Debtors Revolt

[cantretire]

Unfortunately, the government had usury rules in effect for many years and then, in 1994 I think, they eliminated them. That's when all hell broke loose and we saw the introduction of every form of predatory lending that exists today: payday loans, tax refund anticipation loans, universal default on CCs, etc. Those things weren't around until Congress repealed the usury laws. Really, all of this mess is the government's fault for allowing lenders to do whatever the hell they wanted.

Yes, personal responsibility is critical, but if someone has a credit card balance at 5% and is perfectly comfortable making the payments and suddenly the rate goes to 29.99%, that can screw up even the most responsible person. Then if the CC also increases the minimum payment from 2% to 4%, it is pretty easy to see how even someone with a good financial head on their shoulders could quickly end up in trouble.

How many of us would be ok if our mortgage rate or auto loan rate suddenly jumped from 6% to 30%?

Bingo!

That's the problem the girl in the video revolted against. She had a 12.99 rate and was paying it down and paying on time. They raised her to 29.99 FOR NO REASON. The CCs (all of them) excuses are that they are reacting to the few people who aren't paying. WTF? So, responsible people are suffering because of the skanks.

My Discover was a nice BT at 2.99% for the life. Of course, there is the fine print that throws that to the wind. I received a letter that it is going to 12.99 in November and they are raising the minimum to 5% from 2. I was laid off in January so this will be difficult. Fortunately, it's not a huge balance and I'll be moving back into my parents house in January, so that will help. Not everyone can do that.

Most people don't realize just how much a 29.99% interest rate will cost every month, even on a low balance. Those of us who are out of work or underemployed do not have the funds to pay them off. The only other option might be a personal loan with a lower interest rate, but what banks are giving out loans?

[JourneyCC]

Changing the rules (percentage rate) mid game (after purchase) is called unsportmanship in sports. So why call it anything but greed in the credit world? Yes everyone agreed to play the game and abide by the rules, and that the rules could be changed, not arguing that. But shouldn't all parties agree before the rules are changed after purchase? Fair? I think not.

Just a sore spot with me, and I'm usually on the lendors side because of foolish spending.

[Joan.of.the.Arch]

Bingo!

That's the problem the girl in the video revolted against.

(Side note here, but let's please not call the woman a girl. Girl is not the term for an adult.)

[lovcom]

Hadn't you noticed that ethics had been slipping for a long time. Personally, I thought it took a major hit with Nixon and a yet another low with Enron executives. We who believe we need to conduct our business on the 'high road,' are sneered and laughed at by the majority.

Ethics too a hit with Nixon?

Ethics took a hit before 500 BC!

This is nothing new....

[lovcom]

I tried to watch her show once but just couldn't continue. It is so boring. I think the Can I afford it? thing is just plain dumb. Come on, you know if you can or can not afford something. You have 400 a week coming in, the payment for the house is 900 a month. That will leave you 700 for a full month to pay all your other bills, buy gas and buy food. unless you have no other bills at all you cannot afford that house! I know that I have made major mistakes in financial decisions in my life but at least I can say I am learning.

You give the general public way too much credit.

And just because you have money left over after paying your bills does not mean you can afford that Lexus or Bimmer. This is the problem with Americans...they think just because they have money left over after paying their monthly nut, then can afford that $600 Lexus pmt....the definition of the world "affordability" is miss-placed with the general public, and this is why Suzie has that segment. Not everyone is as responsible as you ;-)

[disneysteve]

You give the general public way too much credit.

And just because you have money left over after paying your bills does not mean you can afford that Lexus or Bimmer. This is the problem with Americans...they think just because they have money left over after paying their monthly nut, then can afford that $600 Lexus pmt...

Exactly. It is the same reasoning that makes people think they can afford the big screen TV as long as they can afford the monthly minimum payment on the credit card bill.

[lovcom]

Yea, near my home in OC, every weekend I drive to the market, and in the parking lot one can see perhaps 15-25 late model luxury cars for sale...and in a middle class neighborhood too...middle class driving rich people cars...makes you wonder...

[Radiance]

Both sides are abusing

I see it very simple, if you charge you should pay back. You used money that wasn't yours and need to pay for that "convenience"

But if you charge you should pay back "as agreed" I don't find it right for the banks to change that agreement as they see fit. Come, take this 8% card!, oh, you know what? Let's make it 23%, yeah, and we just came up with a $35 annual fee, you know? and, I know you ere counting with a 3000 limit, but now it is just $500, yes, that sounds about right....

I have CC debt, I made stupid mistakes, but I am taking responsibility for them and I refused to look for a settlement. I am paying back even though their crazy fees and terms changes are making it more difficult to pay them. I will pay them and vow to never use them again, not for the bad creditors.

When I am done, I will only keep those cards that have no annual fee. Also I will use only the ones from creditors that treated me right.

I have
1 care credit (to be used for health providers only) , no balance, I am keeping it only because there is no annual fees, I have not used it in more than 3 years. Doubt I will at 23%.

1 Master Card, that I need to close, just paid it all, they have annual fees, forget them.

1 Visa, they are great, no additional fees, no exagerated increases on rates, no annual fee. It is from my credit union. I have a balance with them. Will keep after I pay it off and use for the rewards and pay at end of month.

1 Amex, has a balance, they are horrible, I am keeping it after paid only because there is no annual fee. Doubt will use it again.

1 personal loan, very good practices, from credit union. After I pay it I would not hesitate to take another for emergency reasons (medical and... well medical is the only emergency reason I can think off)

1 car loan, very good practices, from credit union. After I pay, I would not hesitate to use them again, but will try to buy next car in cash.

