It’s of little wonder that Benjamin Franklin is on the $100 bill. His guidance on financial matters remains significant today, even as the bill itself continues to lose value. In an uncertain economy, it is more important than ever to make wise financial decisions. Unfortunately, our federal government has not always followed this sound approach.
Outside my office in Washington sits a sign displaying America’s rapidly increasing national debt, much of which is owed to foreign governments. I see this staggering number of $30,000 per citizen every day as I walk into my office—a daily reminder that over the past decade we have not been good stewards of taxpayers’ money. America’s debt problem translates to personal budgets as well, with Americans averaging over $9,000 per person in credit card debt.
Thinking of these numbers, I am drawn to Franklin’s advice: “But, ah, think what you do when you run in debt; you give to another power over your liberty.” This statement is as true today as it was in his time. I believe that it is imperative that we return to this fiscally sound principle both as individuals and as a nation.
Although today’s financial markets look quite different, Franklin’s warning, “Remember that credit is money,” is still relevant. Indeed, a credit card can be deceptive. It gives us instant access to cash without the feeling that we are spending actual money—that is, until we get the credit card statement. We are met not only with our balances, but often unexpectedly high interest rates and new fees.
Life often springs unexpected and unavoidable circumstances on hard-working families which may force them to rely on borrowed money, like the loss of a job or a health crisis. While individuals cannot be excused from the personal responsibility of their own finances, everyone should be given a fair chance to pay off their debt to credit card companies. Without a doubt, some of the abusive practices prevalent in the industry are unacceptable and are getting worse. For instance, the credit card industry is expected to collect $19 billion dollars in penalty fees alone this year, which is a 79% increase since 2003.
In order to level the playing field for consumers, I have cosponsored H.R. 5244, the Credit Cardholders’ Bill of Rights Act. This comprehensive legislation would ensure that consumers are protected from the unfair policies of some credit card companies. This legislation would guard cardholders from retroactive or arbitrary interest rate increases that are unrelated to the credit card, as well as provide cardholders with the right to cancel their account if faced with a rate increase while they are in the process of paying off their existing balance. Moreover, this legislation would ban any collection of interest on amounts already paid. Payments made before 5pm EST on the due date would be counted as “on time,” and each billing cycle would be at least 25 days long. It is my hope that this commonsense bill will help keep companies honest while giving consumers a fair shake.
I also hope this bill will encourage increased discussion about our debt as individuals and as a nation. We as Americans must make the difficult decision between what we truly need now and what we must save for later. As an appropriator and a fiscal conservative Democrat, I have a vision of an America where we will not pass down the burden of debt to our children. I believe we must work toward rebuilding a national surplus and investing in programs that benefit our futures rather than those that only seek short-term returns. In summation, perhaps Benjamin Franklin said it best on how to accomplish this goal, “A penny saved, is a penny earned.”
