The R&Rs of CCCs
The issue of credit has been hard to avoid lately as we tread through this economic crisis. Once recent initiative set forth by the Obama administration, having to do with consumer credit, caught my attention. It deals with new rules and regulations on credit card companies (we’ll call them CCCs for simplicity) and it’s meant to protect the consumer from unfair credit issuer practices.
One of the main facets of the proposed “credit card users bill of rights” is the stipulation that credit card issuers be limited in the amount and frequency with which they can raise interest rates. I don’t know about you, but every agreement that I’ve signed with a CCC has always stated that the credit card issuer reserves the right to raise interest rates at any time without notice. Does the government not think that we read these agreements? Maybe some people don’t. Those are likely the people that would welcome an initiative of this kind by the current administration.
As a customer of a CCC, you are already entitled to certain rights…they’re clearly stated in the agreement or contract you sign when you initiate your business with that company. For instance, you have the right to cancel your card, to dispute a charge and to pay your balance through any method you choose. You even have the right to not pay the full amount of your balance, as long as you pay interest on the difference. The rights of card owners, and rules they must abide by, vary between CCCs (this is why the consumer should do his or her research before deciding on which card to choose). Varying rules and rights encourage competition between CCCs and force them to accommodate the consumer to gain their business. A good example of this is the plethora of rewards programs that CCCs have implemented over the past decade, and how that has become a major consideration for most consumers when choosing a credit card that suits them.
Owning a credit card is not a right…it’s a business agreement. The borrower signs up with a CCC to purchase a service. The terms of that service are spelled out in the agreement that the borrower signs before any service is rendered. If either party fails to uphold their end of the agreement, the other party can seek damages in a court of law. It is the duty of the potential borrower to read the agreement they sign and know the stipulations of being a credit card holder with the company they choose. It is not the government’s job to protect the willful signer of a contract that:
a) can’t read
b) doesn’t understand what they’re reading or
c) doesn’t care to read what they’re signing
The problem is that some people within the government, and some of the citizens that elected those people into office, feel that the above is the government’s job (some would even say their duty). I guarantee you it is not. The government exists to protect people’s rights, not their privileges. We have the ability to engage in contracts between ourselves and other parties, and the duty lies within the signers of those contracts to uphold their contents. It’s your responsibility to know what you’re getting into when signing a credit card agreement, and to know the consequences of your and the card issuers actions.
Without a determined focus on maintaining responsibility for our actions, and full knowledge of the contracts in which we engage, the respect for personal and corporate responsibility that the government holds for its citizens and businesses will continue to decline; leaving an open door to more anti-capitalistic reform and increased restrictions on personal liberties.