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Reply With Quote....Which will most likely lead to the next wave of defaults and the next wave down on the market(that already went up to much to fast).Say adios to the quick recovery.
This is an unintended consequence of the government "protecting" the people from high interest rates.Originally Posted by bonehead
The bill Obama signed, which prohibited the credit card companies from arbitrarily changing rates, took away their defense against people with bad credits.
It used to be that the bank can jack up interest rate on a card if the guy is deemed a bad risk, to compensate for the likelihood of him defaulting. Now the government comes in and says "you have to jump through all these hoops in order to raise interest rates on high risk borrowers because we want to protect them." As a defense, the banks jacked up interest rates for everyone, good or bad risks, to what normally would have been rates reserved for bad risks only.
This is a very logical step to take and one which was anticipated by numerous people, including me.
Government "protection" will only lead to a distorted market. The more "protection" we have, the more the market will be distorted. Rent control will lead to shortage of housing. Interest limitations will lead to high interest rates for everyone.
"Only Nixon can go to China." -- Old Vulcan proverb.
....Which will most likely lead to the next wave of defaults and the next wave down on the market(that already went up to much to fast).Say adios to the quick recovery.
Those who know don't speak
Fools seem to be artificially made,'cause there's a hell lot of them and they have no disease
The way I understood it is that the credit card companies still can raise the rates. They just needed a better reason than, Hey this guy was 12 min late on his student loan lets bend him over and ass rape him over his Master card account" If the guy missed a payment on his Master card then the Bank still has the ability to reexamine the risk and act accordingly.
I am in a 30 year mortgage. After I signed the payment is fixed as long as I can make those payments on time. What my credit rating does in those 30 years is totally irrelevant as long as the payment is made on time. It is a good system and it works for both parties. There is nothing wrong with credit card companies examining a customer before making a contract. Arbitrarily changing the original contract "at will" is a load of crap. Every credit card arrangement has a standard rate and a default rate that both sides agreed on in the beginning. Any changes should be looked on as a breach.
I do not support government intervention in the business affairs of a private company.
Several years ago, when we had a credit cards, I got a card from a company that boasted a very low rate which, for at the time, was low. We transferred a small balance and carried it from month to month, always paying and always on time. After about two years, I happen to look at the statement and noticed that the APR was up around 18%. I talked with my wife to verify that all was well with the payments, etc, then called them. They could give me no reason why the rate had been jacked up more by more than 12 percentage points about six months earlier. The customer service person offered to reduce the APR back to where it was supposed to be, which I expected, but would not or could not meet my demand that they reimburse me for the overcharged interest amounts. So I offered my anus for osculation and closed the account.
We've since closed all of our credit card accounts, to much much wailing and gnashing of teeth by the various companies.
I no longer post here.
I've never owned a credit card, and I've never used a credit card. Consequently, I have no credit history. I guess eventually I need to get one because no credit history is problematic.
Station 22:
Are you absolutely sure they're all closed? Both Mary & my (then deceased) father had trouble with that. During probation of my father's estate the County Manager finally just refused to pay the balance of one of my old man's "closed" cards, told the company to stick it & made them like it. Probably earned the sweet old daffy (& dead) guy a terrible credit rating, though. Mary had a terrible time closing one of her accounts due to flagrant bad faith on the part of the lender. The idiots would agree to anything. Just wouldn't do it. Dragged on for months.
At last. All gone.
Prof
Don't own a credit card, never owned any before, i just live on my debit card. However, credit cards can be advantageous for those kind of vulnerable expenditures such as gas station fill ups, holiday expenditure, online purchasing etc because your are covered for fraud. Most bank debit cards do not provide cover in cases of fraud, if things were to go heywire on your holiday and you check into a hotel run by the mafia or fill up at a bogus filling station and they clone your card, you won't have to repay the funds fraudulently withdrawn. On the other hand imagine if all your life's savings were wiped out and there is no recourse for you.
For those who have credit cards, is it true that if you pay all your credit card bill on time every time you don't have to pay a penny more? I have been talking to people who have credit cards and they say you don't part with a dime if you pay on time. I find that incredible because the question then is how do credit card companies make their money? Im really considering signing up for a credit card now because if really this is the case, then a credit card could be a convenient way of managing your funds. Instead of using your funds in the bank, you just let leave them there and use your credit card instead. When the month is up, pay the bill with your bank funds which would have earned you a tidy interest - me thinks.
Last edited by Zinja; 20 Dec 09, at 01:29.
Chase has decided to royally screw me so I'll be taking my business elsewhere come January 15. Never mind that I've never missed a single payment. It's just that I have a high balance on it and apparently Congress' "here we come to save the day" idiocy (as bonehead and gunnut pointed out) enabled/emboldened them to cry poor mouth and jack up my rate to a criminal 20%
I'll have paid off one card by then and I'll do a balance transfer from Chase to that now-clean card. I'll pay a small fee for the privilege, but the interest rate will be 4% less.
Not that it's a huge savings, as I'll have the entire balance paid off by June, latest.
And even if there wasn't any savings, I'll be damned if I pay Chase one cent more in interest.
