A Brief History of Credit Cards

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For decades, credit cards have been a means by which large banks have loaned money to poor people at interest rates approaching infinity, read an article on Cracked.com with a nice infographics:

Incredibly, the above isn’t an exaggeration. There are people in this situation right now where each payment to their credit card company leaves them owing more. Only in the last few years has the government moved to stop banks from putting people in this cycle of infinite repayment (where the interest and fees are more than the monthly payments).

How was this ever legal?

Well, in the late 70s, the US Supreme Court ended the federal predatory lending laws, and the credit card economy was born.

Banks issued cards to anyone and everyone, often charging 24.99% interest (or higher, cash advances often collect 29.99%) and adding on an assortment of fees hidden in the fine print. This appears to be a good deal for the card holder, as the monthly payment is very low. Specifically, it was often 2% of the balance, an amount that would either have the card holder paying back their debt many times over or, in the worst cases, never paying it back at all (especially once unexpected fees were thrown in).

Read the whole article here

 

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  • DozyHole

    More definitive proof that the debtors are mostly always being taken advantage of.

    There are supporters of the current system that claim that money has always been debt and can’t be created any other way, they argue that it does not matter that some people currently owe while others are owed. This argument seems innocent enough until you live in the real world and see the crippling interest ruining peoples lives.

    If these people believe in this system so much then they should be pushing to make it much fairer. When money is debt then people have to be in debt, it’s a function of our economy and a mathematical certainty that (many)people will owe at times, it’s ludicrous that they should be then sent into a downward spiral of debt at crippling interest rates.

    It’s a mixture of a lack of joined up thinking from our policy makers and a sector of society benefiting immensely from this ludicrous system.

    Anyone opposed to positive money really needs to address the issues raised in this article, and perhaps explain why they think this is working?

    ps pity about the swear word in the article, a quick visit to photo-shop could have sorted that out:)

  • Pingback: A Brief History of Credit Cards | Foreign Living | Scoop.it()

  • mike crees

    With the latest ” miss selling” saga to hit the banks …surly enough is enough ,and whole banking sector should be broken up and much smaller community banks introduced to make investment within communities ,and serve the community

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