Posted on 01/03/2009 5:29:21 AM PST by TigerLikesRooster
January 3, 2009
Credit Card Companies Willing to Deal Over Debt
By ERIC DASH
Hard times are usually good times for debt collectors, who make their money morning and night with the incessant ring of a phone.
But in this recession, perhaps the deepest in decades, the unthinkable is happening: collectors, who usually do the squeezing, are getting squeezed a bit themselves.
After helping to foster the explosive growth of consumer debt in recent years, credit card companies are realizing that some hard-pressed Americans will not be able to pay their bills as the economy deteriorates.
So lenders and their collectors are rushing to round up what money they can before things get worse, even if that means forgiving part of some borrowers’ debts. Increasingly, they are stretching out payments and accepting dimes, if not pennies, on the dollar as payment in full.
“You can’t squeeze blood out of a turnip,” said Don Siler, the chief marketing officer at MRS Associates, a big collection company that works with seven of the 10 largest credit card companies. “The big settlements just aren’t there anymore.”
Lenders are not being charitable. They are simply trying to protect themselves.
(Excerpt) Read more at nytimes.com ...
Ping!
The lesson that we are learning is that you are a fool to pay your debts.
“The lesson that we are learning is that you are a fool to pay your debts.”
And once everyone learns and implements this lesson, we will become your average Asian economy, only minus the booming population to keep the economy flowing while there is a high default rate.
Ordinarily I would agree with you and by that standard I am a fool but honestly... Haven't we all just been forced to "pay our debts" with this huge bailout program Congress and the President conjured up? Are not we, the taxpayers, the debtees and the saviors? Does anyone really believe that the American taxpayer will ever see one dime of his/her portion of the bailout money returned to him or her?
Naaaaah... Those that do are the real fools if you ask me.
About five years ago my youngest son’s dingbat wife ran up horrendouse debts on a slew of the $500-limit cards. The kid was getting hammered with “over-limit”, late fees and all the rest. My boy said he’d have to get a second job.
We sat down at a table with the statements spread out before us and began calling the companies one-by-one. Figuring they were all sleazy squeeze-bloods, I was amazed at how they caved and would settle, in some cases, for half of what was owed.
When the smoke cleared, he was in the clear as well and didn’t have to take that second job. He now has one card and pays that off each month (usually). Lesson learned - the hard way.
Yep, it appears so. We use a CC for everything (we like those reward points) but we pay it off at the end of each month. The bill is usually large because we use it for everything from groceries to gas...guess I should quit paying it off each month and just let the charges mount up, then maybe I could get a bargain too!
Why not default on an upside down mortgage, have a family member make the bank an offer they will take, and have the bank fix your credit rating as part of the deal?
bump
Does not paying your debt in full damage your credit rating? It seems to me that cc companies might be forgiving with debt but then would hammer you with a low credit score.
As a collector I'm surprised at how many people ignore their debts for years figuring they will never have to pay.
Lately I've heard a number of borrowers tell me that Obama is going to erase their debts.
Not really. Responsible people are now paying the debt of irresponsible people in addition to their own debt (which they already paid in full). Irresponsible people get to avoid the consequences of their behavior.
Yeah, I was one of those responsible people....but hey, how do I get in on this now?
I will have to start calling the credit card companies...”I want a bailout....”
Seems like the world is turned upside down from when I was a kid.
It does. I'm a loan officer for a small credit union. While we have a lot of leeway to lend in spite of credit scores, it is part of our decision process. In other words, if the customer has been loyal and timely with us, we tend to give them a break, even if they are behind with other lenders.
But if they ever stiff us just once, we usually are through with them.
What in the world did you say to them? Best I could get out of my bank, for my one-and-only card with the not-too-horrible balance and extortionate interest rate, was a rate cut of ... 0.75%.
If there's a magic phrase, or I should just go to threatening to run over their cats, please share :)
Just as the IRS goes after the wage earners to enforce the terror so too do the 30% credit card banksters and their constant brainwashing of the proles.
When you begin to see how the system operates you're then able to play it.
The reason for the current economic implosion is not housing or Bush or Obama or auto makers etc.......ITS THE CREDIT BUBBLE pushed by the banksters.
Come the summer we'll be worrying about more than our credit scores.
The bankers wouldn't be able to push a credit bubble if people had alternative ways to maintain or increase their standard of living that a growing and innovative economy provides.
Regulators Adopt New Credit Card Rules
Thursday, December 18, 2008
Adam Samson, FOXBusiness
A sweeping reform of credit card rules aimed at helping consumers hit by confusing, and sometimes deceptive, practices by creditors is on the path to regulator approval.
The Office of Thrift Supervision and The Federal Reserve said Thursday they approved of the new rules.
"The revised rules represent the most comprehensive and sweeping reforms ever adopted by the Board for credit card accounts," said Federal Reserve Chairman Ben S. Bernanke. "These protections will allow consumers to access credit on terms that are fair and more easily understood."
Creditors will have to disclose interest rates when accounts are opened, and will be prohibited from hiking rates unless they are "expressly permitted," according to a release by The Office of Thrift Supervision. They will, however, be allowed to adjust rates after the account has been open with 45-day notice.
Industry participants say the new regulations could dramatically alter the credit card market.
The new regulations "are unprecedented in their scope and signal the beginning of a new market structure for credit cards," said American Banker Association President Edward Yingling.
Yinging, however, notes these changes can potentially increase borrowing costs for consumers, and even cut credit availability.
Creditors are also permitted to charge introductory rates that change after a certain period provided such stipulations are disclosed when the account is opened. Interest rates can also be increased on accounts that are over 30 days delinquent, the release said. These new disclosure rules will give consumers "the ability to easily compare the terms of different credit cards and make more informed decisions about their personal finances," according to Yingling.
The rules, which are expected to go into effect on July 1, 2010, will also require customers to receive a “reasonable amount of time to make their credit card payments,” The Office of Thrift Supervision said. Although exact figures aren't provided, The Office of Thrift Supervision says 21-days would be considered a reasonable amount of time. Excessive lump-sum-fees on high-risk clients will also be curbed.
Billing regulations, such as banning so-called double-cycle billing and increased requirements clients' payment allocation will also initiated. ...more
http://www.foxbusiness.com/story/markets/economy/regulators-adopt-new-credit-card-rules/
ping for reference!
Does not paying your debt in full damage your credit rating? It seems to me that cc companies might be forgiving with debt but then would hammer you with a low credit score.CC providers have a name for people who pay off balances: Deadbeats.
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