Judge, Jury and Executioner.
Credit card companies are all three.
They decide if you are 'pre-approved;' they decide if you should 'get away' with a late payment; and they decide whether or not to 'kill' you with excessive interest rates, penalties and fees.
I would argue that most people know this about credit card companies BEFORE they sign that first application. But, even assuming they've been living in vacuum and have no idea, they get the electrical shock the first time they are delinquent with a payment.
Few things in life are that black and white. The CHOICE to enter the credit card game is not one to take lightly. You have to train for it.
Unlike speeding or blowing off work for a day or giving into a child's demands, where you are playing the odds of whether or not you'll get caught or if your actions will catch up to you, credit companies let you know IMMEDIATELY if you screwed up.
They aren't like the IRS who will not catch up to you for several YEARS (after you've REALLY screwed up). You know right away that you've spent more than you can pay back. And, if you don't choose to immediately adjust your spending habits, then you're NOT a victim.
Having said that, I do think credit card companies should NOT offer more than a $1,000 limit on first cards. You should EARN a higher credit limit over time. There should also be a cap on the amount of interest credit card companies can charge (i.e., Prime + 10%). And, I believe laws should be passed to that effect.
We are bombarded every day, numerous times throughout the day, with advertising. And, numerous times a day, we make choices as to whether or not we are influenced by various advertisements.
The lower one's income and education, the more likely one will get 'suckered.'
People also get suckered by 'Low Prices' in Big Box stores.
It's a vicious cycle: Children and parents in lower income/education brackets tend to watch more TV and quickly develop an "I want it now!" drive. That is reinforced by parents who don't want their kids (or themselves) to 'look' poor. They drive to the Big Box stores and see all the 'good deals,' and rationalize their purchases as 'smart buys.'
They fail to factor in whether or not they even have the money to make these purchases. But, they are 'rescued' by credit card companies who offer them more money than they could ever pay back. And, since they receive more than one offer from credit card companies, they continue to sign up for additional credit cards and attempt to 'float' their debt.
During this time, they are NOT thinking of ways to pay down their credit cards. Sadly, they keep thinking they have 'free money' to use to buy even more crap they can't afford.
By the time it all catches up to them, they risk everything from repossession of vehicles to home foreclosures/eviction. At this point, they can't drive to work and risk losing their jobs.
All because they got a good deal on a Plasma TV.
So, who is to blame?
You can blame public schools for not having mandatory courses in money management.
You can blame advertisers for being so pervasive.
You can blame society for the stigmas associated with being poor.
You can blame credit card companies for predatory lending.
You can blame yourself for not having the courage to say, "NO! I can't afford this."
Perhaps, I'm in the minority, but I don't view credit card companies as evil. I enjoy a great relationship with credit card companies. I'm able to borrow large sums of money for little or no interest because I've always been very careful about money management. And, if you're good to credit card companies, they are good to you. If you're bad, you quickly learn about the zero tolerance rules of the credit card industry. It's true that credit card companies don't go out of their way to make one aware of their zero tolerance policies, BUT one generally figures it out rather quickly after just one late payment. From that point on, the burden is on the borrower to get his/her finances in order QUICKLY.
I grew up during a time when I SAVED to buy a tennis racket or a bicycle. I didn't just get the idea that I wanted a bicycle and have it INSTANTLY after a quick trip to Walmart (cuz it was a good deal).
I think our debt problems are due mostly to a societal acceptance (even encouragement) of instant gratification.
Therefore, I think delayed gratification must be taught. We can't expect parents who never learned it to teach it to their children. It must be taught in school, along with money management.
I also think a resurgence of the "Just Say No" campaign could be effectively used today. Instead of that copy hovering over various drugs, it could hover over an enlarged checkbook ledger with the balance in brackets (indicating debt).
I mention this because of (a) the column by David Brooks http://www.nytimes.com/...
and because (b) many are viewing the tax rebate checks the same way they view credit card offers: as 'free money.'
What Brooks failed to mention was that our government WANTS us to be in debt. They want us to buy crap we can't afford. Because that creates more indentured servants and greater inequality. We have to be smarter than that. We have to get off the debt hamster wheel. We need to support and celebrate those who live within their means. We won't enjoy social and economic mobility if we don't get out of debt (AFFORDABLE home ownership excluded).
UPDATE:
Credit Cards saved me THRICE, so I'm a bit biased. The first time they saved me I was jobless and homeless (crashing at a friend's apartment). I was able to borrow money until I could get another job. The second time they saved me was when I married. My hubby was divorced AND bankrupt. He had NO credit, BUT he had a job. I had credit. I took on his debt and together we both worked overtime for 4 years years (this was during the early 90s when one could get overtime pay, but interest rates were higher). We were frugal, and we paid off everything. We were so used to being frugal, that we quickly began saving money after we paid off all of our debt. Then, we were able to buy the little house we rented (home prices were much cheaper then). Then, we paid off the house and adopted kids. We didn't use an adoption agency, plus Clinton had passed a HUGE tax break for parents who adopted, so we recouped all of our adoption expenses. The third time we used credit cards was when we built an addition to our house. We got 2.9% fixed interest rates for the life of the loan because we built right after 9/11 and because I had an excellent credit history. We built our addition on credit card loans.
Yes, credit card companies are guilty of ALL the things mentioned in comments thus far, but when USED PROPERLY, they can increase your quality of life. That's why I don't see them as intrinsically evil.