Taking charge: attention credit card companies: when we want you to charge us hidden fees, we'll let you know.

• Author: Gordon, Robert
• Position: THE NEW PROGRESSIVISM

In 1949, a finance executive named Frank McNamara invited two friends to dinner at Major's Cabin Grill in New York City. At the end of the meal, McNamara found that he had forgotten his wallet, and he was forced to call his wife for money. McNamara vowed never to face that humiliation again. He made good on the vow: A year later, he returned to Major's and this time paid the bill with a new product--a small piece of cardboard.

Thus was born Diners Club, the world's first credit card. Within a year, 20,000 such cards were in circulation throughout the country; today, there are 1.5 billion--five for every American man, woman, and child. What in McNamara's day was a convenience that allowed the rich to dine out without cash is now a staple of middle-class life.

Credit cards have proliferated for many reasons. Some are economic: At a time when average earnings are stagnant, when sudden income drops bemuse of layoffs or health problems are common, and when public and private insurance systems have frayed, families increasingly turn to credit cards to serve as their financial safety net. The growing reliance on plastic is also about culture: Americans love freedom. Just as the invention of the mass-produced automobile gave us the freedom to travel wherever or whenever we wished, credit cards allow us to spend money in ways and at times that work for us.

These freedoms, however, make both cars and credit cards dangerous if they are used improperly. The difference is that in the past 40 years, we've taken steps to make automobiles safer. As cars became an integral part of middle-class life, traffic fatalities rose sharply. In the 1960s, thanks largely to the efforts of consumer advocates, Congress passed landmark safety legislation that led to mandatory seatbelts and rear-window brakes lights. The new rules reduced accident rates and made those crashes that did occur less deadly (the auto fatality rate has dropped 57 percent since 1966).

While cars continue to become safer, credit cards are becoming more dangerous. Of course, cards don't kill, but they threaten families in other ways. Credit-card debt totaled $685 billion last year, and the problem is getting worse: In the last decade, credit-card debt rose by about 70 percent. Although economists debate whether rising costs or rising consumption have contributed more to that trend, there is no question that most Americans experience the debt as a burden. Seventy percent of American families said last year that they are canting so much debt that it is making their family lives unhappy; three times more young people are worried about going deeply into debt than about a terrorist attack.

Credit cards are especially dangerous because of the business practices of credit-card companies. Buried in those offers you receive daily in the mail from banks like MBNA and Chase are fine-print contract terms not subject to negotiation. Cardholders who miss a single payment may be hit with two separate charges: a $39 fee and a penalty interest rate of 2499 percent or higher. Those who mistakenly go over their credit limit no longer have their cards declined. Their purchase is charged, along with a $35 fee and--you guessed it--the 24.99 percent penalty rate. These fees can quickly double or triple the underlying debt on the card. Perhaps most egregiously, even families who pay their bills on time can be hit with penalty rates. Under a practice known as "universal default," companies can raise rates based on a change in a customer's credit score, a dispute...