What legislation would you propose to reform the credit card industry?

Question

Its obvious that there will be legislation since both parties are upset in the hearings on the current practices. But as we know most legislators have no idea what is going on with the typical citizen and there needs on an issue so crucial. So what would you want that could be put in legilation that this Congress would pass to make the industry more responsive to people who are at risk.

Answer 1

It'd never get passed, but if people were made to take a financial literacy test (much like a test to get a driver's license) where there are questions about what APR is, how their card calculates APR, what the consequences of missing a payment are (higher interest rates, late fee, and damage to the credit report/credit history).

I think that having kids learn how to set up an amortization table before they graduate highschool as part of a math course would be a big plus... they'd see how long it'd take to pay off a credit card making only minimum payments and how much you end up spending in interest.

Answer 2

Maybe I'm naive, but I don't see problems with it. Yeah the interest sucks but if you use it properly (like pay at least the minimum payment each statement) and don't get into massive debt in the first place, you'll be fine. I sometimes carry a balance so i have a low-interest card, but for the most part i try to pay more than the minimum. These companies make you pay if you use the card improperly, and it's not their problem, it's the credit card holder's self control that's the problem. Do I max out my card? Hell no, that would land me in serious debt.