Protect them from themselves?

Here’s a bit of recycled news on the CBC:

Canadians feel powerless when it comes to their credit cards — whether the problem is high interest rates, confusing fine print or hidden fees — and they want a consumers’ “bill of rights” to protect them, according to an Ekos poll conducted for CBC’s Marketplace.

At this time of widespread financial uncertainty, respondents to a four-day survey conducted Feb. 12-16 were asked, “Would you support a credit card bill of rights that would provide legal protections for consumers in their dealings with companies that issue credit cards?”

Eighty-two per cent of respondents answered yes.

I say it’s recycled because the poll was conducted for Marketplace. It’s a component of an investigation for the program. Pulling the poll out of context and presenting it as a stand-alone story makes it sound ridiculous. People are cranky about their credit cards! Gosh, really?

Okay, I’ll move on to the substance of the story, called, “CBC poll suggests Canadians want a credit card ‘bill of rights.’” I can’t shake the feeling that many of these people got credit cards, didn’t use them wisely knowing the possible consequences, and are now unhappy. I don’t get the impression they were taken advantage of. The poll question speaks of legal protections. The article doesn’t give a single example of a credit card company charging for something the card holder didn’t authorize.

Take this example:

Keith MacIsaac of North Sydney, N.S., was unwittingly paying one such charge on his Canadian Tire MasterCard for years.

The charge is called “credit balance insurance.” It’s supposed to protect cardholders in case of accidental illness or death, or if they lose their jobs, by covering credit card payments.

MacIsaac was upset by his discovery and suggested a solution: “Perhaps the time has come for a credit card ‘bill of rights’ in Canada to protect consumers.”

Unwittingly? MacIsaac had to agree to this protection, in writing. He didn’t read what he was asked to sign. He didn’t ask questions about the service he was offered. And that he unknowingly paid for this insurance for years tells me that he didn’t look at his statements for the same length of time. Failing to review your statement each month is pure negligence.

Should another layer of laws be introduced to protect people who not only won’t look out for themselves, but actively avoid practising basic self-interest? I suggest that such a ‘bill of rights’ will not help those who will not help themselves.

And before you suggest it, my lack of empathy is not because I’ve found it easy to avoid this problem. I have this problem. I have credit card debt. I made very bad decisions. The difference seems to be that I acknowledge that the decisions were mine to make. I accepted offers I should not have. I handled my finances unwisely. I must therefore accept responsibility for my situation.

A credit card bill of rights would’ve have one of two ‘best case’ effects for me. It would’ve saved me from this trouble, letting me find some other money problem to get myself into, or it would’ve kept me largely out of trouble, making sure that I never learned how to handle money. My only regret is that I did not learn this lesson earlier! But I did learn it and I’m making rapid progress toward becoming debt free. It’s not easy, but it is well worth the effort.

This proposed legislation may result in many only paying 10% interest, instead of 20%, on their five or six digit debts. It doesn’t really matter because the debt will still be there. People will still try to live beyond their means and get themselves into trouble. Whether it’s because they simply don’t care or because they don’t understand how to avoid it, the outcome is the same. Much like those with alcohol or drug addiction issues, no one can solve their problems until they recognize they have a problem and decide they want to solve it.

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3 Comments

  1. Jessica
    Posted February 20, 2009 at 13:19 | Permalink

    Sheesh, people have no sense of responsibility these days! What happened to the good old days when you saved up for something you wanted and only bought it when you–now, this is a radical concept–actually had the money?! Case in point: today’s economy. The economy didn’t get there all by itself, now did it?

  2. Posted February 21, 2009 at 12:18 | Permalink

    This is the same mentality of the people here in the States wanting the government to bail the real estate market out of all the foreclosures. It’s ridiculous. You took the loan, knowing you wouldn’t be able to pay for it! And, even worse, the bank was dumb enough to loan that money to you! Handing out money in the form of debt to people that clearly have no means of paying it back, and people who are too willing to take something they clearly have no intention of working for is ridiculous. The real estate market needs to fall on its face right along with the people they sold to, and the credit card holders who refuse to take responsibility for the hole they’ve put themselves in should be allowed to fall right along side them.

    Sorry for ranting. You hit the nail on the head here, Rick, and it’s a sore point with me, as well.

  3. Shawn
    Posted February 23, 2009 at 08:52 | Permalink

    I agree with all that is said. People should take responsibility, but I do have to say I would really appreciate a less confusing explanation on how they apply interest. they make it just complicated enough that most do not understand it. i ran into a case a few months back that had me going in circles. I bought some stuff on a credit card with a zero balance. when the bill came, I only paid part, knowing I would pay the rest off the next month. In the mean time I did use the credit card again. when the next bill came, i paid the bill to zero. The next month, there was still interest owing. What i did not realize (yes, i did not read the 45 pages of terms) is that they apply your payment to the new purchases first, even before they show up on your bill. And while they don’t charge you interest on the new purchases for a few days, they pay it off first and charge you interest on what you think you just paid off. So in fact, your statement is not what you really ow. This must bring in millions each month for the card companies. The only way to get out of the trap is to either stop using the credit card or call in, find your balance and pay it off right away, before the bill is printed.

    My other beef is that they do little to prevent card theft and then charge us all high rates to cover the losses. NOT FAIR!!! We have all seen the ads for the chip in card, so where is it? Can all vendors accept it? Where is my new, more secure card? I have been waiting years.

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