Kudos to PBS's "Frontline." In both "The Warning" and now "The Card Game" (9 tonight, WQED-TV), the venerable news documentary program does a fantastic job of explaining how American financial systems work. That's not to say other journalists haven't reported on the same things but it's rare to have such detail in a TV financial coverage.
Seroiusly, anyone who carries a balance on his or her credit cards needs to watch this program. And anyone who uses a debit card regularly should be aware of the potential financial pitfalls.
Reporter Lowell Bergman goes back to the start of the credit card game and finds that when companies did away with annual fees and extended credit to riskier borrowers, they created traps for consumers who don't read the fine print. And fall they did, generating millions of dollars in debt that only got worse as fees and interest rates rose.
"Your average consumer is not going to be able to translate to what the real pricing is," acknowledged Shailesh Mehta, one of the masterminds behind the confusing practice that doesn't pin down interest rates when a person applies for a card. "In a strange way, the banks were charging borrowers higher interest rates in order to give the wealthy people a break. ... The people who have money were paying in full and they were getting the break at the expense of the people who couldn't pay in full."
Even recent legislation signed into law by President Obama won't fully address the problem because it doesn't apply to small business credit cards or debit cards. Plus, it doesn't go into effect until eight months after it was signed, giving credit card companies time to impose higher fees and interest rates.
Watch "Frontline" if you want to be better informed about credit card issues before going hog wild on Christmas shopping this season.
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Check back here after tonight's "V" cliffhanger for some commentary on the series thus far.
Posted
Nov 24 2009, 12:01 AM
by
Rob Owen