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Secret History of the Credit Card
Frontline PBS ^ | Nov. 23, 2004 | Elizabeth Warren - interview

Posted on 04/17/2005 6:59:02 PM PDT by A. Pole

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1 posted on 04/17/2005 6:59:05 PM PDT by A. Pole
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To: Willie Green; Wolfie; ex-snook; Jhoffa_; FITZ; arete; FreedomPoster; Red Jones; Pyro7480; ...
Hey, there's no doubt about it: It's possible to write stupid usury laws so that in an inflationary period, you've got a usury law that's too low. But we're not talking about whether or not stupid regulation is a bad idea. If interest rate caps move with the inflation rate, then there's plenty of room for credit card companies to make good profits -- lending at lower prices to people who are prime credit risks, and lending at somewhat higher prices to people who have besmirched credit.

The problem here is that the profits are so extraordinary for lending at three times and four times ... the interest rate and the original cost of money, and because those profits are so extraordinary, the companies are all moving into subprime. They're out there competing for customers who are already in financial trouble; only the way they're competing is competing to get them in, and then hit them with 29, 35, 40 percent interest rates; $29 fees, $49 fees, $79 fees. ... Those people are like machines that just keep turning out money for the credit cards. Once they're trapped, they can't get out of it.

Long text but worth the time!

2 posted on 04/17/2005 7:00:57 PM PDT by A. Pole (George Orwell: "In times of universal deceit, telling the truth will be a revolutionary act.")
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To: A. Pole

Bump for later read!


3 posted on 04/17/2005 7:01:44 PM PDT by nmh (Intelligent people recognize Intelligent Design (God).)
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To: A. Pole

"We're a nation of debtors. Why do you think people left Europe to come to the United States? They left because they were in debt. We like to describe it as, "Oh, it was about religious freedom." No, it was about debt. They were looking for a way to escape their debts."

Only Frontline/PBS would be stupid enough to ignore vast amounts of historical eidence to make such a ridiculous statement.


4 posted on 04/17/2005 7:03:17 PM PDT by webstersII
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To: A. Pole
Let me guess, it's Bush's fault that people overuse a credit card, right?
5 posted on 04/17/2005 7:04:30 PM PDT by Perdogg (Rumsfeld for President - 2008)
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To: A. Pole

"Absolutely. The consumer credit has been available in the United States for decades in many ways, for centuries, while we had usury laws. Sears, Roebuck was famous in the early 20th century for selling to people on credit to be able to boost its sales."

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

There's a sucker born every minute----that's my theory on credit cards.

I've been using chsrge cards,now called credit cards,for 50 years and have never got in trouble.




6 posted on 04/17/2005 7:08:18 PM PDT by Mears ("The Killer Queen,caviar and cigarettes")
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To: A. Pole
This is the pot, the water is near-boil, we are the frogs who swam and were happy.

What do the bankers and Senators think? They have a short horizon -- it is very gilded for them, but they have caged themselves more strongly imprisoned than we are.

Never boiled but nearso will we frogs be, yet a plague to those who in folly would snare the weak and injured.

7 posted on 04/17/2005 7:09:09 PM PDT by bvw
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To: A. Pole
Bump
To read later
8 posted on 04/17/2005 7:16:17 PM PDT by Fiddlstix (This Tagline for sale. (Presented by TagLines R US))
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To: webstersII
Morris, Hamilton, Jefferson, Daniel Boone? All major debtors.

Franklin worked as a indentured apprentice in Boston and fled to Philadephia before his contracts term ran out, iirc.

The British imposed the stamp and tea taxes on the colonies to pay off debt incurred in the French and Indian War. Our birth was in rebellion to onerous debt.

The historian's premise that we are at core a nation of debtors has good foundation.

9 posted on 04/17/2005 7:16:57 PM PDT by bvw
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To: webstersII

My thoughts exactly. Only Georgia was originally billed as a debtors' colony; Massachusetts, Pennsylvania, Rhode Island and Maryland were all religious enclaves.


10 posted on 04/17/2005 7:18:18 PM PDT by The Grammarian ("Preaching is in the shadows. The world does not believe in it." --W.E. Sangster)
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To: A. Pole

man, don't tell this guy about payday loan places....


