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Old 11-19-2009, 01:00 PM
 
2,087 posts, read 1,345,853 times
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Quote:
Originally Posted by DC at the Ridge View Post
That's nice for you. But what if you were the AVERAGE American consumer, and you had, what, the average is six credit cards, and the total debt is something like $6,000. If you responsibly made your payments on time each month, were never late, paid over the minimum, do you think when they jack up your rate to 26%, that you can just cancel each card? I mean, you can, obviously, cancel all your cards. But what impact does that have on your credit score? Cancelling a card can have a negative impact on your score, cancelling all of them can have a profoundly negative impact, because you are cancelling your ability to borrow. Then, when you do need to borrow, to buy a house or a car or even to go back to school, your credit score places you in a high-risk category where you pay even higher interest rates, IF you can get the loan to begin with. Some responsible behavior is not rewarded by credit card companies, and that's something that you have to consider.

increased rates is not the only thing either minimum payments have tripled or worse for many.
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Old 11-19-2009, 01:00 PM
 
6,550 posts, read 12,606,614 times
Reputation: 3152
Quote:
Originally Posted by Mathguy View Post
Yeah, and the original bill passed 90-5. The comments made throughout this thread tell me that several people didn't bother reading the article.

The level of partisanship here is so bad, the utter stupidity so thick that it's mindboggling. The same reason I don't listen to Rush, Hannity etc.
What are they missing?

Quote:
Originally Posted by article
"We worked long and hard to enact the safeguards included in the Credit CARD Act," said Dodd. "And no sooner had it been signed into law, but credit card companies were looking for ways to get around the protections this Congress and the American people demanded. This bill would end those abuses and further protect customers today."
The Senate schedule is packed with nominations, health care and appropriations bills, leaving no time for a prolonged floor fight over credit cards.
The only way Democrats could pass the bill in time for the holidays would be with the support of the GOP -- all but five of which voted for it initially.
Dodd, on Wednesday afternoon, asked for unanimous consent to move the bill forward.
"On behalf of several senators on this side of the aisle, I object," said Sen. Thad Cochran (R-Miss.). And that's the end of it.
Sounds pretty straight forward... They need Republican support to get it done in time, the Republicans made it clear they would not be supporting this in a blanket statement by Cochran.....
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Old 11-19-2009, 01:23 PM
 
13,072 posts, read 11,071,539 times
Reputation: 2606
Quote:
Originally Posted by DC at the Ridge View Post
The problem I have with it is that by raising interest rates to 30-35%, and by increasing penalties and fines, they are actually increasing the number of people who will eventually fall into bad standing. Because these rate increases are unprecedented. Why is it that some lending institutions can make a reasonable profit on a car loan at 8% interest, but that they cannot make a profit on a $15,000 credit card at 8% interest?

There is a point when the fees, penalties and usurious interest rate has more of a role in a credit card holder defaulting than that credit card holder's lack of financial intelligence and responsibility.
Sure this may cause some who are on the verge but are able to pay on time and stay in good standing to have issues possibly taking them into bad standing, but this is another problem with government stepping in and trying to regulate.

Think about it though, the problem with the CC companies before legislation was that those who were irresponsible were amassing fees, fines and destroying their credit to the point where any type of business they did resulted in large interest rates (people buying cars/houses with bad credit at 20+ interest rates or wild loaning schemes because they couldn't qualify for lower interest).

These are the same people who will go out to the check cashing places and borrow against their check at 100-200% interest, make frivolous purchases on items they didn't not need and really couldn't afford. These people never paid on time, were often multiple month late on payments and honestly really had no concern about the consequences or cared to think ahead. This people won't change and will continue to operate in this manner regardless of how many "breaks" you give them.

On the other side of the coin, you had the people who used them for convenience, on occasion might pay the interest (on an extended trip and just counted the interest up as another expense until they got back to pay), had low interest rates because they had good credit, and were using the rewards programs to make the card pay them rather than them paying the card. The CC companies love people like these as they get money from the transactions so they constantly came up with new plans of benefits for these customers.


