I know that credit cards are evil, and that I'm paying with snakes. I just love my 3% cash back to give up completely, so articles like this while appalling, are not too surprising:
Banks Mine Data and Woo Troubled Borrowers
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Although I firmly believe that the responsibility for every penny of debt ultimately rests with the borrower, we should all be aware of baits the lenders use to lure us into their traps.
The lenders don't just use existing information about your life to inundate you with custom offers, they use sophisticated predictive models to precisely know who will or will not take the bait. They hone their algorithms, making each pitch more effective, getting more people to borrow and spend.
These companies think they are doing a consumer a service, instead they are contributing to the credit collapse of this country.
The whole "Debt Trap" series which explores the surge in consumer debt and the lenders who made it possible, is an interesting read.
October 29th, 2008 at 07:34 pm 1225308840
Don't they know that so much butter raises your cholesterol and some people may have heart attacks? Murderers!
It is all their fault. If they did not cell anything but carrot sticks and cabbage we would all be thin and healthy.
October 30th, 2008 at 04:22 am 1225340540
I guess it's just another reason that we all should learn as much about personal finance (and taking care of our health, too!) as we can, and to do as much to help ourselves as we can. Then we'll be able to say "No thanks" to the pervasive credit temptations in our culture.
October 30th, 2008 at 04:05 pm 1225382752
I'm absolutely not absolving borrowers from their due responsibility. But don't you see a difference between a cake in the window and deceptive, calculating and harmful marketing practices? These actions specifically target people who are down on their luck, and make their money when those people can not meet their obligations.
You can see the direct effect of allowing this to run rampant: people loosing 1/3 of their 401K values because of the crappy economy caused in large part by unregulated credit.
This is why I believe in regulation of the invisible hand because we are all affected when people get taken advantage of, no matter how smart we ourselves are. European countries, have far stricter laws limiting the sale of personal information. Those countries also have far lower per-capita debt levels.
October 30th, 2008 at 04:08 pm 1225382928
I couldn't agree more! I think our nation as a whole will do so much better if we educate the public about issues such as this, and personal finance in general. The more informed we are, the less people will be taken advantage of and the better off we all will be as a country.