Speech

Jake Linton

12/11/12

Logsdon 2^nd hour

Credit Card Debt

During the Holiday season we all go around the department stores and purchase gifts for one another. Oftentimes, my mom comes home with a trunk full of presents for all of my relatives.  She walks into Macy’s with nothing, and leaves with several bags of gifts. How? A credit card. A piece of plastic that costs fourty five cents or less to make. You can get credit cards for free from most banks. So you get a free card, go to a store, buy a new tv, pay nothing and leave. Sounds perfect. To the uninformed, a credit card is perfect. Its free, no hassle, convenient. Seriously, who today walks around with five hundred dollars in cash to buy Christmas presents? If you paid in that amount of cash, people would think you are a drug or arms dealer.  For all of these reasons, credit cards are extremely prevalent and successful. So what's the catch? No money, and free presents? How can credit card companies make money off of this, not to mention billion dollar industries that can advertise on a National scale. Credit cards are glamorous or sleek to hide their true nature. A credit card is almost a necessity today, but the problems are devastating. Credit card companies trick ignorant users to trap them in an endless cycle of debt.

Unfortunately, more and more Americans are falling prey to credit card debt. Student loans, home loans, business loans, and injuries are the leading causes of debt. The bank charges interest, and so does the credit card that you pay your loans on.  The payments become increasingly large and soon you have amassed a mountain of debt. There are dozens of hotlines claiming to end credit card debt. Almost all are fallacious. The most common ways to escape debt is to declare bankruptcy or commit suicide. It sounds absurd but dozens of deaths since 1980 have been linked to debt. Bankruptcy often just leads to further debt or unemployment.

This sounds like an adult problem or for just stupid people. Its not. Most people don’t truly know how to manage their money. Per year, the most new credit cards are registered during the first week of college due to the large “credit card fairs”. Companies just give out credit cards to students who are ignorant of contracts and terms of agreement. New students don’t manage money well, and soon they find themselves in debt with student loans or overall debt due to unemployment. Our generation is the MOST at risk of any. Money has changed over time. It was once gold or silver coins. Then it was paper and cloth money. Today, most money is exchanged virtually. Its almost like a game, its not even real. Its just numbers, not coins or dollar bills in your hand. You are at a higher risk because you don’t realize how much money you are spending.

How do companies do this? False advertising sometimes. Changing contracts other times. Loopholes in agreements. Compound interest on your rates.  Sometimes even setting up “help centers” that end up right back into the companies contracts. Unfortunately there are dozens of ways. The companies can use corporate power and lawyers to combat false advertisement charges.  An individual can’t strike out against a credit card company because its technically your own fault. It is. But credit card companies don’t help anyone or give any breaks. These entrapments are near impossible to expose in court because people often sign the unknowingly sign the contracts.

The best way to end credit card debt is to prevent credit card debt. It sounds like a dumb issue, but because it seems so trivial, people overlook it much more often than that earthquake or that war. If we want to fix the National economy, worry first about your own personal economy. If you are buying a house, don’t pay in cash until you deal cocaine. But otherwise, not using credit cards helps.  A credit card is a great thing. But only when its used in moderation, and with responsibility.

Scurlock, James. “Maxed Out: Hard Time, Easy Credit, and the Era of Predatory                          Lenders.” Magnolia Pictures, 2006. Film.

Powell, Eileen. “Americans build mountains of debt” New York, 2004. Print.

Shin, Annys. “How Has Bankruptcy Law Affected You?” The Washington Post, 2006.  

            Internet.

Geewax, Marilyn. “Consumers’ Personal Debt Ceilings on the Rise Again.” NPR, 2011.

            Internet.

Glasbergen, Randy. “Cartoon ID: Money 116.”  2006. Internet