Then you have the people in the middle. The people who pay on time (or in rare cases miss an on time but work with the CC company to stay in good standing), but pay interest because for various reasons they just don't have the income at that moment to produce cash liquidity for various issues that may arise. These people were not the ones having problems with the CC companies. These are responsible people who leaned on the CC (good or bad), but held to their requirements.


The legislation doesn't help person in the middle as I said, they weren't being slammed by the CC companies. It certainly doesn't help the people who do not pay interest as all of the benefits are being cut by their use due to the regulations putting pressure on the CC companies.

Who does it benefit? Those who in all honesty are already abusing the system. They are the people who bought homes far above their ability to afford. The people who bought 40-60k cars on leases at high interest rates even though they couldn't afford them. They are the people who maxed out their credit cards, play games with their debt collectors and essentially cost the companies money if they can not take action with fees, fines and penalties or increased rates.

So, again legislation attempts to regulate the market by removing responsibility from those who abuse it in the first place. In the process, their "good intentions" end up putting pressure on those in the middle. As you mentioned, what about them who have amounts and are making the payments while they transition to a better handle on their expenses? What about those who had an unexpected expense and their only option was to use a CC while they paid it over time? What about those who used it as a source of benefit? by actually making money on the cards?

These people pay their bills on time and use their credit responsibly. The legislation will actually hurt the responsible while it absolves the abusers of responsibility. Like most of these "regulation" plans by the government, they look good on paper and they sure sound good at rallies when used to claim they are protecting the consumer, but in the end they are shackles for the responsible and handouts for the irresponsible.

Now some companies are really taking advantage of this in a unethical way. My bank raised mine, but it was only a 3% increase (granted my Credit rating is excellent), but there are others who are being unreasonable. Those companies however were unreasonable in the first place and had unethical scams and catches far before this issue. Ive dealt with some in the past (some who would hold your payment past the due date to charge you a fee), but I also resolved the issue and closed them down as they did terrible business. The regulations won't have too much effect on them as they operate on the edge of illegal activity often anyway.

Most responsible people with acceptable credit ratings won't see the "35%" unless the institution is garbage anyway. Most will see an increase and my guess is it will be relative in many ways to their existing credit rating, yet even those with excellent ratings will still see an increase and will see a reduction in benefits offered, not to mention as we have been seeing, credit will tighten up as there is no benefit to the risk when you can not penalize someone who violates the agreement.

In the end, this is a lose for the responsible people and yet again another regulation put in place with little thought, but lots of "good intentions".

I see nothing good in this, I only see misery being inflicted on honest people who do not deserve it while the dishonest yet again get a free pass. I see responsible companies doing what they must to balance out the losses they will take and I see irresponsible companies using this situation as a means to make quick fast cash and we all have our wonderful representatives to think for their interference. /shrug
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Old 11-19-2009, 01:27 PM
 
39,020 posts, read 23,141,190 times
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Quote:
Originally Posted by blackandproud View Post
Everything you say is legit DC. The reason I have taken the approach is several reasons.

- It has taken me 10 years after my divorce to clean up my credit. You see my ex-husband as well as I were very iresponsible.

- I had tones of credit cards with low credit limits originally, so as the companies began raising my limits, i still stuck with the model of only spending within my means. Being a single mom of 3 with the father still the irresponsible parent, i had no choice. I had to stay in that mindset, god forbid I loose my job or I get hurt, who's going to pay the bills?

- My mortgage broker stated thing concerning cancelling the cards I had and the impact to my credit score. But once these banks began increasing my interest rate and droping my credit limit, my score was impacted anyway, so I paid the cards off first then cancelled them. Score still remained the same. I will be closing on my first home tomorrow (proud of myself)

You can't let these banks and creditors scare you inot continuously using their cards and staying hostage to their increased fee's. I still have one major credit card that I maintain the balances, along with tones of student loans Thanks to the two kids in college.
You should be proud of yourself. Congratulations on your first home.
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Old 11-19-2009, 01:31 PM
 
2,958 posts, read 2,079,761 times
Reputation: 584
Quote:
Originally Posted by organick View Post
you do realize that its not that simple for some people? right?
LOL...you think they care?

