The kitty is not as innocent as it looks. Behind the cute caricature lies a company which is arbitrarily raising interest rates and reducing credit limits to customer as a result of the Credit Card Accountability Responsibility and Disclosure Act of 2009 that was passed in May. Interest rates from one bank can be raised because the consumer was late on another card in a practice called universal default. It charges exorbitant late fees because it is profitable and because it can. There is a lack of legislation to protect the customers as a result of the clout of the banking industry’s lobbyists.
I know this issue has nothing to do with human rights, but I was struck by one comment made by the producer/ reporter of the show. Lowell Bergman has worked for 60 Minutes, the New York Times, and produced a number of Frontline shows. He won a Pulitzer Prize for the NY Times in 2004 for his report on worker safety violations and the weakness of Occupational Safety and Health Administration (OSHA). This report can be watched here with links to his articles for the Times here.
He writes that “a system has been developed where the affluent pays the least and the most vulnerable people pays the most”. The simplicity and truth of that statement struck me while I was watching the piece.
Credit card banks profit the most from the poor who can’t make their payments on time and are charged high rates of interest and late fees while people who pay their entire balance on time benefit indirectly because they don’t have to pay annual fees or high interest rates.
I don’t defend people who are fiscally irresponsible, but I get angry when people are forced to pay for health care with credit cards because they don’t have insurance. They then get stuck in a vicious cycle of debt at no fault of their own.