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See-Thru Credit Cards

Several years ago, an acquaintance stole my identity and opened several credit cards in my name. I learned of the theft only when she ceased to be able to pay even the minimum amount due, and I became the unhappy recipient of several daily calls from menacing collection agents. 

In the process of sorting out the resultant mess, I learned more than I wanted to know about the dangers of credit cards. I discovered how quickly fees add up when bills are not paid, and how eager credit card companies are to raise rates for delinquent customers. From one company’s diligent and helpful inspector, I heard unfortunate stories about financially-desperate parents who take out credit cards in the name of a minor, only to learn later that they have inadvertently ruined their child’s credit rating. From reading the credit card bills attributed to me, I was reminded how quickly small and necessary expenses—such as food and gas—can add up to unmanageable debt. In the end, I did not press charges against my acquaintance, both because I did not want to send one more person into our broken criminal justice system, and because I recognized her act as a desperate attempt to care for her family on an insufficient income. The fact that she would spend several years paying back the credit card companies seemed punishment enough. Most people who get into credit card trouble are not doing anything illegal. And, while some use credit cards to buy luxuries that they can ill afford, many others rely on credit cards to buy food, pay medical bills, and manage other daily expenses when there is little cash on hand. Even I, who am always careful to pay my credit card bills in full and on time each month, am mystified by much of the small print on the back of my statements, and the periodic letters I receive informing me that some obscure condition or another has changed in a way that only an accountant could understand. I was shocked, for instance, earlier this year to learn from a financial advisor that the company that issues one of my credit cards had begun imposing an annual fee; though I had read every one of the letters I received from this company, I had missed this crucial detail buried somewhere in the legalese.

In Jewish law, there is a category of prohibition known as g’neivat da’at — literally, stealing someone’s knowledge. This prohibition describes cases in which one person knowingly tricks another — say, by selling a lemon without revealing the car’s flaws. Technically, credit card companies that institute arcane policies are not guilty of g’neivat da’at, as these companies always fulfill the legal requirement to inform customers of changes to the account. However, when even a person with a graduate school education cannot always understand the descriptions of these changes, one wonders whether the credit card companies intend to inform or confuse. If the intention is the latter, then we might find the companies guilty of g’neivat da’at, and not hold the consumer liable for mistakes made as a result of this confusion. The Torah famously forbids charging interest on loans. This prohibition becomes a bit more complicated in later law, as the establishment of banks and other financial systems requires that individuals and institutions be able to take interest from one another. Today, observant Jews are able to use, work in, and operate banks because of a legal accommodation, known as heter iska (permission to do business) that skirts the blanket biblical prohibition on interest. Still, rabbinic discussions of interest shed light on some of the problems of the credit card industry. One rabbinic text notes that the word "neshekh" "interest" comes from the word "to bite," and compares interest to a snake bite, which may not hurt at first, but eventually becomes unbearable as the venom begins to have its effect. (Sh’mot Rabbah 31:5) I am thrilled that President Obama has taken on the issue of ensuring transparency in credit card rules, and of eliminating some of the more insidious fees and penalties. Credit cards are not all bad. Credit cards allow for easy tracking of expenses, help people to get by until pay day, and offer frequent flyer miles and even money toward college tuition. And individuals should be held responsible for the irresponsible use of credit cards. But for the vast majority of Americans who try to be responsible credit card customers, who pay at least the minimum bill on time, credit card companies should be held accountable for providing easy-to-understand information and for avoiding excess fees that slowly "bite."

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