street or around the world. For this convenience, most of us pay very little, often nothing. What a great benefit for American consumers.
Because credit cards are the riskiest kind of loan a bank can make, fees, interest rates and repayment terms reflect that risk. Those of us who manage our overall debt responsibly and make monthly payments on time are not charged late fees or higher interest rates. Those who don't pay their bills on time do wind up paying a late fee, or become subject to a higher interest rate. Seems fair.
But the vast majority of Americans pay their credit card bills on time. Good borrowers are universally seen as good credit risks, and their responsible use of credit means they have access to this safe, convenient means of exchange — at virtually no cost.
Is credit card debt a cause of the increase in personal bankruptcies during the past decade, as some have suggested? No. One South Carolina bankruptcy attorney, looking back at all the bankruptcy petitions in the state over a period of years, found that fewer than 1% of those filings were due to credit card debt. And a recent Federal Reserve study found that credit card debt as a percentage of indebtedness of all U.S. families has hovered at under 4% for more than a decade. Not much change there.
You can read the rest of the article here:
http://www.usatoday.com/news/opinion/2005-03-10-bankruptcy-oppose_x.htm
_________________
Best Regards,
Curtis Arnold
Board Monitor
http://www.cardratings.com
(501) 663-0314
Posted: Fri Mar 11, 2005 8:58 am
Post subject: Don't Blame Credit Cards for you Debt
A contrarian viewpoint about bankruptcy and credit cards. Bear in mind that the writer is the CEO of the American Bankers Association.
Don't blame credit cards
By Donald Ogilvie
Millions of Americans use credit cards every day to buy gas, charge airline tickets, book hotels and obtain services of every make and variety. The credit card has helped drive electronic commerce and contributed to the success of the Internet. Credit cards allow us to carry less cash and purchase services down the street or around the world. For this convenience, most of us pay very little, often nothing. What a great benefit for American consumers.
Because credit cards are the riskiest kind of loan a bank can make, fees, interest rates and repayment terms reflect that risk. Those of us who manage our overall debt responsibly and make monthly payments on time are not charged late fees or higher interest rates. Those who don't pay their bills on time do wind up paying a late fee, or become subject to a higher interest rate. Seems fair.
But the vast majority of Americans pay their credit card bills on time. Good borrowers are universally seen as good credit risks, and their responsible use of credit means they have access to this safe, convenient means of exchange — at virtually no cost.
Is credit card debt a cause of the increase in personal bankruptcies during the past decade, as some have suggested? No. One South Carolina bankruptcy attorney, looking back at all the bankruptcy petitions in the state over a period of years, found that fewer than 1% of those filings were due to credit card debt. And a recent Federal Reserve study found that credit card debt as a percentage of indebtedness of all U.S. families has hovered at under 4% for more than a decade. Not much change there.
You can read the rest of the article here:
http://www.usatoday.com/news/opinion/2005-03-10-bankruptcy-oppose_x.htm
_________________
Best Regards,
Curtis Arnold
Board Monitor
http://www.cardratings.com
(501) 663-0314
posted by CardRatings.com at 4:25 PM
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