The American business model has reached an age of the financially gross. In a time when consumers are slammed by unemployment, real-estate bursting, seemingly exponential inflation, and a rising cost of living, the corporate conglomeration of American creditors has found a way to kick customers while they’re down.
Last May, President Barack Obama tried to ref in this one-sided fight signing a bill that prevents credit card companies from abrupt interest rate hikes. Ten months ago this bill was touted as a critical bill that would provide help to millions of Americans struggling with credit costs. That belief has since been abandoned.
Credit card companies use to make profits, in a fiscal nutshell, in much this way: they would extend lines of credit to consumers that needed money most with the knowledge that these consumers would likely struggle for years to pay back loans they should not have received in the first place. Once creditors had lured customers into their ring of fire they would use cunning tricks like charging account fees, over the limit fees, maintenance fees and by raising interest rates often without warrant or warning often further trapping customers that were already struggling. “And down he goes… 1… 2… 3…”
For many customers these added burdens made debt too difficult to manage, causing missed or late payments. Some stopped payment altogether because they were faced with the choice of paying for heat, rent and food, or pampering the pockets of credit card companies. In response to these intermittent payments creditors would raise interest rates to astronomical levels- further burying consumers and leaving many in a cycle of debt that is nearly impossible to escape. “4… 5… 6… and he’s still down!”
While these new laws do effectively stop credit card companies from sucking the blood of American consumers through the fangs of interest rates they have not prevented the backlash from America’s creditors.
Companies have made it far more difficult to obtain credit, created new fees, lowered available balances, and terminated millions of accounts.
“7… 8… 9… this could be it!” Struggling American consumers are lying with their faces pressed against the mat, awaiting a final slap that seems all but imminent.