Wednesday, April 20, 2005

Another tax on working stiffs the Plutocrats deny!

It's the junk mail and television that does it!


Robber Barons in the Junk Mail
by
Lisa Rowe Fraustino

What fun. I just got off the phone with someone at MBNA, the credit card issuer that "earned 1.5 times more profit than McDonalds in 2004." I called for clarification on some points in the document I had just read, or attempted to read, entitled "Important Changes to Your Credit Card Account," which, fortunately, I had not slung out with all the other junk mail my husband and I receive from credit card companies on a daily basis.

This one also appeared junky-its return address had a post office box and city but no company name anywhere on the envelope, the postage was a preprinted bulk mail imprint instead of a stamp, and my own address had that distinctive spat-out appearance that happens with mass mailings-but it also had a line printed across the bottom stating "Important Amendments to Your Credit Card Agreement Enclosed."

Uh-oh.

As someone who had once before been burned by a similar amendment, that is, as someone who had once gone through a credit card statement to find an unexpected increase in the interest rate, only to learn upon calling the company that, apparently, the changes had been sent to me but had somehow escaped my notice. Somehow. Like, concealed in junk mail trappings so I wouldn't pay attention. Anyway, I knew to open this one, and with a sinking feeling read the terms.

Yes, on the very same day that Congress approved a bill to protect all those poor abused credit card companies from all those evil deadbeat bunkruptcy filers, I had received notice from the most profitable credit card company in the world that they were changing my terms from a 5.9 percent fixed rate to a higher variable rate; that they were changing the default APR pricing comparably, and the grace period, and the payment due date, plus upping the late fee, etcetera etcetera, and they must have noticed that I went to Thailand in January, or maybe it was my airline and hotel reservations to an upcoming conference in Winnipeg that gave them the brilliant idea to add a "Foreign Transaction Fee" of three percent, and, oh, "the conversion rate will be reduced by one percent campared to the way it was previously determined."

So, anyway, the human voice I finally contacted at MBNA, after many minutes of musical button punching followed by many more minutes on hold, told me that I had read the small print right, that indeed my sweet fixed rate of 5.9 percent would be increasing to a nasty variable rate (currently 8.99 percent), that this would happen as of May 25, 2005, and that I may reject the increase and default APR pricing if I give notice in writing, in which case my rate will remain fixed at 5.9 percent until it is paid off as long as I never use the card again after May 24, or if I do use it then the changes will kick in anyway even if I didn't accept them.

This is an improvement over the last time a credit card company tried to stick it to me-at least I can freeze the rate. The last company allowed card holders to reject terms but only if they paid off the balance and canceled the account. That, of course, I indeed accomplished by switching credit card companies. There's always a better offer coming in the mail, if not today, maybe next next week. And so I will reject these changes in big letters highlighted with yellow marker handwritten on scrap paper to show the underpaid paper pusher at MBNA what I think of her boss, and I will wait for another hungry company to lure me and reel me in. They all want me, you know-I'm very attractive, hot even, with my truly excellent credit rating and my record of always paying bills on time and my secure job teaching at a state university while carrying a stubborn credit balance that refuses to go away.

Hey, I got divorced a few years back. And remarried last summer. And I have three kids in college. And I live in Connecticut. Where I moved from a much cheaper state for a new job in 2002. Any one of those would be reason enough to rack up some credit card debt, but it's getting harder and harder to pay off with the various and sundry ways our economy is causing middle-class ends not to meet. I've always been pretty good with finances, shopping around for the lowest interest rates, trying hard to keep the debt load down, driving used cars with good gas mileage, wearing old shoes and only buying last season's clothes on sale (but not at Wal-Mart).
Meanwhile gas and heat prices have gone up and up and up (one frigid month we had an electric bill of $429 for heat in our 1500-foot home, which we keep at a toasty 65 degrees in winter), and so have the property taxes on said home, by over $800 a year-which, of course, would have made a nice dent in the credit card balance. Thank you very much, Republicans, for that clever little transfer of the burden, which, if I did my math right, adds up to more than my so-called "tax cuts" from Mr. Bush.

My husband and I know full well what we need to do. We need to save money to prevent disaster in the case of disaster like cancer or not getting tenure, but to save we need to stop incurring debt and pay off the mortage and the car loans and the student loans and the credit cards. With the credit card companies increasing their interest rates at the same time as consumer borrowing is increasing to pay for escalating costs in basic needs, it becomes harder and harder for people to pay off debts, save money, and, wow, wouldn't this be nice, maybe even invest in stocks, like, wow, MBNA stocks, which I predict will have a lovely rate of return after May 25, 2005 (just a little hunch, there). But I'm thinking maybe the stock market isn't all that interested in middle-class pocket change, unless it comes out of the big collective pockets of social security.

By the looks of their profit returns, MBNA didn't need to raise my interest rates or anyone else's. They really ought to watch out where they put their greedy fingers. Haven't they heard the old adage about not biting the hand that feeds? What about the consumer economy? Don't they want us to be able to afford to buy new stuff to pay them exorbitant interest on? Do they actually want to drive middle-class people into a back-breaking and inescapable debt ratio just because they can? Are our wealthy citizens who run these businesses and own shares in them really that greedy? Are our elected representatives really that short sighted in allowing credit card companies to change the rules at will, always benefitting themselves and never their consumers?

When we sign papers for fixed rates on mortgages, car loans, and student loans, fixed means fixed. We know the deal and can budget accordingly. But credit card companies get to change all the rules whenever they want, and consumers can't do a damned thing about it except pay up or move debt around. There's something wrong with this system. We might even call it morally bankrupt. Instead of blaming the debtor and making it harder to erase credit card debts in bankruptcy, instead of catering to the desires of big business, our government representatives ought to be taking a hard look at the needs of their constituents.

Constituents. That means people. People who vote. Corporations, the last I checked, don't get to vote. They just get to make profit, and externalize whatever costs they can, including human costs. The constituents who elect government officials are not unfeeling, profit-driven companies but living, breathing people who need government regulations to counterbalance the sociopathic effects of capitalism. I'm all for the aspects of capitalism that promote economic health and democratic principles, but there's a greed line that ought not be crossed in a society symbolized by the Statue of Liberty, on whose pedestal is inscribed: "Give me your tired, your poor, your huddled masses yearning to breathe free.."

How rich DO the rich have the right to get? On the backs of the working poor and middle class? It would be understandable if MBNA had to change its terms of agreement for sound fiscal health, but they're already in perfect health and are taking more than their fair share to gain even more wealth, like the robber barons of old. Just because they can.

Why don't our elected officials protect the huddled masses from credit card policies that amount to theft? They ought to. They really ought to.
This essay originally appeared at: http://www.commondreams.org/
Lisa Rowe Fraustino teaches English at Eastern Connecticut State University specializing in children's and young adult literature. Her most recent book is
She can be reached at FraustinoL@easternct.edu.
This essay is reprinted in the Flyer with her permission.

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