It has always seemed to me that the only apparent discipline on
the credit card industry is the capacity of the consumer debtor
(whether necessitous or irresponsible) to shed the debt through
bankruptcy.
 
Of course, that does not tell us exactly what bankruptcy laws should
look like.
 
Why do I think consumer credit grantors need some sobering limits?
Consider this: In an executive class with middle level managers of a
major credit card company I made the offhand comment about the [to
me] counterintuitive practice of extending credit to college students
who have no income. Of course, it is a strategy for getting the card
into the wallet of a group of people who will have money, some day.
And yes, I think college students are at least as responsible as the
general public. But I encountered an argument that went this way:
"When you have maxed out on financial aid and on what your parents
send you, and there are still things you really need -- the music
system, the nights out that financial aid will not cover -- you have
two choices: You can get a part-time job or you can put it on your
credit card. If you get a part-time job the time spent working will
cut into your study time. But if you put the expenses on your credit
card you can pay it off with the job you get as a reward for all that
studying. And you can have a good time in college because you don't
have to work part-time and will have money for partying. Ergo, the
credit card promotes academic performance."
 
In my dotage, I find this bizarre. Who said college students had to
live beyond their means? Who said a part-time job harmed academic
performance? What ever happened to deferred gratification? And, with
the financial aid debt with which many students emerge from college,
why add consumer credit debt? And what about selling ones freedom
for a mess of beer and pretzels? Education is supposed to be
liberating, not enslaving.
 
I found the argument shameless, and said so.
 
Ginny