Entitlement to Credit
Tony Pugh writes for McClatchy on Credit ripoff: How a $100 purchase turns into a $1,000 debt
The story is about subprime credit cards, how much of a rip-off these are and how finally the regulators are going after some bad behavior by the card issuers. That is all reported well as it should be. To spike an otherwise dry story, the author adds some human interest.
A former Navy hospital corpsman with disabilities, [Wendy] Adams received a popular subprime card — the Aspen MasterCard — in June 2006. She was approved for a $350 credit limit, but when the card arrived, Adams said, she’d already been billed for $285 in processing fees, leaving her only about $65 in available credit.
The above is all we learn on how Ms. Adams got the card. She must have in some way signed up for it. The processing fees are outrages, yes, but why then did she get that specific card? Was she scammed or did she not read the conditions and fees attached to it? The reporter does not let us know.
Adams said she promptly called and canceled the card.
That cancellation was never confirmed in writing by either side and the credit card issuer added interest costs, late fees and over-limit fees to the cards balance. A year later Ms. Wright finds that she owes some $1000+ on that card.
Now that is a problem. But still I wonder why she took out the card in the first place and why she did not cancel it in writing. She signed up for a card, the issuing company checked her credit records and sent her a card. That service was provided for a fee. Why did she believe that the cost for the already provided service would go away when she cancels the card? If you buy a car on credit but do not use it don’t you still have to pay for the car?
Ms. Adams now has a credit counselor and some help from the Better Business Bureau. But unless the dispute is solved, her credit rating stays negative. Why is that a problem?
"Because of this, we can’t buy our own house. We can’t take the tax write-off. We have to pay rent. We have nothing to show for it. We can’t buy a car. I can’t get a credit card. Our credit is screwed," Adams said angrily.
There goes my last compassion for Ms. Adams. Entitlement to credit is not a human right. She and her also disabled friend can not pay $1,000 they own the credit card company. But they complain about not being able to buy a house AND a car AND more stuff because of the dispute.
Next to reading contracts Ms. Adams should also learn a bit about tax-write-offs. You only get write-offs on taxes that you owne. How much would that be in her case?
"I’m a disabled veteran. I have no money. I make $1,200 a month in disability. I can’t work. I’m trying to go back to school, so I don’t have $1,100 to fork over to a company that doesn’t follow the rules," she said.
Sorry lady, you are a hopeless case.
I am all for better and stricter regulation of credit card issuers. They practice usury, they are vultures and there should be laws to protect their prey. But the reporting on the case does not show any wrongdoing by the company. Yes, the fees and interests are outrageous, but they are also legal. Nobody held a pistol to Ms. Adams’ head and made her sign the dotted line.
There are people like Ms. Adams who feel entitled to a house and a car and further credit even as they are unlikely to ever be able to pay for it. Those people are in need of some harsh lessons and the credit card companies provide these. That is the only point where they do deliver a real service and deserve their fees.