[UPDATE: March 2008] Since FRONTLINE first broadcast "Secret History of the Credit Card" in late 2004, there have been several developments affecting consumers and the industry:
» The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
This much-disputed legislation requires that those filing for bankruptcy undergo a means test. If they earn more than the median family income in their state, they must file under chapter 13, which compels the repayment of the debt over five years.
» Ballooning Consumer Debt
By the end of 2007 Americans carried $937 billion in credit card debt - up $90 billion from 2006 according to CardTrak. The Federal Reserve reports that in just the first six weeks of 2008 consumers' revolving credit debt carried over month to month increased $68 billion.
In response, Senator Dianne Feinstein (D-Calif.) introduced in January 2008 the Credit Card Minimum Payment Notification Act. It would require credit card companies to clearly warn consumers - in their monthly credit card statements - about the financial dangers of making only minimum monthly payments and to provide a toll free number to an accredited credit counseling service for those consumers making only minimum payments for six months or more.
» Rising Bankruptcies
More than 800,000 Americans filed for bankruptcy in 2007 according to the American Bankruptcy Institute, with February 2008 numbers 28% higher than the previous February. The latest figures show the financial ruin in the sub-prime mortgage market is spreading from states like California, Nevada and Florida to states along the Eastern Seaboard.
» Mergers and Profits in the Industry
In 2006 Bank of America acquired MBNA, making the nation's third largest bank also the nation's largest credit card issuer. The following year Bank of America also purchased Chicago's largest bank, La Salle. In 2005 and 2006, Capital One bought New York bank North Fork and the Louisiana-based Hibernia Bank.
As a result of mergers and consolidation, the top six card companies now carry about 75% of all outstanding credit card debt. In 2007 industry profits soared to a record $40.7 billion according to Time magazine.
Researched by Zoe Woodcraft of the U.C. Berkeley Graduate School of Journalism's Investigative Reporting Program.