Critical Analysis Of Gretchen Morgenson's 'The Debt Trap'

The first major point that Gretchen Morgenson makes in her article “The Debt Trap” is how lenders have found ways to make a bigger profit from borrowers in the recent years. Shes states that for example, “the rates that credit card companies charge borrowers rose from 17.7 percent in 2005, to 19.1 last year”. That difference added to billions of dollars charged annually. She stated that overall, these lenders increased “junk fees by fifty percent in recent years”. In the capitalistic society that we live in, these lending companies are doing everything they can to make as much of a profit as they can. If this means shoving Americans into the ground in the profit, they do not seem to feel bad about it one bit. This has created a problem with

At some point in life, I will need to buy a car, house, or other commodity. There also is a large possibility that I will have a credit card in the near future. Knowing and learning more about this “debt trap” that other Americans are falling into, can help prevent me from making the same mistakes. Also, knowing about this problem can help us as a society be more understanding to people who are lower class. People could be victims of some of these traps and without knowing how someone got to the social status they are, we cannot make assumptions and put the blame all onto them. The biggest thing that the reading brought to my attention that I did not know before, was how many hidden fees there are in lending. Before reading this article, I always though when you take out loans, you receive X amount of money and then you just have to pay back the money as it increases by a set interest rate every year. With all of the other “junk fees” that were talked about it in the article, it makes lending seem much more difficult. It has made me aware that I need to be much more careful when I do start using a credit card and taking out other