11 posted on 04/17/2005 7:19:07 PM PDT by stylin19a (Always remember - don't ever forget - "2 wrongs don't make a right, it's 3 lefts that make a right.")
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To: A. Pole

PBS Frontline. Yeah, there's an unbiased source.


12 posted on 04/17/2005 7:22:10 PM PDT by ozzymandus
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To: bvw

My brother had a heart attack last year just before his company went under. Lost his job, insurance, almost everything but his house - and that only because he filed bankruptcy.

I think there ought to be an exception for catastrophic medical expenses.


13 posted on 04/17/2005 7:24:05 PM PDT by stinkerpot65
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To: A. Pole

Frontline plus Elizabeth Warren. Nice combination if you're the DNC. Warren worked for Kerry during the campaign. Bunch of Leftists. Pay it no mind


14 posted on 04/17/2005 7:27:42 PM PDT by davidtalker (David Gold - goldtalk.com)
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To: A. Pole

Bump for when I've got an extra 3 hours to read.


15 posted on 04/17/2005 7:29:08 PM PDT by yooling (Screw diversity! Celebrate excellence!)
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To: davidtalker
Frontline plus Elizabeth Warren. Nice combination if you're the DNC. Warren worked for Kerry during the campaign. Bunch of Leftists. Pay it no mind

It does not matter if a person is left wing or right wing. What matters is what is said is true.

16 posted on 04/17/2005 7:29:39 PM PDT by A. Pole (George Orwell: "In times of universal deceit, telling the truth will be a revolutionary act.")
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To: ozzymandus

According to this article, it's only innovative entrepreneurs that declare bankruptcy....no wait....hardworking middle-class....no wait.....unemployed, sick people with marriage difficulties......no.....sorry...etc. etc. Make up your mind already!

Chap 13 is no profit center for credit card companies, which is where most of these folks will now go....it stinks for both the lender and borrower.


17 posted on 04/17/2005 7:29:41 PM PDT by RFEngineer
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To: A. Pole

29, and I've still never owned a credit card. I get NO junk mail and I pay everything with checks.


18 posted on 04/17/2005 7:32:51 PM PDT by struggle ((The struggle continues))
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To: A. Pole

25 or 40% APR? Needy committee member in my church came across a couple with two children, driving a junker they bought on credit with a triple digit APR. They had been paying on it almost two years, and balance had hardly dropped at all. Helped them out (replaced loan with a 0 pct loan). They paid all but last two payments. Recently died in a murder suicide incident. Debt burden was the least of their problems, but probably symptom of many others.

Credit card rates for subprime borrowers are substantial, but so are write-offs, and in general recessions, the writeoffs wipe out years of interest earned. People who use these cards (without end-of-month payoff) have unduly short time horizons. Make credit cards go "poof", they will STILL have unduly short time horizons. Pundits can call them "middle class" all they like, but in fact, individuals like this are on the road to indentured servitude. Recalls an article (in Harpers) a few years ago with a title something like "How I'm going broke on $100K per year". An expensive indentured servant. A university administrator wrote the article, if I recall correctly.

Prov 22:7
The rich rules over the poor,
And the borrower is servant to the lender.


Get a snowballing number of such cases, as the interviewee predicts, and eventually:

Isaiah 24
1 Behold, the LORD makes the earth empty and makes it waste, Distorts its surface
And scatters abroad its inhabitants.

2 And it shall be:
As with the people, so with the priest;
As with the servant, so with his master;
As with the maid, so with her mistress;
As with the buyer, so with the seller;
As with the lender, so with the borrower;
As with the creditor, so with the debtor.
3 The land shall be entirely emptied and utterly plundered,
For the LORD has spoken this word.


19 posted on 04/17/2005 7:36:15 PM PDT by Blue_Ridge_Mtn_Geek
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To: webstersII

But that's the only part of the interview that I disagreed with.


20 posted on 04/17/2005 7:46:52 PM PDT by TheBattman (Islam (and liberals) and gasoline producers and sellers- the cult of Satan)
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