and no more credit cards for dogs either
I had no idea a credit card company, also known as banks, forced people to shop shop shop till they drop.
This seems counterproductive to me. Someone having issues with paying their credit card payment on time, gets slapped with higher interest rates. Or if they are late on only one payment.
Aren't they shooting themselves in the foot by making it harder for people to pay off their balances?
That said, I pay all of my bills on time. Thankfully!
I just called Wells Fargo today and got my rate lowered and they informed my that my limit has been increased by another 2K. Of course it help that I pay on time and in full every month. I think that if a person is a responsible borrower they should be able to weather this storm just fine.
Sounds like John Q. Public needs to do some “plastic surgery” (cut up his credit cards) and pay off his balance. Then the creditors won’t have to worry about doing business with him!
“Behind the changes is the simple fact that lenders want to protect themselves from BAD debt...”
Sounds reasonable to me. Good for them!
There is still a good possibility that credit card companies may be forced to cancel cards for a broad range of holders. If things get very bad, then they may have to suspend all credit cards.
In either case, since very large numbers of people are dependent on their month-to-month credit balance, living “behind” by a month, this might cause another phenomenon—the death of the bank check.
Though it is not a credit instrument, a massive surge in check overdrafts to pay monthly expenses, because of credit card cancellations, could force banks to discontinue checking nationwide. Conversely, retailers could cause the same result by just refusing to honor bank checks.
Nationwide, this would force most retail business to be done with debit cards or, to a much lesser extent, cash. And there is no choice in this, because only about 5% of our retail economy is backed by paper currency. Most banks only have perhaps $30-50,000 cash at any given time.
Ironically, because many transactions cannot be done with debit cards, this could cause massive deflation of paper currency alone. That is, debit transactions for $1 would cost $1, but perhaps only 10 cents, if paid for in cash.
And how many people do you think have more than $200 in cash at home?
For this reason, purely on painless speculation, it would probably be a very good idea to keep a few thousand dollars cash in a safe place in your home.
Ten years later, I am still debt free and own two homes. I've been to Thailand, Bora Bora and Europe in the last five years.
So let’s recap just what CBS is whining about:
- Even though I (and anyone else who manages to actually pay his debts) am getting credit card offers by the boatload, the lowest-common-denominator “pre-approved” offers are finally decreasing in quantity, so somewhere someone who doesn’t pay his debts might not keep receiving ready-to-go cards in the mail, so when he maxes his latest one he’ll actually have to put forth the effort to get another one to shift his balance to.
- In a tight credit market, doing things like not paying your bills, carrying large balances, constantly overdrawing your account, and other actions that say “I’m very likely to default on the money you lent me!” may actually make lenders want to lend you less. The audacity!
- Whereas in the past if you called and complained to customer service enough, they’d cave in and drop the charges every time you exceeded your limits or skipped a payment, now lenders are *actually* making the penalties stick when you repeatedly skip out on payments.
As someone recently out of college with a very modest income who makes it a point to buy what he can afford and pay off his balance every month, I’m feel so badly that life is getting ever-so-slightly more difficult for the bums who decide to upgrade their cell phones instead of paying the minimum on their outrageous shopping debt. When O’Teleprompter jacks taxes up even higher, maybe “community” organizers can use the extra money taken from me to help bail out my peers who enjoy throwing away triple the money I do to keep up the same lifestyle they had when Daddy was paying the bills...
I don’t carry credit card debt, or car notes either. Except for a very modest mortgage, I owe nothing.
But this move by the banks is going to have temporary adverse affects on the economy.
The economy is largely based on consumer spending as well as the jobs of millions. In addition, this can cause deflationary pressure as credit is a big part of the money supply.
Looks like my plan to never, ever allow the credit card companies to collect a single penny of interest from me is paying off.
I sure don’t see any evidence of it.
I just got my new MC renewal card feom BofA with the same $30k limit and their standard BS to transfer accounts for 0% interest.
why should CC companies have to cater to the lowest common denominator....
Debt Free Woot
Credit card companies are raising their rates. They re-disclose (no body reads the fine print) and I have seen some like this:
28.5% APR on the AVERAGE balance outstanding.Also the monthly payment has been lowered so that if you run the amortization, (monthly payments to maturity) some cards will take close to 20 years to pay out.
Debtslavers? You bet!