100 Days of Obama: Credit Cards Under Fire

Friday's Marietta Daily Journal, page 6B, contains a headline guaranteed to turn heads in a credit-less economy. "Obama wants credit card law" turned heads throughout Marietta, GA as customers at a local cafe discussed the issue. Ben Feller's AP Newswire article also generated heated discussions, both off- and on-line.

Talk about credit and scores is serious discussion, as credit now determines whether or not many people can make major financial changes in their lives, such as buying a house or restructuring their debt. Some customers may even be barred from holding certain jobs due to a bad credit score.

The changes proposed include easier-to-understand contracts, a ban on quick rate increases, easier forms, and more. The most basic financial analysis shows that some of these measures will prevent credit card companies from reaping the profits that they currently enjoy. A few customers smartly replied that the credit card companies will find new ways to extract money from their customers. The economy is bad, and consumers are increasingly turning to credit cards as a way of making it through some of the toughest times in their lives.

John Galczynski is an engineer. He builds custom solutions for clients' financial & procedural problems. He is also an independent consumer advocate. Clients go to him if their finances are in trouble or if they need to solve any other problems in their lives, such as traffic tickets or bad tenants. His credit card crisis solution is not to get involved with credit cards in the first place, unless they are needed. "Credit cards should be used if you are trying to build credit or if your involvement will result in financial benefits."

Lately, John has seen more people using credit to pay the mortgage. This means that consumers may end up getting burned by skyrocketing interest rates applied to a substantial amount of money. When asked about credit cards and contracts, he had the following to say: "These credit card laws may end up helping customers. But the customers need to know that, ultimately, they really are in the driver's seat. They can change things only if they take action. Contracts can be negotiated, and citizens vote with their wallets. If the card companies won't bend with you, then go elsewhere."

The credit card law proposed by Obama has not yet been put before lawmakers for passage, but the option to do so remains open.

Sources:
Marietta Daily Journal Staff/Wire, "Obama wants credit card law" April 24, 2009, Page 6B.
Feller, Ben. "Obama pledges protections for credit card users" April 23, 2009, Associated Press.
Galczynski, John. Interview, April 24, 2009.