Unfortunately I am the undisciplined idiot with a ton of family expenses including college tuition who carries substantial credit card debt. I read this article and as I am so familiar with the highway robbery going on with credit card issuers I see no choice but to stay away from McCain at all costs. http://www.creditcards.com/credit-card-news/credit-card-presidential-reform-policies-1276.php
Nobody would have taken a credit card if it advertised itself at 25-33% interest rates. People are defaulting on them in droves because they don't give a damn about their credit rating when they are already under the thumb of these legal "loan sharks". Even the most conservative free market advocates among us recognize this for what it is... a shakedown. I would welcome government intervention within limits. I would think that a cap on credit card rates of , say 12-14% is more than fair to all parties. Most people signed up for less than that and have seen their rates go up 2 or 3x for no reason in many cases. In exchange for that permanent relief the payment would stay the same in order to bring down the balance even faster. Also the new limit on the credit card would be what it is at the time of the switch to the new fixed rate. That would prevent further reckless abuse on the part of the user. Likewise with ARM mortgages. We can rail all we want about financial Darwinism but this crisis cuts across all economic scales. Mortgage defaults are increasing every day. Banks are losing their asses, people are losing their homes and the rest of us are watching our property values plummet because of the exploding inventory. Make 30 year Fixed rate mortgages available one time to any and all who want to convert from an existing ARM. Don't relieve the debt or reduce the balance due and don't reduce the term. Take it or leave it. In my view that would stabilize the real estate market. Unlimited greed on the part of lenders and a government long asleep at the switch got us to this point. Uninformed, greedy or desperate consumers lined up for the "deals" Now everybody is in the same boat. I would tell the lenders... do you want to earn 14% on your credit cards and 6% on your mortgages or roll the dice and come up with nothing?
George, What is it about the Republican stance on this that would make you think they seek to get this thievery under control? Obviously McCain espouses the party line of a free market economy on credit card issuers which only amounts to robbery and deception. The electronic age of credit reporting has only given these financial hoods a license to steal...and I don't see where McCain sees anything wrong with that.
I don't think there is a Republican or a Democrat who has the balls to take on credit cards. If they force the interest rate down to what Krebs suggests, and that is a reasonable interest rate, then the credit card companies will stop issuing cards to people who shouldn't have them in the first place. That will be a political problem for either party. People are hooked on credit cards, it's hard to do business if you don't take credit cards, you can't check into a hotel without one these days. With lower interest rates banks won't issue cards to a lot of people who now have them, they won't issue them to students, etc. There will be some sort of uproar I guarantee it. You know those check cashing places, well the credit cards are just a more sophisticated scam than those places, but as I said we're hooked on them and they will be tough to change very much. We'd all be better off if we only had debit cards. Terry
Terry....the complaint isn't about the already high 12-14% interest rate. The complaint is that when you pay your utility bill 30 days late and it's reported to the credit bureaus then the credit card company sees that as an exorbitant opportunity to rob you blind by raising your rate to 28% or higher. That is un-American and it is thievery and for our leadership to allow that to happen is outrageous.
Universal default is reprehensible. I was unaware of it until I read the linked article, and I was shocked. Almost as bad is the idea that an interest rate increase (not the penalty type, just an increase by the company) can be made applicable to an existing balance as opposed to credit purchases beginning on a given date. You know who's behind this...
MCG , I never mentioned a political party once in my dissertation. This is an apolitical problem that affects everyone to one degree or another.
I only politicize it George because the extent of the predation by credit card companies has blossomed in the last several years under the present watch and then incredulously McCain sees it as a non-issue. This issue alone....by itself would make me vote Democratic and it would be the reverse if the opposite opinions were attached to the respective partys.
If you believe as I do that McCain , due to his long tenure in the senate, is a big part of today's problems, then he is very difficult to vote for. Then you have Obama who is as green as grass and is clearly targeting the "wealthy" ( which includes you and I ) and of course Hillary, who lies so much and comes from a rich tradition of lies and deceit. Three completely unacceptable choices. I'm considering, for the first time in my life, sitting this one out.
