CITIZENS JUSTICE INSTITUTE TO HELP CREDIT CARD DEBTORS FIGHT BACK AGAINST BANKSTERS!

Roger Ward Babson, the noted investment counselor and founder of Babson College, wrote a book entitled The Folly of Installment Buying a few years ago. His words never had more meaning than today, although installment sales are not a new phenomena. Records exist of installment transactions which took place in Mesopotamia (now Iraq) in ancient times, as well as in ancient Rome, in France at the time of the Revolution and in eighteenth century London furniture stores. In World War I the U.S. government promoted the sale of Liberty Bonds on the installment plan.

Babson defines installment buying as a purchase on the basis of one's making a down payment and then assuming a series of subsequent payments over a period of time, almost always at carrying charges. Customers became not really concerned with the real cost of goods, but whether or not the regular payment is affordable. On the other hand, the declining balance usually means the lender will have sufficient security in the goods sold if the borrower defaults and he has to repossess. Installment buyers usually pay a hefty premium in the cost of goods, depending upon the interest rate and the term of the borrowing.. Originally the term applied to purchasing such goods directly on a plan from the seller, but for the purposes of this article we expand it to the world of credit cards, where the interest gouged is far more severe.

When Babson wrote The Folly of Installment Buying, interest rates were considerably less than the 34% seen on so many credit cards today.. In fact, with late fees and over limit fees, charges now approach 50% on some accounts.

Because of the "South Dakota Syndrome" in which credit card lenders based in States with no usury laws ( like South Dakota and Delaware) can lend nationally under a federal exemption from the usury laws of the other states , the lenders just charge whatever they want, and to hell with the moral implications, consequences to borrowers or general effect on society.

Babson was a great booster of the private enterprise system. He was too conscious of the consequences of coming out directly and saying how media and advertisers brainwash people into buying things they neither really want nor need, or that they are buying things just to keep with the Joneses, but his implications are obvious. People also want instant gratification and lack the patience and maturity to postpone it, observed Babson.

About seventy percent of the American economy is driven by consumer spending. Somehow in the nineteen seventies Americans had credit cards but didn't use them to buy hamburgers at Mc Donald's or groceries at Stop & Shop. Today we do. Something is happening here, and it is not good. A $3.00 hamburger would cost $4.02 if it is not paid off in a year; indeed it could cost much more if the bill is allowed to fester.

At the end of 2002, US families reportedly owed more than $750 billion in credit card debt, more than $12,000 for each family with cards.

In 2004 Americans paid the industry $7 billion in late fees alone. The credit card industry earned $27 billion in before tax profits. (Source; Tamara Draut 'The Great Credit Card Rip-Off', East Texas Review, 2004)

What is actually happening is that thanks to promiscuous use of plastic, installment buying has spread from washing machines and refrigerators to everything. Because the interest is compounded, there is no hope for millions of Americans to ever get relief without drastic measures such as default or bankruptcy. Credit card companies treat their customers like serfs because they perceive the customer as powerless.

But it need not be so. If enough customers acted, they could scare the living daylights out of the banksters.

They would be forced to lend money at fair rates, like 6%. They would be forced to end high penalties for late payments or over the limit spending. They would be forced to stop mailing bills a couple of days before the deadline so as to extract a late fee.

Meanwhile, the Citizens Justice Institute is launching a national program to help credit card users fight back against unfair and predatory credit card issuers, and has developed a program to help people extricate themselves from credit card debt, using the techniques of asset protection, pro se litigation and other methods that have been shown to put the " plastic piranhas " in their place.

If you would like to have advance information about the Citizens Justice Institute's new program, just send a self addressed stamped envelope to: Credit Card Relief Programs, Citizens Justice Institute, Box 90, Hull, MA 02045.