The Selling Of Debt To Americans
Signing up a new credit card customer: $58. Buying off Congress: $8.5 million. Keeping Americans in hock for life: priceless. by Dave Gilson
Here are “priceless” tidbits about the credit card industry:
In 1970, 51% of Americans had a credit card, compared to 93% today. The average American has 7 cards.
Americans owe $850 billion in credit card debt. The world’s 54 poorest countries owe $412 billion in foreign debt.
A “preferred customer” according to a Mastercard Vice president, is someone with a “taste for credit” who’s “willing to make minimum monthly payments-forever”
On the flip side 1/3 of Americans claim they pay their bill in full every month. Inside the credit card industry these customers are known as “deadbeats”.
60% of Americans have been in credit card debt for over a year and on a household basis owe an average of $9,659 on their credit cards.
14% of the average American’s income goes to paying off this debt. The average savings rate in America is negative 0.5%.
Americans charged $51 billion worth of fast food last year, a 29-fold increase since 2001.
1/3 of Americans in low to middle-income households are going into credit card debt to pay for rent, food and utilities.
Since 1996, when the Supreme Court struck down limits on credit card fees, the average late penalty has jumped 162% and the average fee for exceeding credit limits is up 138%.
Credit card companies earned $90.1 billion in interest last year and earned $55.2 billion in fees.
In 2005, Congress tightened bankruptcy rules at the urging of credit card companies.
In 2006, the top 5 credit card companies-JPMorgan Chase, Bank of America, Citibank, Capital One, and HSBC-made $8.5 million in congressional campaign contributions.
In 2001, First USA signed up two students as human billboards in exchange for their college tuition. The credit card company made late payments, almost forcing them to drop out.
In 2004, homeowners spent more than $150 billion from second mortgages to pay off their credit card and installment loan debt.
Almost half of bankruptcies are due to medical expenses, according to a 2001 survey.
The Koran forbids charging interest. In 2002, a bank in Bahrain released “the first Islamic credit card that conforms to Sharia” (Islamic banking law) principles.
In Dante’s Inferno, usurers occupy the seventh circle of hell.
