Attempting to fix the credit crisis by disabling the under-21 set
I was on my way to Meijer to get some groceries last night (kitteh was out of food and I like to drink things that aren't booze--which was all I had left in my fridge) and was listening to NPR, as I am wont to do.
I think Marketplace was on, and they mentioned that Congress recently passed the proposed credit card legislation (plz to Google yourself, I couldn't find a good article/blog to link to) that would ban people under 21 from getting a credit card without a co-signer (read: parental permission) or "demonstrating financial literacy."
Um, wut?
Why are they targeting the under-21 age group? Is it because college students are contantly targeted with "free" rewards and prizes and fantastic (and misleading) rates by credit companies offering instant sign-ups and approvals? Or the near-constant barrage of credit offers in the mail we receive (I'M LOOKING AT YOU, CHASE AND DISCOVER) that promise low rates and rewards (at ridiculous APRs and yearly fees)?
Or maybe the fact that many of us take a card out to pay for necessary expenses, like groceries or gas, but have to way to pay the money back because we can't get a job even with our college degrees? Or we took it out to pay for the ever-increasing tuition and housing rates to get said degree? Or because we know we won't be able to qualify for a decent apartment or house when we do, by some miracle, get a Real Job that pays us a Real Salary without having built up our credit for a few years beforehand even though the refund from our student loan or minimum-wage part-time job will barely cover the fees?
Or perhaps the ease of getting a store charge card, offered with the lovely incentive of "20% off your entire purchase today!" if you say yes? Some of us buying new career wardrobes really like the sound of 20% off, but don't understand the difference between a credit card and a charge card (credit cards have a minimun payment every month and interest accrues, charge cards have to be paid in full at the end of every month and there are extra fees attached--I learned this the hard way).
But again, why is everyone under 21 required to be financially literate, or have a parent who will back them? Why isn't everyone required to show they know how to navigate the credit system before getting that piece of shiny plastic?
Requiring this of only a small percentage of the population, who usually need a co-signer in the first place, is blatantly unfair. Targeting those under 21 will not fix the problem at all, especially since rarely are we given education on how to handle having credit. I know in my high school economics class we learned how to balance a checkbook and file a 1040EZ and look at the stock portion of the newspaper, and maybe a little bit of supply and demand curves. Credit? Hah.
If Congress is going to pass credit reform laws, they need to give the finger to credit lobbyists and REFORM THE SYSTEM. These reforms are kind of like trying to treat a tumor with a bandaid. They are not addressing the underlying problems: a lack of credit education, ridiculous penalties and rates and fees, unfair credit scoring, etc.
Also, prohibiting payments over the phone and the internet? WTF? THAT IS HOW I DO MY BANKING, CONGRESS, SINCE REPLACEMENT CHECKS ARE EXPENSIVE TO ME.
I think Marketplace was on, and they mentioned that Congress recently passed the proposed credit card legislation (plz to Google yourself, I couldn't find a good article/blog to link to) that would ban people under 21 from getting a credit card without a co-signer (read: parental permission) or "demonstrating financial literacy."
Um, wut?
Why are they targeting the under-21 age group? Is it because college students are contantly targeted with "free" rewards and prizes and fantastic (and misleading) rates by credit companies offering instant sign-ups and approvals? Or the near-constant barrage of credit offers in the mail we receive (I'M LOOKING AT YOU, CHASE AND DISCOVER) that promise low rates and rewards (at ridiculous APRs and yearly fees)?
Or maybe the fact that many of us take a card out to pay for necessary expenses, like groceries or gas, but have to way to pay the money back because we can't get a job even with our college degrees? Or we took it out to pay for the ever-increasing tuition and housing rates to get said degree? Or because we know we won't be able to qualify for a decent apartment or house when we do, by some miracle, get a Real Job that pays us a Real Salary without having built up our credit for a few years beforehand even though the refund from our student loan or minimum-wage part-time job will barely cover the fees?
Or perhaps the ease of getting a store charge card, offered with the lovely incentive of "20% off your entire purchase today!" if you say yes? Some of us buying new career wardrobes really like the sound of 20% off, but don't understand the difference between a credit card and a charge card (credit cards have a minimun payment every month and interest accrues, charge cards have to be paid in full at the end of every month and there are extra fees attached--I learned this the hard way).
But again, why is everyone under 21 required to be financially literate, or have a parent who will back them? Why isn't everyone required to show they know how to navigate the credit system before getting that piece of shiny plastic?
Requiring this of only a small percentage of the population, who usually need a co-signer in the first place, is blatantly unfair. Targeting those under 21 will not fix the problem at all, especially since rarely are we given education on how to handle having credit. I know in my high school economics class we learned how to balance a checkbook and file a 1040EZ and look at the stock portion of the newspaper, and maybe a little bit of supply and demand curves. Credit? Hah.
If Congress is going to pass credit reform laws, they need to give the finger to credit lobbyists and REFORM THE SYSTEM. These reforms are kind of like trying to treat a tumor with a bandaid. They are not addressing the underlying problems: a lack of credit education, ridiculous penalties and rates and fees, unfair credit scoring, etc.
Also, prohibiting payments over the phone and the internet? WTF? THAT IS HOW I DO MY BANKING, CONGRESS, SINCE REPLACEMENT CHECKS ARE EXPENSIVE TO ME.