Originally published March 21 2005
Americans should not blame credit card companies for their debt problems, according to Donald Ogilvie
by Mike Adams, the Health Ranger, NaturalNews Editor
Donald Ogilvie, the president and CEO of the American Bankers Association, says that Americans should not blame credit card companies for their debt problems. According to a recent study, most bankruptcies are caused by sudden calamities such as a death in the family or the loss of a job, not the companies that offer high-risk, unsecured debt to consumers.
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.
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.
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.
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.
They can eliminate late fees and manage the interest rates on their credit cards by paying, on time, their credit card and other accounts that might contribute to their overall credit profile.
A more likely cause of the increase in bankruptcies is that a borrower experiences some unusual financial hardship, such as the loss of a job or overwhelming health care costs.
Congress wisely is completing bankruptcy reform legislation right now that protects people who face these kinds of catastrophic loss.
People who can afford to pay back some of their debts will be required under the new law to do so, rather than use the bankruptcy courts to duck their obligations.
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