Credit cards a plague upon many houses

In particular, students are awash in debt, drowning in fees.

Consumer spending has become such a tradition over the last 20 years that hefty credit card debt is now a way of life for many. That’s particularly true for working families and college students – two groups whose daily needs can far outstrip their financial resources.

It’s unfortunate, then, that they’ve become easy pickings for credit card companies intent on padding their bottom lines with excessive fines and penalties.

Consumer advocates have long argued corporate profits should not come at the expense of those who hover at the economic margins. Political leaders should pick up that argument and enact meaningful reforms to rein in credit card company abuses.

The credit card industry now relies heavily on late-payment penalties, over-limit fees and exorbitant interest rates to compensate for the cheap credit it offers more affluent borrowers. Those fees now make up one-third of all credit card revenue, twice their share just eight years ago.

Some of the most egregious practices withstand legal challenges, because credit card agreements disclose them. But the fine print can run pages long and circles around average people struggling to make sense of confusing legal minutiae.

Many strategies are cleverly designed to maximize fee revenue. Processing the largest transactions first can yield multiple overdrafts and fines nearing hundreds of dollars. Nearly all banks and credit card lenders are only too eager to approve transactions that exceed credit limits.

None of this excuses the poor decisions some consumers make. But frivolous purchases are no longer required to amass sizable debt. As costs such as tuition and health insurance skyrocket, it’s no surprise that the average family carries more than $9,000 in credit card debt. The typical college student graduates with $3,000 in high-interest debt.

A number of reforms could begin to cut away at those numbers. Grace periods should be required before imposing late fees. Terms of agreement should be summarized in a single paragraph of plain English. Financial literacy courses should accompany credit approvals for those younger than 21.

Any one of those measures would begin to level the playing field between average citizens and the credit card industry.