Will the credit card companies be the next to fall? On the next Your Call, we find out what happens now that card issuers have raised interest rates, added new fees, lowered credit limits and even shut down accounts. Americans recycle $882 billion dollars in debt, month after month; as unemployment sails past 5 million, how long before defaults skyrocket? You can send us an email at feedback@yourcallradio.org or join live at 11 am. What happens when the downturn turns on plastic? It's Your Call with Sandip Roy and you.
Guests:
Jose Garcia in New York
Senior research and policy associate at Demos with over ten years of experience working on civil rights, census advocacy, and socio-demographic analysis. Co-author of Up to Our Eyeballs: The Hidden Truths and Consequences of Debt in Today's America.
David Lazarus in LA
Business & consumer columnist for the Los Angeles Times. He joined the paper in August 2007. He previously worked as a columnist for the San Francisco Chronicle and a nightly radio talk show host for San Francisco's KGO Radio.
Click to Listen: Will credit card companies fall next?
Tuesday, February 24, 2009
Your Call 022509 Will credit card companies fall next?
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In 2001, 1.458 million American families filed for bankruptcy. In a survey of 1,771 personal bankruptcy filers half cited medical causes, which indicates that 1.9–2.2 million Americans (filers plus dependents) experienced medical bankruptcy. Among those whose illnesses led to bankruptcy, out-of-pocket costs averaged $11,854 since the start of illness. Real income for the majority of Americans has not risen in the past 30 years while expenses, and especially the cost of medical care have risen dramatically. As a result there is a lower savings rate and when a key wager earner loses their job and along with it their medical coverage, they are forced into credit card debt. The situation is made worse by the predatory practices of the banks that will often double the interest rate when there is an unpaid balance and they believe the card holder is going to be a captive customer. It is inaccurate to state that Americans as a whole have been on a spending spree when that is often not the case - they simply need medical treatment and must provide credit card billing information before they can see a doctor or be admitted into a hospital. Add in the fact that Americans pay double what their Canadian neighbors pay for the same medications and of course many times more just to see a doctor or have a procedure performed. Now it is popular for Rush Limbaugh and apparently NPR to blame the victims.
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