The Secret History of the Credit Card is a documentary airing tonight Tuesday on your local PBS station. Frontline correspondent Lowell Bergman reports in depth about this industry, which is one of the most powerful lobbies on Capitol Hill. The program is also going to show the impact of the bait-and-switch practices of the companies (like teaser rates that double or triple after a time limit) that encourage those who can least afford to pay off a debt to go deeper in a financial hole.

As things stand now, credit card companies can raise your interest rate even if you have made every payment on time, and there is no ceiling on what interest rate they can charge. They’ve made sure of that by being cozy with politicians of all political stripes.

This is a timely program because the GOP is fighting to make it more difficult to declare bankruptcy. One measure proposed is for credit card debt to “survive” bankruptcy, like IRS payments — you would still have to pay off VISA/MC even after emerging from bankruptcy.

“The almost magical convenience of plastic money is critical to our famously compulsive consumer economy,” Bergman says. “With more than 640 million credit cards in circulation, the U.S. economy has clearly gone plastic.”

Millions of Americans use credit cards to make ends meet. Others, like actor and author Ben Stein, use plastic purely for convenience. While it would appear that Stein — who says he charges a small fortune every month on his credit cards — is the ideal customer, in reality, he is what some in the industry call a “deadbeat.” That’s because he pays his balance in full every month.

The industry’s most profitable customers, the ones being sought by creative marketing tactics, are the opposite of Stein; they are the revolvers: the estimated 90 million Americans who carry monthly credit card debt.

Ed Yingling, executive vice president of the American Bankers Association tells FRONTLINE that “revolvers are the sweet spot” of the banking industry. This “sweet spot” continues to grow as the average credit card debt among American households has more than doubled over the past decade. Today, the average card-carrying American family owes a record $7,500 on their credit cards. This debt has helped generate record profits for the credit card industry — nearly $30 billion just last year.

…According to the Better Business Bureau, credit card and banking companies are together the subject of record numbers of complaints. “It’s not an accident that the banking and credit card business generates more complaints nationally, across the country, than any other industry…. Out of one thousand industries that we track, they are number one,” says Pat Wallace, head of the San Francisco Bay Area Better Business Bureau. “There are irritated, unhappy, dissatisfied customers in this industry.”

As Professor Warren sees it, the industry is operating without fear of penalty. “There’s no regulator, and there’s no customer who can bring this industry to heel,” Warren says.

Despite the number of consumer complaints, the ability of state and local governments to investigate the credit card companies has virtually been eliminated. That’s because the federal regulator for the banks that issue the majority of the credit cards, the Office of the Comptroller of the Currency (OCC), has been engaged in what some describe as a “turf battle” with the states. The OCC has fought aggressively in courts and Congress to blunt state consumer protection laws and curb enforcement actions, sparking a nationwide battle.

Elliot Spitzer.

New York State Attorney General Elliot Spitzer has united with his counterparts from all fifty states in opposition to the OCC. “We get thousands of complaints every year about credit card issues…but increasingly over the past number of years what we have heard back from the major banks is that we don’t need to deal with you.”

The program will be available as streaming video tomorrow on the Frontline site.

There is a piece with more information on the program at Yahoo Marketwire.

NPR also has a piece on this, and interviews Bergman.

***

I was one of the 90 million with revolving debt for several years, but I’m thankfully now in the Ben Stein “deadbeat” category. I pay that crapper off in full each month (with the exception of Christmas time shopping or if I travel), or it’s gone the following month.