Saturday, May 24, 2008

Killing time.

Well, I joined 20 something bloggers, some sort of social network, that I found somehow. At 20SB, they have a debate section, where they post a topic, and people blog their opinions on that topic.
I find myself sitting here, munching on leftover chicken alfredo, watching quite possibly the worst Crichton film adaptation ever, and nursing an unusually strong hangover. While bouncing on the site, I happened across the new debate topic, and I figured it was as good a topic as anything to blog on.

The topic is...

With that said, this week's debate is about credit card companies. Do you think credit card companies should take more responsibility for their vulture-like activity? If you've been to a college campus, I'm sure you've seen tables strewn about with promises of free gifts simply for filling out an application. Similar practices can be found in most chain stores these days too (especially clothing stores).

On the other side, do you feel that people should be taking more responsibility for their finances by making more informed decisions BEFORE signing up for a credit card?

I think the vulture analogy is surprisingly apt. The sheer volume of credit card applications that get sent to me is shocking. They use mass marketing to prey upon the ignorant. As evil as that sounds, that's the heart of capitalism. Pretty much every major business uses similar cutthroat tactics. It's not evil, it's simply the most efficient business model. The marketing strategies in themselves are not unethical. Nor are the standing policies among some companies that they do not explicitly include on contracts. Rate hikes, continuous interest, and a rash of other methods that some companies use to give people the shaft are vague, complex, and disjointed. You pretty much need an attorney present to figure out what you're getting into. What is unethical is the combination of the two. When they mail you an app that can net you a credit card that only requires your name, DOB, and SSN, yet they attach it to a contract that's more complex than some home loans, they put themselves in a position to profit from a person's ignorance.
However, personal responsibility is a requirement. A scheme that depends on ignorance can be defeated by education. You need to read the contract, ask about the interest system, and ensure you have the income to cover the purchase. A credit card can be a very useful financial tool, if you know how to use it. It's practically a requirement for harnessing the purchasing power of the internet. But if you don't know what you're doing, you can ruin yourself financially with one. Personal responsibility and education is a must. Before you take a card, do some homework, check with a financial planner if you don't think you can figure it out on your own. In general, just Don't be stupid about it.

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