BUT...I'll be leaving all accounts open. Closing them hurts your credit rating. You just have to cut up the cards themselves and, if possible, put some kind of "lock" on the account.
I figure I'll call the credit card company and tell them that I'm concerned about security blah blah blah and can they somehow lock down my account until I personally call in via phone and unlock it? Prevents fraud, keeps the account open and preserves my credit rating.
MAN I can't wait to be out of debt. I'm hoping to greet birthday number thirty five as a credit card debt free man.
Among the community of nations, Pakistan today stands out on one hand as a petty thug brandishing a dangerous weapon, and at other times as a concubine, sleeping with anyone willing to pay for her expensive tastes. ~ Tarek Fatah
careful, the new laws only apply to the old card terms. The new rates are tied to the base lending rate and then add a fixed rate on top of it. With inflation coming sooner or later make sure the card your switching your balance to hasn't set up a switch when the new laws take effect.
It won't really matter either way. The balance will shortly be history anyway...due to my tearing $800+ chunks out of it every month.
Among the community of nations, Pakistan today stands out on one hand as a petty thug brandishing a dangerous weapon, and at other times as a concubine, sleeping with anyone willing to pay for her expensive tastes. ~ Tarek Fatah
It's been nearly 10 years, we get no statements to alert us that they are out there, trying to drag us down into indebtedness.
Just think how great you will feel when it is paid off and you can say to them, "KMA.") You'll prolly sleep better at night for your efforts.
I highly encourage y'all to listen to Dave Ramsey on the radio. He gives sound advice.
I no longer post here.
You might want to check on it, even if only for kicks and giggles.
"If it's important enough, you can't be too careful"
Oh indeed! I'm looking forward to socking away lots of money into savings and retirement and also looking into buying a house. The housing market down here will almost certainly be still in the toilet by then, so I should be able to snap up a really good deal.Just think how great you will feel when it is paid off and you can say to them, "KMA."
Among the community of nations, Pakistan today stands out on one hand as a petty thug brandishing a dangerous weapon, and at other times as a concubine, sleeping with anyone willing to pay for her expensive tastes. ~ Tarek Fatah
I would certainly check. I watched "Billy" King, the County Manager, raving & tearing his mostly non-existent hair out at meetings over my old man's credit card "debts". One of those in particular I had paid more than $16,000 to "close." Naturally only a small part of that was principal. Didn't get all of it, of course (hard to keep up with compounding if the company doesn't want you to) & the microscopic remainder had regrown to several hundred bucks by the time the estate was in probate. Apparently there's some sort of process through which small balances get ignored as far as invoices are concerned until they reach a certain amount. Under their computers' radar. Right. Might even be legal.It's been nearly 10 years, we get no statements to alert us that they are out there, trying to drag us down into indebtedness.
Just think how great you will feel when it is paid off and you can say to them, "KMA."
I highly encourage y'all to listen to Dave Ramsey on the radio. He gives sound advice.
The others were similar. There was a Rich's store card that had a $385 balance based on a single $15 purchase that had actually been paid off with interest much earlier by my father in response to the amount actually billed. The rest was interest on a tiny unintentional remaining balance, multiple late fees + interest & late fees on the growing sum.
Mary wasn't at all inactive in trying to deal with hers, unlike my ill & befuddled father. She spent a bunch of time on the phone trying to get hers closed. Just about drove her crazy. All the (probably outsourced) phone bank hamsters were very polite, but nothing got done. It finally took multiple threats of litigation to get that account closed.
As for you guys who have, in good sense & with all good intent, informally rendered your credit accounts inactive by simply not using them for credit, watch out. Hear about some of the new goodies the card companies have come up with prior to implementation of the new limits? Like "inactivity fees?" No shit. As soon as we get notification of that we start buying a tank of gas apiece on the cards & paying them off immediately online. I mean, it's still pretty hard to check into a hotel without a credit card & impossibe to reserve a room in advance.
Prof
Just checked the card that graciously gave me a 1 point reduction in interest.
Sure enough, there it is. Then I re-checked the balance transfer offer...and the balance transfer interest rate is only good until April!
I wonder if that means my regular interest rate will increase as well.
The bank giveth, the bank taketh away.
Do I need any more stark reasons to avoid credit cards? No thank you, I have plenty already.
Yeah that's been kinda floating around in the back of my head and your solution sounds like a great idea: Rotate each card each month for a tank of gas and then pay it off online immediately. Heck, I might even let it roll over a month so I can keep my sterling silver payment track record keep feeding my credit score.
Among the community of nations, Pakistan today stands out on one hand as a petty thug brandishing a dangerous weapon, and at other times as a concubine, sleeping with anyone willing to pay for her expensive tastes. ~ Tarek Fatah
Zinja:
As much as I dislike credit card purchases, you're dead right about their advantages when it comes to identity theft. In addition to your suggestion I was able to easily trace some illigitimate purchases on my father's cards to the perps, even long after the thefts, by getting the stores to check back & show me the signatures & identify the items bought, which helped to identify the thieves as a relative & our daytime housekeeper/caretaker. The majority of the thefts, unfortunately, were in the form of debit card cash transactions which were legally untraceable, the only evidence pointing to the (same) thieves being the location of the grocery stores involved.
Prof
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