The Cash Cows of Personal Debt

The Credit Card Industry and Predatory Capitalism

http://www.informationclearinghouse.info/article15910.htm

By Charles Sullivan

12/15/06 "Information Clearing House" -- -- The booming credit card business is one
of the most profitable and destructive industries to ever emerge from the inventive
capitalist mind. Citibank is raking in more money than Microsoft and Wal-Mart.
Obscene profits are realized without lifting a finger to perform any physical work. In
2004 a single credit card company—the MBNA—realized 1.5 times the profits of fast
food industry giant McDonald’s. Collecting on credit card debt is a very lucrative
business.

With origins in South Dakota, the modern credit card industry began realizing obscene
profits as a result of deregulation. The Supreme Court also played a pivotal role in
expanding banking industry profits by lifting limits to the amount of additional fees
credit card companies could charge their customers. The sky is the limit now. Industry
deregulation has resulted in the systemic fleecing of consumers by practices that can
only be described as willful and predatory in nature.

It is variously estimated that debit cards will account for 26% of retail sales volumes
between the Thanksgiving and Christmas holidays this year, up 3% from 2005. The
busiest shopping period of the year does not occur on Black Friday, as is widely
reported, but between the 11th and 17th of December. During this span Americans will
likely spend $34 billion on credit and debit card purchases; and nearly $86 billion
between Thanksgiving and Christmas. Billions more will be spent on store issued credit
cards. In total, Americans will accrue $135 billion in additional credit card debt this
holiday season.

To date, credit card volume is running 11% percent higher than last year. The National
Retail Federation estimates that over $454 billion will be spent by American consumers
during the holiday season this year, including cash purchases. That represents a 5%
increase over the previous year, while VISA USA estimates overall retail sales for the
2006 holiday season to increase by 7.5%.These are truly staggering numbers that are not
easily grasped.

By paying only the monthly minimum payments, as so many struggling families do, it
may require more than thirty years to pay off a dress or a power tool that was purchased
at the local mall on Black Friday. That makes for a pretty expensive gift and every year
additional debt is accumulating upon the old, making extrication very difficult, if not
impossible. But that is the whole idea behind predatory capitalism. Industry insiders
refer to the small percentage of card holders who do not carry a monthly balance as
‘dead beats.’ Consumer traps are engineered into the system that all but guarantees that
card uses will be late making their payments or exceed their credit limits.

When card users are late making payments, as the complex algorithms used by card
issuers predict they will, interest rates rise dramatically and multiple user fees are added
to the monthly bill. Millions of card users spend most of their income paying exorbitant
user fees, without reducing the balance or reducing it only minimally. The bankers are
raking in billions, while working class families are becoming debt slaves to the
predatory capitalists of the credit card industry. This was made possible with the
blessings of Congress operating under the influence of the corporate lobbyists that
swarm on Capitol Hill like maggots on a corpse.

Bankruptcy laws that once provided working people a way out of debt are no longer
available to them as an avenue of escape. It should be noted, however, that bankruptcy
courts remain open to corporations and provide them with debt relief, a chance to start
over with a clean slate.

Thus the banker thieves will continue to rob working families until death do them part;
and then the debt burden is passed on to the next of kin. More than a cash cow designed
to bilk the people of their hard earned income, credit card debt is also a way to control
the debtors and keep them in line; and it is a major battle front in the class war that
rages across the continent.

Like genetically modified poultry with abnormally large breasts, the American
consumer is bred to consume and to be consumed by predatory capitalists. They are
taken in by seductive advertising campaigns that nourish the urge to consume, no matter
how destructive to the self or to the planet.

Credit card agreements are so complex and deliberately misleading that few consumers,
or even lawyers can fully comprehend them; and they are mined with hidden traps and
pitfalls guaranteed to produce lifetimes of debt.

From the previously cited statistics it should be clear that the people stand naked and
vulnerable before the predatory capitalists and their cohorts in government. Massive
personal debt is yet another example of a profit driven system that does not work for the
working people of this nation. The trust that should prosper between people and
government no longer exists, leaving the majority of citizens without representation.
Predatory capitalism creates enormous wealth for a privileged few by exploiting
workers who are trying to survive by working multiple jobs that yield non-living wages,
and few or no benefits.

Virtually all of the financial institutions in this country, including the Federal Reserve,
are arrayed against working families. Congress is working for big business rather than
working families, as evidenced by their policy decisions and voting records. Let us be
clear about whose side they are on.

Ever more creative methods of fleecing the people are being crafted in the corporate
board rooms of America and dutifully written into law by Congress. Millions of
working people thus find themselves buried under an avalanche of debt from which they
will never escape. Debtors are a cash cow for the credit card and banking industries
whose supply of milk is without end. Eventually we will be required to work until we
die, as our creditors and Congress work in concert to bleed us to death and gorge
themselves on our labor and our suffering.

The low esteem by which workers are held in America by the ruling Plutocracy
underscores the reality that there is no one looking out for our interests. But we must
remember that we comprise about 95% of the population. Our low placement on the
economic rungs of the ladder assures that we will remain bottom feeders, either
surviving or perishing on the crumbs that fall from the tables of the rich, thereby
guaranteeing our continued serfdom to them. It also demonstrates the necessity of
organizing as a class and rising together against the corporate predators that are
bleeding us of life, liberty, and the pursuit of happiness.

Sources:

BCS Alliance - www.Cardweb.com - PBS Frontline, November 28, 2006

Charles Sullivan is a photographer, free-lance writer and social activist living in West
Virginia. He welcomes your comments at csullivan@phreego.com.