I DID listen to this (circa 2004) video, brian. It’s very interesting. However, on May 19, 2009, the Senate DID pass a “credit card reform bill” and gave issuers about nine months to comply with it. Not only did it require cc issuers to tell consumers on each statement how long it would take to pay their balances off if they made the minimum payment every month, it did away with “universal default” unless the borrower was behind on the “other account(s)” for >60 days.
I was aware of “universal default” after hearing friends talk about it when it apparently became a practice among issuers around 2003 or so. My own few cc’s are older than that so I don’t have any with the “universal default” provision and wouldn’t sign up for any that do.
Elizabeth Warren had some valid complaints back then as to the “business practices” of the cc issuers. I agree with the person in the video who stated that the issuers MUST use all that legalese to comply with the law in their “contracts” given to new consumers along with their new card. I don’t know if it can be explained any simpler but the requirement for the “min pymt” disclosure on the first page of the bill is a start.
Just like signing up for a “subprime,” I/O or exploding ARM mtg (or all 3 in one pkg, lol), it is the consumer’s responsibility to decide if they want to borrow money on the terms offered. By using a cc, one is either borrowing money or “floating” money (short term loan). In the end, the responsibility for wise cc usage lies entirely with the consumer. A “competent adult,” (no matter WHAT their income and obligations) shouldn’t sign up for one if they don’t fully understand the terms.