In the last eight years the wealthiest 1% of taxpayers have doubled their wealth while ordinary working folks have gone without an effective increase and when mortgage foreclosures, bankruptcies etc. enter the picture the average lifestyle has been hit harder than at any time since the Hoover days.

In 1950 a corporate executive earned about ten times what an assembly line worker or carpenter earned and now a CEO, CFO etc. earn about 350 times what an assembly line worker or carpenter earns. It's a wonderful country the Republicans own.
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Old 11-19-2009, 01:39 PM
 
13,072 posts, read 11,071,539 times
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Quote:
Originally Posted by organick View Post
Wait irresponsibility???? who gave a 10k limit to someone making 10k a year who already had 3 other cards? The banks did, they are just as guilty but they get in trouble and have no penalties.
There are many out there who do make low wages and have multiple credit cards and they do pay their bills on time. So it seems that the big problem is on the side of the card holder. You weren't trying to excuse them were you?
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Old 11-19-2009, 01:46 PM
 
13,072 posts, read 11,071,539 times
Reputation: 2606
Quote:
Originally Posted by organick View Post
were do you get that deliquent payers have no penalties from
Penalties in terms of raised interest to recover delayed and late payments. You do realize it costs a lot of money to deal with a severely delinquent payer? They have entire departments whose primary job is to recovery of payment. Increased interest is one way to obtain a return on that expense. What does the legislation say about fees and penalties concerning this? Have you read it?
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Old 11-19-2009, 01:57 PM
 
39,020 posts, read 23,141,190 times
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Quote:
Originally Posted by Nomander View Post
Penalties in terms of raised interest to recover delayed and late payments. You do realize it costs a lot of money to deal with a severely delinquent payer? They have entire departments whose primary job is to recovery of payment. Increased interest is one way to obtain a return on that expense. What does the legislation say about fees and penalties concerning this? Have you read it?
It caps fees and penalties.

But look at it this way. Your buddy Jack's water heater bursts, and Jack asks you to loan him $100, just until his commission check comes in. You lend it to him, but when his commission check arrives, it's short. Jack says, I thought I could cover it, but I can't. But I'll pay you back $40 this week, and $40 next week and $20 the week after. Do you then say, okay, I'll take your $40, but I'll only credit you $20, and so on, so that you'll still owe me $50 after you've paid the $100 back. Or do you say, look, I need the money, too, I'll tell you what, $40 now,$40 next week and $25 the week after and we'll call it done.

Because on the one hand you're taking advantage of a person, and on the other hand you're extending credit to a person.

And credit card companies don't like people who pay in full each month. They offer them deals because it's a marketing ploy to get them to spend and not pay in full each month. Credit card companies really love the ones who spend and then pay only the minimum each month, because it's those consumers who will maximize the credit card's profits.
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Old 11-19-2009, 02:01 PM
 
23,851 posts, read 19,144,158 times
Reputation: 9377
Quote:
Originally Posted by JustCallMeTC View Post
LOLOLOL It will be fun to hear the RTW Apologists' twirl on this one.
If Senator Dodd wasn't smart enough to figure out that credit card companies would jack up rates prior to the enactment of his legislation, then he doesn't deserve to serve the people. How stupid can one get? Republican's don't deserve an ounce of blame for this. Period.

Every thinking person on this earth saw the rate increases coming. In fact, it was plastered everywhere by the opposition to this bill.

No spin needed. Democrats f**ked up royally on this one. That's where the blame is.
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Old 11-19-2009, 02:04 PM
 
39,020 posts, read 23,141,190 times
Reputation: 12146
Quote:
Originally Posted by AeroGuyDC View Post
If Senator Dodd wasn't smart enough to figure out that credit card companies would jack up rates prior to the enactment of his legislation, then he doesn't deserve to serve the people. How stupid can one get? Republican's don't deserve an ounce of blame for this. Period.

Every thinking person on this earth saw the rate increases coming. In fact, it was plastered everywhere by the opposition to this bill.

No spin needed. Democrats f**ked up royally on this one. That's where the blame is.
I would think that it was anticipation of the credit card companies jacking up the rates that caused the Senate to entertain the idea of freezing rates immediately. So if the Republicans vote not to freeze rates, aren't they actually giving permission to credit card companies to jack up the rates?
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