Global Advice Center

Why We Needed Credit Card Relief

Posted on Jun 17, 2010 06:10:54 PM

If you’ve had a credit card for any length of time then you’re probably aware of how challenging it can be to keep up with all the changes credit card companies throw at you. Each change isn’t designed to benefit you either; it’s designed to benefit the bank that issued your card.

Over time those changes kept piling up in favor of the banks and savings and loans until their practices almost completely removed the consumer from the equation. And so finally, Congress acted and the Credit CARD Act of 2009 was born. At long last, a little bit of credit card relief!

But how did we end up needing an Act of Congress to help us handle our finances? Were banks given too much freedom? Were we as consumers just asleep at the wheel? There may have been a little of both.

Firstly, the banks were given a lot of rope. Rules and regulations were eased or erased for years, giving them more power to raise rates and change terms almost at will. And since their reason for existing is to turn a profit, almost all of those changes contributed to their bottom line and not the consumer’s.

Secondly, consumers didn’t keep a close enough watch on their own finances. Many of us bought into the fallacy that we could live above our means and never have to pay for our purchases. We all learned a hard lesson from that one, but where do we go from here?

Our best bet is to pay off our debts as soon as we can. And then we need to learn new habits to make sure we never accrue an unmanageable level of credit card debt again. Rediscover the joy of living within a budget. Start using prepaid debit cards instead of credit cards. And stop trying to keep up with the Joneses – they’re probably in deeper debt than you are anyway.

If we can rediscover what saving our money before we buy feels like we might even find that we like it. Wouldn’t that be a relief?