PBS Frontline: The Card Game

Credit Card Defaults Required viewing for all Americans. That’s what I’m calling this. You need to watch it, especially if you’re in my class.

Basically, our financial literacy as Americans is dictated by what the banking industry writes, and if we don’t read up on it, we’re financial illiterates and we’ll be taken for a ride. They’ve got the senate in their pocket – and I love how all the senators protest that they’re not influenced by lobbyist money, but they never, ever vote for meaningful reform. They can vote for reform, but it’s really a few concessions they are willing to make as they scramble to rework the system.

The unregulated free market is a nice way of describing a criminal free-for-all. The banks set the traps and we fall into them, one by one. Yes, regulations stifle growth and innovation, but they also keep people from being bled white by the cheats that flock towards unregulated free markets. I’m sick and tired of cheerleaders for the rich and powerful trying to keep the system as it is. We are in a trap, and the only way out is to change the system so these things can’t deprive us of our liberty.

Simply saying “nobody forced them to get into debt” is garbage. Trickery was in play, and the banks are the perpetrators of that trickery. We, the people, need protection.

2 thoughts on “PBS Frontline: The Card Game

  1. matthew wong

    Frontline: The Card Game Matthew Wong
    Credit cards were profitable, and stable twenty years ago, but Shailesh Mehta (the former CEO of Providian) knew that there was a lot of profit to be made. The business aimed at the people that were not paying their bills, so that they could keep playing. Loans (Credit Cards) could be paid for a very long time. Gimmicks and ideas that the advertisers made (Andrew Kahr) pulled in many people who jumped into the credit card companies. They made it look like there was nothing to be paid back because of the competition in other credit card companies, but there were always more and more fees. Credit cards are like chains, in which there is a certain credit line, and once credit card fees are not paid, or late, there are consequences, and the average consumer will be paying back fees and interest to the credit card companies. It will keep them even more in debt, and payments would be unaffordable. It is not stable to be part of a credit card company because there are so many consequences and also the credit card companies make up their own rules, which created an industry that is not regulated.
    There was credit card debt that people could not afford, and consumers didn’t know what to do. They had to refinance, and foreclosure occurred in front of them. Once there are people that keep borrowing and borrowing, and cannot repay, it affects the whole country. There are so many struggles in the United States, and unemployment increased. Reform bills were passed many times, but it is hard to go against the own people that help them. Credit card abuse is very strong in the United States, and in our country, we know that the system of the credit card bills were filled with flaws, and the war will be huge. Now, there is a bill that has already been passed, and saved many lives of us, the American people to live without worry and keep the credit card companies from spontaneous rates, but banks found new ideas like increasing interest rates, and the time it took to put into effect gave banks more time to impose higher interest rates, and anything they wanted.
    This had devastated consumers, and millions of payers have higher bills, and it is very tough for people at this rate to pay back the credit card companies. It can be very difficult for consumers who were part of this credit card game to survive the arrogant company’s during this time of “recession.” Now, there are more people using debit cards because consumers think that debit cards are safer, but there are always hidden fees and checking accounts were free. There are payments of overdrafts, and when banks found out that it was easier to do it, more and more banks incorporated these draft ideas. It is free until you make a mistake, and then the consequences can be horrible and devastating.
    We should look carefully and be carefully of how we should spend our money and when and how we use our credit and debit cards. There is the reality that the poor people pay more because they never tell us their overdraft deals, and the regulations. The only thing we can do is be careful, and understand that these loans that may look harmless are immensely dangerous and unfair to their customers.

  2. Ashley Parker

    I think in the opening lines they used the perfect analogy to describe Americans and banks relationship: a game. It sucks that the banks are the one’s holding the cards. They do change the terms, raise interest rates, and change the rules. What’s sad is that it’s been going on for 30 years. Why is it acceptable? It has been made very clear that usage of credit cards only calls for Americans to dig a hole for themselves deeper and deeper leaving them in insurmountable debt. At this point the statistic of 100,000 transactions per minute take place and that it’s led to nearly a trillion dollars in debt immediately raises a red flag. It’s gotten to the point of ridiculous for how many people are suffering from the usage of credit cards. I don’t understand why nothing has been done about it. It only causes for more problems. It’s common sense.
    When credit cards first came out, people who didn’t have access to that kind of freedom with money jumped at the chance. Now, after having become attached to the cards, they are in such a worse position. The fact that Americans would have to refinance their homes to pay back credit cards is wretched. Especially the fact that right after the credit cards were paid off, they filled them right back up. It’s an addiction, a sense of assurance that “hey, even though we don’t have the money now, we can still get what we need and just pay it back later.” The problem with that is that it’s not so simple. When a charge is made on a card it’s the price of what was bought, however as time passes and only portions of the amount are paid at a time, the charges increase each month. So what was maybe $7 for a small pizza shoots up to a $40 pizza. Like the video said, it’s a gimmick, and it has been so easy to fall into. Regulators make credit cards come off as helpful yet they have been a significant factor with the debt that has risen in the economy. They have caused Americans to go bankrupt because they cannot keep up with the vigorous minimum payments that only pay a minuet portion of the principal borrowed.
    What really pisses me off is how companies, such as Providian, know what they are doing. Obviously it’s what they had planned to happen due to when corporations give out credit cards they have in the back of their minds that the amount spent on that card will be so much more than that in the end. It should be considered a crime. The fact that they are aware that the loans they make will take Americans 20 years to pay off is simply wrong. What makes their lifestyles flourish ruins others.
    The government needs to take further action to control the trickery and misleading information that come with credit cards. If not, the economy is going to continue suffering and just get buried more profoundly in debt. I’m truly baffled to watch something like this and see that people who are hungry for profit would go to such lengths that take so much of a toll on the economy. Realizing that it has been going on for such a long time and no one has succeeded in fixing the situation is unreal. It just doesn’t make sense.

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