PBS Frontline Secret History of the Credit Card is one of the most worrying and disturbing documentaries I have ever watched. I always thought that credit card is one of the most useful innovations for American people and I always desired to own as many credit cards as possible so that I would not have to walk with cash. However, I now think it is one of the worst innovations that have ever happened to Americans, especially based on how the financial institutions misuse them. The primary intention to invent and use credit card was noble, and those who invented it meant well for Americans and the world at large. But it has now apparent that credit card is one of the most severe problems that are facing Americans without them knowing. Credit card owners knowingly or unknowing suffer and they can do little to change the situation due to poor consumer protection and ineffective laws that are rarely enforced for the benefit of buyers. Thus, I would be extremely careful with the credit cards when I grow older and able to own one, primarily to avoid debts and heavy penalties that are faced by many credit card owners currently.
It is clear from the documentary that the use of credit card in America is enormous. As described by some of the people interviewed, America is a consuming and plastic society, and this trend is linked to the credit card. Nearly 144 million Americans own credit cards, and they use them to conduct transaction almost on a daily basis (Roorda, 2017). Convenience is one of the primary reasons why Americans use credit cards. People can conveniently pay through credit card when compared to cash payment. It also appears in the documentary that some people use cards to get credit from financial institutions. However, the main concern is that millions of Americans suffer because of credit cards. It is disturbing that credit users have an average of $8,000 credit card debt and the majorities are poor people who struggle to pay the debts (Roorda, 2017). Also, it is worrying that about seven million Americans have filed for bankruptcy due to credit card debts. The documentary, therefore, has exposed the rot in the credit card sector and how it affects or impacts many Americans.
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However, I think the problem is not Americans but the banks and the government. Banks are using credit cards to make huge profits at the expense of consumers. They are taking advantage of the ignorance of Americans about how credit cards work to charge them high-interest rates and fees. Banks in the country are no longer serving the interest of consumers but their own as they strive to make supernormal profits by exploiting consumers. Banks are using deceptive information and marketing strategies to persuade consumers to take credit cards. Unfortunately, the government is doing little to protect consumers. For instance, I have realized that the Office of the Controller of Currency (OCC) is making insignificant steps in protecting consumers from unscrupulous banks (Roorda, 2017). Besides, the US has clear and precise laws that can help in regulating the credit card sectors. For example, it is shocking that fees charged by banks on credit card are not regulated by any law, and financial institutions are taking advantage of this to charge high fees on credit card users. I also believe that consumers are partly to be blamed for not using their credit cards prudently, especially when purchasing commodities. As a result, credit cards have encouraged impulse buying among consumers.
Therefore, I will be cautious when I start using credit cards to make major purchases. The first thing that I will do when taking credit cards is to read and understand the terms and conditions provided by banks. I learned that many people are accepting credit cards without understanding their terms and conditions. Consequently, they are not likely to defend themselves when they suspect fraudulent activities. Even though terms and conditions are lengthy and intimidating, I will take my time to understand them and seek clarification when necessary. Secondly, I will only use credit cards when necessary. I realized that some people have more than ten credit cards from various financial institutions. To avoid impulse buying or overspending, I will restrict myself to at most two credit cards. Thirdly, I will not rely on a credit card to borrow money, especially now that I know that the government or agencies do not adequately regulate their interest rates and fees. I will restrict my credit card use to make a necessary purchase and to enhance my convenience but not to borrow from banks.
People need to be educated about credit card use and how they can avoid some of the problems that are linked to innovation. Importantly, to protect American consumers, the government should effectively regulate the credit card sector. There is a need to formulate and effectively enforce laws that regulate credit card sector. Regulating the sector will protect many Americans from the wrath of credit card use.
References
Roorda, M. (2017, June 6). PBS Frontline Secret History of the Credit Card. YouTube . Retrieved from https://www.youtube.com/watch?v=dyAhraBSHFU
