WHY AMERICANS SHOULD NOT USE CREDIT CARDS

Why Americans should not use credit cards

Why Americans should not use credit cards

Thesis: Debit card or plain old cash is much better than credit cards.

No discussion of credit woes in the U.S. economy is comprehensive devoid of a furious fire warfare between those who think government must stop "predatory" lenders from taking unjust benefits of borrowers, and those who deem that borrowers who could not give what they owe are shattereds who justify to be openly mocked, if not chained up and thrown straight into debtors' jail.

Companies and banks impose severe duties on the card holders. If these duties and tasks are not put into effect devotedly, one can accidentally put oneself in a complicated situation where they lose their credit card rights and undergo the problem of not having credit cards. Companies and banks also compell credit card holder to comply with the obligation to pay their bills punctually whether they have a job or not, to stay within their pre-set using maximum, and to preserve the worth of their credit.

President Barack Obama signed into law the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act in 2009. This legislation is designed to protect American consumers from what many believe to be unfair and deceptive lending practices on the part of the credit card services industry. It is hoped that the reform measures outlined in the CARD Act will offset years of shared fiscal irresponsibility, during which credit card companies unscrupulously extended credit to high-risk borrowers and credulous consumers took advantage of easy credit terms to run up excessive credit card debt. (Charles 2009)

The legislation also capitalizes on the economic fallout from the global financial meltdown of 2008, which ushered in a new era of fiscal circumspection on the part of financiers and consumers alike. Upon signing the bill, Obama issued a White House press release, stating that "With this new law, consumers will have the strong and reliable protections they deserve. We will continue to press for reform that is built on transparency, accountability, and mutual responsibility—values fundamental to the new foundation we seek to build for our economy." (Steve 2009)

The CARD Act will be phased in gradually between 2009 and 2010. The first round of rules takes effect in August 2009. Credit card companies must give cardholders written notice forty-five days prior to increasing interest rates or making changes to account terms—an increase from the current fifteen day period. In the same notice, credit card companies must inform cardholders that they have the right to cancel their account before the proposed changes take effect; if they exercise this right, cardholders can no longer use the card and they must pay off their existing balance within five years under the original credit terms. In addition, credit card companies must mail cardholders their account statements at least twenty-one days before the payment is due, up from the current fourteen day period. (Sarah 2009)

Even more consumer protections will be rolled out in February ...