credit cards vs personal responsibility: thoughts from the injury prevention paradigm

The credit vs no credit debate is endless. Those opposed to credit cards point to predatory lending practices, while those on the side of credit cards claim that personal responsibility is key. So who’s right? Well, both are.

Let me use an example from my field. Until recently, injury was unrecognized as an essential component of public health. Of course, we realized that injuries were a leading cause of morbidity and mortality, but we’ve always held the widespread belief that they are merely “accidents” over which we have no control. It’s only been in the past few years that we’ve come to realize that there are specific risk and causative factors (and thus areas for intervention) for injury and injury events.

In 1970, William Haddon developed the Haddon matrix, which identified various factors in the three stages of an event (before, during, and after). These factors included personal, vector, environmental, and social.

When we first started address this problem of intentional and unintentional injuries, we focused on addressing behavior (personal). People’s knowledge, values, and beliefs played a role in the types of decisions they’d made, so injury prevention specialists attempted to intervene at that point. But we quickly realized that this was both cost-inefficient and ineffective.

Yes, people should make the right decision. But in practice, we make poor decisions all the time. Sometimes, we do so deliberately. But most of the time, it’s because we lack the proper tools to make the correct decision.

Generally speaking, a driver should slow down when entering a school zone. But more often then we’d like, that person does not. We could focus an educational campaign on teaching that person why they should slow down; we could even teach the children at that school to be careful while crossing the street. We call this an active intervention - one that requires action on the part of the individual. We undertake these types of interventions all the time, with varying degrees of success.

More effectively, we can also undertake passive interventions. Instead of relying on people to make the correct decision, we alter the environment such that they have little other choice. Hence we install medians, speed bumps, traffic cameras, and the like, to ensure that drivers have all the means at hand to make the safe choice.

The same can be applied to personal finance. Yes, we should all use credit responsibly. Unfortunately, too few of us are given the tool to be responsible, and for the most part, we’re actually given the tools to be irresponsible.

Few of us receive any sort of education on credit cards and debt management, or even simple budgeting. But almost all of us are bombarded with the idea that living beyond our means is ok. Even worse, the credit card companies prey upon our initial ignorance, providing ever easier ways to drown ourselves in debt.

We will, if given the right opportunities, make the right choices, even when it comes to finances. But if making the wrong choices is easier, then it’s no wonder so many people choose that road. So while education and personal responsibility should provide a cornerstone in changing behavior, there needs to be a passive intervention as well.

Simply put, credit card companies should change their ways. Or rather, the regulatory environment should change, thereby resulting in incentives for credit card companies to change. Consumer protection laws should be enacted, and the worst of credit card practices should be abandoned.

Of course, there is a fine line between protection and paternalism; we walk it all the time in public health. But the practices that were initially decried as infringing too much on our personal freedoms are also those that have saved the most lives - seat belts, child seats, speed limits. They’ve also not had an effect on the profitability of the auto industry, nor have they resulted in increased costs. And if anything, they’ve allowed for better decision-making.