Conclusion: there has been abuse on both parts, debtors and creditors. I can only control what I do and I decided to take on the abuse and work hard to end my obligations with them.

[maat55]

[QUOTE]

But if you charge you should pay back "as agreed" I don't find it right for the banks to change that agreement as they see fit. Come, take this 8% card!, oh, you know what? Let's make it 23%, yeah, and we just came up with a $35 annual fee, you know? and, I know you ere counting with a 3000 limit, but now it is just $500, yes, that sounds about right....

Remember, "as agreed" was in the contracts fine print. People should not be surprised when CC's use this option. I have no compassion for either party, carrying an balance is bad business at any interest rate.

Conclusion: there has been abuse on both parts, debtors and creditors. I can only control what I do and I decided to take on the abuse and work hard to end my obligations with them.

The responsible conclusion. The individual ultimately chooses this agreement. CC companies can only take advantage of willing participants.

[Seeker]

Withdrawn -- looks like I double-posted

[Seeker]

I'm never one to make that comment as I prefer to keep religion out of the conversation but I do understand how folks feel this way. "Thou shalt not steal" certainly comes to mind. If you borrow money and don't repay it, that is stealing.

I prefer to focus on the legal aspect, not the moral aspect. If I borrow money, I enter into a legally binding agreement to repay it. That is true of a credit card, a mortgage, a student loan, an auto loan, whatever. If I don't repay it, I would fully expect to be punished accordingly. I, personally, would never voluntarily not repay money I owed. Only if my circumstances were such that I was absolutely unable to repay it would the money never be returned to the lender.

I agree with this 100%.

But I can also see the other side.

Many people who borrow money via credit cards or whatever means, don't INTEND to repay those debts. Many many people I know, just pay the minimums, never really understanding that this over years and years of time, that this does not get them anywhere. And if something "unplanned" happens, then they may not even be able to pay those minimums.

I agree with the fact that: if you purchased an item on credit and you were paying say 8% interest on that loan, then that rate (moralistically) should be locked in... but for how long? Should the length of time of the loan be a factor? Should length of time be built-into all debts?

If the economy recovers and people get more from saving (which assuming inflation, interest rates could drastically rise), then the locked-in lower interest rate on debts will not be paid off either.

[disneysteve]

I agree with the fact that: if you purchased an item on credit and you were paying say 8% interest on that loan, then that rate (moralistically) should be locked in... but for how long? Should the length of time of the loan be a factor? Should length of time be built-into all debts?

For credit cards, the maximum length of the repayment period is set by the minimum payment requirement. Personally, I think the minimum needs to be substantially higher than 2% or 4%. That would eliminate so many problems. Make the minimum monthly payment 10% of the outstanding balance or even more than 10%. That way, even if a person pays just the minimum, the debt will be repaid in a reasonable period of time.

I just checked a CC calculator to give an example but the highest minimum payment it lets me pick is 5%.
$5,000 at 15%
2% minimum will take 331 months (27.6 years) to repay.
5% minimum will take 97 months (8 yrs) to repay.
10% minimum would only take about 4 years to repay (which is still too long IMO but at least reasonable).

[Scanner]

Even smart people get duped. (I guess I am smart, lol)

I just opened a business credit card with Chase and did a balance transfer of $1000. I didn't read about being assessed a $30 balance transfer charge even though the transfer was 0% and marketed as such. I suppose it was somewhere in the "fine print" but you just kinda assume when doing business that the other person is trustworthy.

When that doesn't happen, society and commerce start to erode.

It becomes like a "bottleneck."

Think about if DisneySteve or I at the front desk had to call in an 800 # or run a special scanner on a patient check every time they paid a $20 copay. Think it would slow down our business (and our patients?)? Yes it would. Think it would be bad business for everyone all around? Yes, it would.

So, yes, I think the industry need regulation and instruction on morals to be a stronger business, not a weaker one.

And when you extend the hand of business to someone, it's your obligation to set the tone for "morals", not the consumer of the product or service.

I would have still done business with Chase Card Services. . .I just would have paid my balance on my current credit card and not floated the balance. They swindled $30 out of me. . .fine. . .I probably won't fight it. But I just now announced their practice to this public forum and it just slows down permanent growth for them.

I may be old fashioned but I do think strong morals is good business.

[jasonnoguchi]

I don't make personal loans Jason - so, nothing to be gained here! Mainly because I'm a cranky creditor, believe it or not, I actually expect to be top of the list when debtors have money to pass around! Personal lending is not the game for me.

Indeed, I was contemplating entering the personal credit market myself but was discouraged from it by my other business partners who showed me some daunting statistics. people just don't pay back..sigh...

[jasonnoguchi]

Bingo!

That's the problem the girl in the video revolted against. She had a 12.99 rate and was paying it down and paying on time. They raised her to 29.99 FOR NO REASON. The CCs (all of them) excuses are that they are reacting to the few people who aren't paying. WTF? So, responsible people are suffering because of the skanks.

My Discover was a nice BT at 2.99% for the life. Of course, there is the fine print that throws that to the wind. I received a letter that it is going to 12.99 in November and they are raising the minimum to 5% from 2. I was laid off in January so this will be difficult. Fortunately, it's not a huge balance and I'll be moving back into my parents house in January, so that will help. Not everyone can do that.

Most people don't realize just how much a 29.99% interest rate will cost every month, even on a low balance. Those of us who are out of work or underemployed do not have the funds to pay them off. The only other option might be a personal loan with a lower interest rate, but what banks are giving out loans?

Don't they have fixed rate mortgages anymore? You know they can screw around with the rates on a variable rate mortgage right from the first day, right? Again, its all about choices.