InTheNewsCreditCardSystem

During SessionFour011 -- Creating and Sharing a Diagram of Effects, the participants did a diagram of effects for a credit card system.

PBS's Frontline, whose research I respect and whose shows I enjoy watching, will broadcast the Secret History of the Credit Card tonight, Tuesday, November 23.

Some facts:

an estimated 90 million Americans carry a monthly credit card debt
the average card-carrying American family owes a record $7,500 on their credit cards.
The credit card industry generated record profits of nearly $30 billion just last year.
twenty-five years ago the banks eliminated the restriction on the interest rate a lender can charge a borrower
the terms and conditions of the credit card can be changed at any time for any reason with fifteen days
Banks are raising interest rates, adding new fees, making the due date for your payment a holiday or a Sunday on the hopes that maybe you'll trip up and get a payment in late
The industry operates without fear because there are no regulators

I suggest reading the following:

New York Times (requires registration to their web site but it doesn't cost anything):

http://www.nytimes.com/2004/11/21/business/21cards.html

And the PBS posting --

SteveSmith 2004.11.23

Thanks, Steve. It was on late here, so I taped it and watched it last night. Pretty scary stuff. I mentioned it to someone who told me that one of the department stores here has just dropped the minimum payment from their credit card. I am keeping the tape and passing it on.

SherryHeinze 2004.11.27

Sherry, I wonder what the interest rate is that the department store charges?

The most powerful force in the universe is compound interest.
--Albert Einstein (did his friends call him Al?)

SteveSmith 2004.11.30

I have been waiting for my bill to come in to check the interest rate. I show a minimum payment, and an interest rate of 28.8%, which is why it gets paid immediately. And we thought the banks were bad! SherryHeinze 2004.12.14

Updated: Tuesday, December 14, 2004