The Christian Science Monitor has a classic example of "Opinions on Shape of Earth Differ" syndrome. It runs a first-rate op-ed by Mark Lange on the invidious and predatory behavior of credit-card companies. It then, however, neutralizes Lange’s piece by featuring, equally prominently, a disingenuous and slippery op-ed by "award-winning attorney"
J.H. Huebert, defending the credit-card companies. Meanwhile, CSM opinion editor Josh Burek has audio interviews with each writer, letting them explain their own position and not asking any hard questions.
Lange’s piece is well worth reading.
There’s plenty to reform. During the housing bubble, credit-card vendors inflated interest rates – even as the Fed slashed them – and found increasingly sneaky ways to usher their customers into perpetually indebted servitude. Such as:
ß∑Raising rates as high as 32 percent on existing balances, with no notice, even when they’ve always been paid on time.
ß∑Compressing the time between statement mailings and due dates.
ß∑Charging interest on debt already repaid.
ß∑Posting on-time payments after their due date – and then charging late fees.
It’s astonishing how universal and profitable such practices are:
This year, card companies will break all records for late fees, over-limit charges, and other penalties, pulling in more than $19 billion. Not to mention extra charges for paying by mail or by phone (try $14.99). Credit card is the only industry where customers pay extra to be allowed to pay. Where agreements can be changed without notice. Where nearly half of industry revenues come from penalty fees.
Huebert, who’s on the faculty list at the Ludwig von Mises Institute, is reduced to setting up straw men:
If card issuers can’t recoup the cost of late payments through fees and increasing interest rates, they’re going to be less able to give cards to people on the lower end of the economic spectrum, depriving those people of the ability to build credit.
No one is suggesting that card issuers not be able to "recoup the cost of late payments". The recouping-the-cost bit is fine, it’s the making-$19-billion-a-year bit which people are having an issue with. If those monies were retained by "people on the lower end of the economic spectrum" rather than being seized by the credit card companies, maybe they wouldn’t have bad credit to begin with.
Huebert would have you believe that there’s a cross-subsidy going on, and that people who suffer large penalty charges end up subsidizing those who pay off their balance every month. He says that he and people like him "deliberately game the system" by not paying any fees, and implies that the credit card companies lose money on him.
But they don’t, of course: they just make money the old-fashioned way, by charging merchants a percentage of the sale price.
I’m actually more annoyed by the presence of Huebert’s op-ed opposite Lange’s than I would be if it appeared on its own. In order for an opinion editor to run a piece solo, it needs to pass a certain quality threshhold, and anybody willing to run Huebert’s piece in such a manner is very easy to ignore. But when you have two pieces "balancing" each other, the main aim of an opinion editor is just to find someone willing to take the other side of the argument; the quality threshhold drops dramatically.
Lange’s piece stands alone, very well. The fact that Burek and the CSM felt the need to balance it out with Huebert’s is simply depressing.