Posted on 08/11/2007 6:39:42 AM PDT by Hydroshock
WASHINGTON — A "dangerous cycle of debt" is trapping too many credit-card holders, making it increasingly difficult to protect their financial security, according to a report.
About one-third of cardholders pay interest rates in excess of 20 percent, according to a report from New York-based think tank Demos. Also, borrowers with one slip-up can incur a "cascade" of penalties and end up in a "trap" of high-cost debt, the report said.
"The excuse of risk-based pricing is used to justify everything. These prices go far beyond pricing for risk. Some of these interest rates and payment fees seem to not accurately reflect the risk," said Tamara Draut, a co-author of the report.
Draut criticized practices such as card issuers retroactively applying rate increases. The authors also noted that companies can change terms at will, and that there are no legal bounds to the amount of fees and interest that borrowers can be charged.
"As a result, cardholders often borrow money under one set of conditions and end up paying it back under a different set of conditions," according to the authors.
(Excerpt) Read more at foxnews.com ...
Matthew 7:13-14
The Narrow and Wide Gates
13"Enter through the narrow gate. For wide is the gate and broad is the road that leads to destruction, and many enter through it. 14But small is the gate and narrow the road that leads to life, and only a few find it.
Yes. You are an inspiration to us all.
Well, we’re a little old to not know our limitations, so I don’t think we’re playing with fire. We’ve been saving religiously for years, always have the money taken out before we even see it in the paycheck, and invest it. Add that to retirement accounts and I don’t think we’re going to get burned, because as I said, we don’t buy anything we don’t have the money in the bank to pay for. We’ve lived in the same house for 20 years and had a 15 year mortgage, so that’s done. We drive 10 year old cars that we bought when they were “almost new”...(we don’t believe in car payments)...but we’ll drive those cars till they wear out, then buy used cars again.
We’re not taking risks...and you shouldn’t make blanket statements that it is never right to use credit...that’s just not the case. It might be right for you and for many others, but it’s not fair to put your experience on others. It’s great to give advice, but you can’t assume that everybody will fall into the same trap you did.
It took me about 5 minutes. We just took money from savings and paid it off. It took a lot of splaining though. We were using a savings account for emergencies. That’s what the credit card is for.
God does not contradict Himself.
Electricity is the same way as your exterminator but I have the money to pay for those services If I have trip in my life.And that is money paid for services rendered.
Why would I want to put myself in the risk of owing to a cc company?
Don’t gloat. Convince her you are penniless and in debt up to your eyebrows. That way she won’t suddenly remember money you should have paid her.
Long term investments are your best bet.
Not microwave cooking but crock pot cooking.
As I’ve been saying all along...I have the money too to pay off the CC, and I do it at the end of each month so I don’t pay interest.
You missed the point of the article with your simplistic reply.
Makes sense to me. I’m using mine to rebuild my rating after taking several major bad hits in life. I buy things that I’d normally buy, then pay it off every month in full. That’s all the plastic gets used for, and that’s why I have it.
I am amazed at people who have money in the bank at 4% and debt at 15%. They never think to use the savings to pay the debt.
I wish I could have done it that way then I wouldn’t have all of these people telling me that credit cards are the only way to survive in the world.
Thanks I try!!
For some, personal responsibility is a foreign concept.
As I have said you can assume the risk if you want to.
I will not and will advise others not too as I get a chance.
A couple of these are on my agenda. Especially the reverse mortgage.
I am not happy with the present situation, but don’t plan to stay with it forever.
And again I will get accused of being sanctimonious
Had you followed your sage advice in 1928 you would have broken even again in 1954.
Risk is risk and has not been priced into our markets for a long long time.
I am personal friends with my bank manager. She told me that debit cards are much riskier than credit cards because someone using the card can clean out your account in minutes and you have no protection. Where with a credit card the most you can get stuck with is $50.
Either way, I use cash for darn near everything.
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