I guess I should actually read the article before commenting. The idea of Universal default is abhorrent to me. I can understand that if you are applying for a new loan or a new credit card why a lending company would look at your credit report and determine your credit worthinness and an appropriate interest rate. But if universal default means that if you are current with your credit cards and you are late with a payment to some other creditor then your credit card interest goes up that doesn't seem right. Granted if your credit report shows a troubling pattern that indicates you are getting in trouble and may start to default on your credit cards next then I think they are within their rights to change the limit on your cards so they don't in essence lend you even more money. But they make plenty of money with the current interest rates they don't need to be going into the levels indicated. Terry
On the street they call it loan sharking. The arbitrary rate hikes are the "vig". My sister pays her bills electronically like many of us do. She made one credit card payment that was not reflected until one day past the due date even though she processed the payment two days in advance. They raised her rate from 19.9 % to 31%. When she called them they refused to discuss it. That bank was Chase by the way.
Yeah, it's all on the Republicans...the Dems will protect everybody from being "undisciplined idiots." :roll: Whatever. Ohio Dem House Leader Connected to Payday Lenders Dem Holding back Republican Reform
I must confess to naivete regarding this topic. I have a Notre Dame Visa which I procured years ago which was subsequently bought out by Chase. The card accumulates airline miles at the rate of one dollar/mile and has just raised it to two dollars/mile as I have used it schedule a trip for other members of the family for a reunion of sorts in Canada in July. I pay for everything by Credit Card including charitable contributions including church contributions. I have taken trips with family members since I no longer trust myself at the airport scene. I went to a family reunion in Nebraska last year and the card mileage covered everything for my daughter and me including the car rental. Chase keeps sending me an invitation to switch to a business card which involves an annual fee without air miles. I, of course leaped at that..not. I have not paid a dime in interest since I got the card as I pay the balance every month. At one time when Barb and I were at out place in Arizona, the Post Office screwed up and sent our forwarded mail late. I don't recall if Chase was the bank at that time, but when I called about the interest charge and explained, Visa dropped the interest charge.
I should add that the ND Visa(which I still have) sent me a note that they have not been charging me the annual fee for miles for several years. They said they would not bill me for this mistake but would bill these fees in the future. I have never seen such a fee on my statement, so I don't think they are billing me yet.
Chase can be one of the worst although I don't know who is better than others for sure. Terry....George's sister is a prime example and it is rampant what they did to her. This is simply un-American....and is unacceptable and make no mistake it has proliferated in the last 5 years or so and has gone unchecked. Read again the candidates that actually have a clear design on how to curtail this robbery and then read about the candidate who is oblivious or worse yet in debt to those ass@oles who perpetrate the crime on unsuspecting tax paying Americans.
Geez.....fellas, there are other options out there. Nobody held a gun to your head and forced you to incur the indebtedness with that particular product. If we don't like it, use something else or seek the wisdom of VICM....it is not somebody else's fault. There is a vast array of lenders who offer card products and the terms can vary widely...shop. If you don't like your provider, move....or it you don't like any of them, don't use them. Their usage is not a mandatory part of life, it is a decision that you have made. George, if you froze lenders to 10% on cards , there wouldn't be any lenders.....if would be the equivalent to the govt forcing you to offer office machines below cost.
You're telling me that lenders won't take 14.99% return on a credit card? That they would prefer an individual default? Or that they would pack up their tents and go out of business if they can't make 30%/ Nonsense. If you were flush with cash before this calamity you might be under the false impression that you are "bullet proof". This is a runaway train and its gaining speed and it hurtles downhill.
Buck-T, it's important to remember that the majority of people aren't as financially savvy as those on the higher end of the economic spectrum (or don't have access to those that are). I don't advocate an artificial ceiling on interest rates, but certainly there should be prohibitions against things like universal default and retroactive interest increases unrelated to payment history. A ceiling on fees would certainly be a step in the right direction as well.
I did not say anything close to that.....those are your words not mine. If you're going to put words in my mouth at least make an effort to be reasonable. If you forced them to 10% they would indeed pack up their tents as that would be below the cost of them providing the service. At 15%, under normal conditions, efficent lenders with sufficient scale and decent credit quality barely earn the cost of capital. Processing the billions of card transactions that are generated in this economy, eating the fraud, dealing with the charge-offs and complying with the mountains of regulatory requirements ain't cheap.... Freezing prices, rationing credit and adding another layer of regulatory cost will surely be a great thing for the economy. The next time such a solution yields a productive result will be the first......
BDR, I hear what you're saying.....there are shylocks in every business and the banking business is no different. There are some that offer more consumer friendly terms than others and I believe that it's the responsiblity of the consumer to educate themselves and make an informed decision. The disclosure requirements on financial institutions are stupendous and costly. The information is available. Philosophically, I just don't hapen to believe it's the role of government to protect people from themselves......and I also believe in the old saying that "....the meek shall inherit the earth, but not the mineral rights" :wink: