Posted on 11/04/2009 6:19:38 PM PST by underthestreetlite
U.S. stocks erased most of a 156- point rally in the Dow Jones Industrial Average after a House bill to curb credit-card rates spurred concern about bank earnings, outweighing the Federal Reserve's plan to keep interest rates at a record low.
Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. led financial shares to the steepest loss among 10 industries as the vote moved up the start date of many rule changes that will make it more difficult for lenders to raise rates on existing credit cards. The Standard & Poor's 500 Index wiped out most of a 1.5 percent rally triggered when the Fed said it will leave interest rates at "exceptionally low" levels.
(Excerpt) Read more at insightnews.newsvine.com ...
How in the world does anyone expect to keep interest rates near zero and inflation near zero with something like $50 trillion in total debt?
The credit card industry is the most abusive industry out there. They are loan sharks using bait and switch tactcs. Street hookers and drug pushers have more honor than credit card companies. They get no sympathy from me.
/Just saying how I really feel.
“outweighing the Federal Reserve”
Sounds like a pack of loan sharks trying to protect their turf. Rab isn’t buying,,, (on credit).
“Credit card rates should be X percentage above prime, “
Says who? And why?
How should the lenders allocate their risks and costs to extend the credit card line of credit?
Should a borrower with a 680 credit score pay the same rate as a 830 credit score borrower?
“The credit card industry is the most abusive industry out there.”
Maybe so, but extending credit to people is a very risk business to be in.
I do think some of the card companies do things in a way to confuse the customer and make extra fee income.
But they need to make a lot of money to cover the losses of those who don’t pay their bills.
If they can’t make money; the credit won’t be there.
If a bank extends the credit line of a 680 are lower card, he deserves to lose.
Game, set, match.
the market is ripe for a credit card that charges a fair rate. It would be very popular. What do you wanna bet that the reason a more reasonable competitor isn’t out there... has something to do with government regulation.
I actually buy everything on my Mastercard... gas, groceries, clothes, everything... but I sign online every week and pay the balance in full. I never pay any interest. But I do rack up those points and rebates. It works fine for me, and I don’t actually care what the interest rate is.
I ran into a young man, 20, a few years ago and ask him why he was working where he was. He said that he was in school and got drunk a few times and went on vacation with a nice piece and put it on his CC, a year are so down the road he had 12,000 in credit card bills and had to leave school to make money to pay his bills. This was a young man that should have known better, but the damn banker that was extending the credit should have know better first.
Glad to see some sense on this subject. Way too many here on FR defend the vampire credit card companies and their tactics.
Its still a little early yet, but futures showing more red than usual.
http://www.bloomberg.com/markets/stocks/futures.html
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