This was surprising because interest-rate increases are usually a punishment for late payment or going above the credit limit, both crimes I had not committed. I called customer care to have the matter corrected.
After being placed on hold for several excruciating minutes--the music was so bad that I almost gave up the cause and accepted the increased rates as my new reality--a black American man answered my call. I explained my case, and he told me, in the manner of security guard rather than the manner of one who cares for customers, that he could do nothing about it. The increase was made and that was that. But I had been borrowing money from his bank for nearly 10 years without missing one payment; didn't that count for something? It counted for nothing, he said sternly. I was now in the land of Kafka. According to the man guarding the credit card corporation, some person inside of Bank of America had looked at my account and decided that my interest rate needed to be increased by 7 percenage points. Who was this person? The guard didn't know. Who had the power to reverse this person's decision? The guard didn't know. What he could do was mail me a letter stating that someone in the company had made the decision. I have yet to receive that letter.
The situation with Bank of America (which recently bought Fleet Bank, a bank to which I owe another, less troublesome debt) seemed hopeless, so I stopped thinking about it. My mind enjoyed relative peace until last Thursday, March 10, when the Senate voted 74-25 in favor of a bill--the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005--that would make it harder for ordinary debtors like me to file for bankruptcy under Chapter 7, which erases all debts after a filer has forfeited his or her assets. All Senate Republicans voted for the bill, as well as a staggering 18 Democrats. (Senators Patty Murray and Maria Cantwell voted against the measure.) The problem with the bill is that it has nothing to do with catching, as its supporters claim, "deadbeats… who abuse the system." The fact of the matter is that most people who declare bankruptcy do so because of medical reasons, and when you add those who declare bankruptcy because they have been laid off or divorced, then you have, according to Elizabeth Warren, Harvard Law Professor, 90 percent of ordinary bankruptcy cases.
So, if the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is not about deadbeats, then what is it about? Like so much in this society, it's about corporate profits.
One Democrat, Senator Mark Dayton, presented an amendment to the bill that would put a cap on interest rates, and another proposed amendment wanted to place restrictions on a creditor's ability to increase a debtor's interest rate. Both amendments where gunned down by Republicans. And there is the proof: This bill had everything to do with interest-rate hikes and penalties, which, according to Bankrate.com, account for between 30 and 40 percent of profits made by credit card corporations. R.K. Hammer Investment Bankers recently reported that in 2003, credit card corporations made $14.8 billion in penalty fees, which was nearly $4 billion more than they made the previous year ($10.7 billion). And as the Washington Post and L.A. Times have pointed out in recent editorials and articles, it is hikes and penalties that keep many of us deep in debt. Making it harder to declare bankruptcy makes it easier for creditors to increase their rates, because bankruptcy is no longer an option for us--we must give in and live with endlessly rising fees and charges. "All that matters in this bill is for the credit card companies to have more profits," said Senator Ted Kennedy.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is a declaration of war. Credit card companies were the main supporters of the bill, and have been pressing the issue for almost a decade. Bill Clinton refused to sign it into law because it was too mean; George W. Bush is going to sign it because it is his second term and he no longer needs the votes of those red-state debtors who were dumb enough to vote for him.
So now creditors can treat their debtors like serfs because, from their point of view, we are powerless. But there is another way of seeing the situation. CNN/Money reported in October of 2003 that the total credit card debt in America stood at $735 billion, with each household owing an estimated $12,000. What American debtors owe credit card companies nearly matches the GNP of Mexico. Most commentators and, indeed, most average Americans find these facts depressing. But there is another, much more empowering way of looking at this "mountain of debt," as the pundits like to call it. Our collective debt is actually an area rich with political potential. The willingness of Americans to accrue debt not only fuels the world economy ("the world economy is leveraged to the U.S. consumer," says CNN/Money), but it makes corporations dependent on us in a way they were once dependent on our labor. If only the sums that we owe were politicized then we'd finally have the necessary strength to challenge the neo-liberal policies that have successfully weakened our labor and social rights since the '80s. What's left? What can't corporations relocate to India or Mexico? Our debts.
There's a saying, popular among the rich, that goes like this: "If a person owes $20,000 to a bank, that person has a problem. But if a person owes $20 million to a bank, the bank has a problem." That's why banks and the federal government are always willing to step forward to bail out faltering airlines, and rich people like Donald Trump--who in 1992 was bailed out of a $1 billion debt by panicked banks. If small debtors united we could make our debts the banks' problem. This we can do by rejecting any moralization of our debts, as some Republicans were doing last week ("Those who can pay their bills should pay their bills. That's the American way," said Senator Orrin Hatch), and instead bring our personal negative balances together, connect our little monthly payments into a massive weapon that we can use to threaten powerful institutions like Bank of America.
In Hegel's times, the essential human struggle was between slave and master; in Marx's times, it was between laborer and capitalist; in our times, it is between the debtor and creditor. Debtors of America, unite!
