‘U R Pre-Approved’ for a credit card fiasco

Hey, everybody, it’s almost summer. Let’s have fun. We deserve it; we’ve worked for it. And, let’s do it now; we don’t want to wait ‘til we’re old and gray, for heaven’s sake. Fly now, pay later. Take that trip to Spain – it doesn’t cost much and we’ll have the memories for a lifetime. Priceless. “Live it up … Use it or lose it …”

Can’t afford it, you say? What! Are you crazy? We have credit cards. And, look, zero interest for a whole year. Makes sense to me.

We took the bait … hook, line and sinker. Now look at us. Collectively our credit card debt is $850 billion, according to news reports. That’s close to $10,000 per individual or household. And, we still have unused credit of $2 trillion left on approximately 400 million active credit cards in the U.S., the reports said.

There are 3,700 credit card transactions per second, around the clock.

Welcome to credit card hell.

A new documentary film written and produced by Bradley Dugdale, “U R PRE-APPROVED,” is a film that explores the murky nature of credit card company practices and marketing – and it pulls no punches. The shocking figures, above, are but a few of the gems to be gleaned from this entertaining, albeit hard-hitting documentary.

Bradley Dugdale, senior vice president of D.A. Davidson Co., in Coeur d’Alene, says millions of Americans are headed for financial ruin. His concern for the financial well-being of Americans is nothing new. In 2000, he wrote, “Let’s Save America!” a book about using the power of compound interest to accumulate money for retirement. With “U R PRE-APPROVED,” Dugdale warns Americans, especially young people just starting out in life, about the dark side of credit card debt.

This film is truly mind-boggling. It should be required viewing by every high school grad – indeed everyone in America. “U R Pre-Approved” will soon be available on DVD. For information, go to www.letssaveamerica.com.

The documentary shows how our youth are being lured into credit card slavery. It reveals that students represent 25 percent of a credit card company’s new growth. On their 18th birthday the pre-approved credit card applications start jamming their mailboxes. How exciting. Someone actually “trusts” them … and having their own credit card is so “grown up,” a benchmark of adulthood.

Dugdale, who has a teenage son, says, “This is just an unfair fight. Graduating seniors are now receiving around 40 credit cards and they can’t even pass financial literacy tests.” Everyone over age 18 could be seduced into a lifetime of debt. Little do they know once they’re sucked into that hole, they may never get out. What a way to start their lives.

“The middle class is gradually being destroyed,” Bradley says. Credit cards are now people’s “rainy day” fund, covering unexpected car repairs, health care, or dental costs. Sometimes they’re used to pay for child care and for a second car, because now Mom has to work.

According to Dugdale, our seniors are emerging as the new leaders of the pack of Americans experiencing ever-increasing and crushing debt loads. Some news reports have said this includes aging baby boomers, too. Debt among aging Americans is expected to keep rising as the cost of living continues to spiral higher and higher and retirement funds fall short. Cards are being used to pay for medicines, and even expensive medical treatments.

On April 14, 2005, Congress passed the most sweeping bankruptcy reform bill in history. According to those insiders who were interviewed for the documentary, the credit card companies literally wrote this legislation and spent $50 million on getting it passed into law. The new law gives banks and credit card companies a free hand to do virtually whatever they wish, the insiders said. They can operate with impunity, charge whatever interest rates they please – the sky is the limit and there are no stipulations against usury.

We’re warned to read the fine print on these credit card offers we receive – and we try, but – good luck! Even seasoned contract lawyers are at a loss to understand these new contracts. They are misleading, confusing, and simply not understandable.

A group of 78 law students, two months from graduation, was handed a pre-approval offer and asked to find the effective interest rate, and to figure how long it would take to discharge a $1,000 debt, with just the minimum monthly payment. It took them 45 minutes just to find the interest rate. ($1,000 at 18 percent interest rate, making minimum monthly payment, would take 13 years to pay off, if no more debt was added.)

What can we do? Dugdale has three suggestions: We can call our credit card companies and negotiate a lower rate. We can Opt Out from receiving the offers by calling (888) 567-8688, or www.optoutprescreen.com. We can write “No Thank You” on the front of the envelope of every pre-approval offer and put it back in the mailbox. (That costs them!) Lastly, we should start reducing debt. See Dugdale’s Web site, www.letssaveamerica.com.

Additionally, Dugdale suggests that we pressure our elected officials to make good decisions and to protect us from these predatory practices.

Meanwhile … he quips, “Who’s in your wallet?”