Just heard the days of mastercard...visa etc are just about over. Credit is being totally stopped by banks in near future. CASH ONLY society
....nonsense. Sheer, absolute nonsense. Nothing more than political posturing at its finest. There is no question of material government intervention....the only question is magnitude, structure and timing of which there is much to debate.....obviously.
http://www.walletpop.com/loans/what-the-wall-street-crisis-means-for-you?icid=200100397x1210089127x1200637909
Lower the rates on cards to 8-10%. Keep monthly payments the same to reduce principal at an accelerated rate. Cut remaining unused card limits by a percentage. Monthly card payments will go down as principal is reduced. Cash flow is the key. If you cut off all credit you will trigger massive defaults and business closures that will make what we've seen look like a picnic. Don't forgive debt but give people a chance. But what do I know? I'm just a small business owner. Happy Holiday, Joel!
Careful George.....some here will be all over you for such a fair and reasonable suggestion when it comes to reeling in credit card gouging. I do agree that getting paid back even at less than extremely exorbitant, loan shark type rates is better than never getting paid back at all.
Dave, I have no problem if you and George want to do that...as long as you buy the paper you can lower the interest and the payment terms as far as you want. Predatory practices happen...you have documented them...but I think that most of this crisis has nothing to do with credit card gouging.
As long as people use the "cards" and are willing to pay they wont take away the cards's trust me ..... problem is that people use the cards knowing they cant pay it back or have no intention of paying it back ... I see it day after day I am shocked and dismayed that we have come to be a society that only has it hands out wants everything given to them just because .. they use the cards get the mortgages they cant pay then demand you lower the payments or interest or they will file BK ... my response to them then file ... companies are not being as lienent as they use to be about giving new credit after a bk like they were before ....I wish you could hear some of the thing I hear all day ... about how and why they cant pay their bills it is amazing what they can come up with. but as long as people are willing to let the credit card companies do as they please they will be there ..its how we make our money
Here is an example of what does happen every day with credit card lenders.... Say you agree to borrow $20 from me because I have been sending you emails or whispering overtures in passing each other in the hallway every few days about what a great credit risk you seem to be and if you answer a couple of questions for me I will be glad to lend you that $20 provided you pay me back $22 which we both agree to. A few days later I hear through the grapevine that you have been offered the same deal by George and you have responded by answering his questions and agreeing to borrow $20 from him with the same terms. Upon hearing this news I see my opening for extortion and now decide that because of the George news you now owe me $27 and there is no recourse for you. I will hound you and ruin your credit unless you agree to pay me back this new amount that I have arbitrarily decided you now owe. This is the kind of B/S that is going on in mainstream America....
I have not heard of a single time that the above analogy relates to the credit industry. Now, simply add that I screwed my own credit because of late payments to you or another creditor, and you gained knowledge of how I had not lived up to my obligations. With that added info, I have heard of creditors raising your interest rate. Late payments is the first sign of someone getting in over their head. The key is to not take on more debt, good or bad, than what you can easily handle.
Please tell me which credit lenders have done this? I too have never heard of this and I have rather extensive dealings with both credit cards and credit card debt as a result of my divorce. A few of which, I had no idea existed until I was hit with the collections notices.. However, they were all valid accounts that were taken out by someone who was a verified signature on my checking accounts, ergo I know owe them. If anything, that was my real beef with the cc industry.. That a husband/wife could literally use their partner's credit as leverage to improve their own, and then leave the other person holding the (financial) bag.
Card companies look for excuses or reasons to raise your rates to exorbitant levels. You apply for credit in one place and it can trigger a high rate somewhere else on an existing card even though you pay the offending lender completely on time. The weird thing about all of that is their excuse is that you are now a higher risk so they raise the rates so high it becomes very difficult to meet the repayment obligations. As some here have put it so correctly....the only way for sure to avoid this great American rip-off called credit cards is never use them period or pay them off monthly......which is why Amex is my personal favorite because monthly is the extent of their terms.
If it drops your credit score to a point that triggers a reevaluation of your interest rate, that might happen. Normally it will not. If you have been on time with all your payments over a long period of time... say seven years... then applying for credit will not lower your score. I remember the examples you gave when you first started this attack on the credit card companies. You used examples of being late on payments to one creditor triggering a higher rate with another creditor. Now that you see the flaw in that thought process, you decide to explore the "new credit" side of things. That as well does not hold water.
Tom, The way the cards are set up with mailing you the bill with only a couple of weeks to respond and then having your mail response take much longer than regular mail to register a payment it is almost unavoidable at some point or another that somebody is going to be late with a payment. The reasons behind the lateness don't matter as long as a lender can find a reason to raise the rates. And these default rates are nowhere near the originally offered rates. I find out a lot about some of you who continue to choose to defend this practice as fair and honest. It's very enlightening.
Dave, What you will find out about me is that I determine how to make this a non-issue for me and work it appropriately. I made a spreadsheet with all of my bills and their due dates and the dates I normally receive a bill. If I have not seen a bill within a certain window, I call them. If it is getting close to the due date (within two weeks), I make an online payment. It is rather simple to make certain that your bills are paid on time. It just takes a little effort on your part.
Well said Tom....even in the midst of this economic environment, of all the millions of US households that own credit cards, less than 5 out of every 100 are delinquent in their payments. That means that over 95 out of every 100 households in the US that own credit cards somehow magically manage to pay their bills on time......
BT, It has always been my opinion that 95% of what happens to me is determined by how I react to outside influences. 5%, whether good or bad, I can't control. If I put a little effort into what I can control rather than sitting back and whining about what I can't, things usually work out pretty well.