[library user]

Even if my purchase agreement with GM doesn’t say “this car will not explode in a ball of flame if you tap the accelerator twice and then hit the brakes,” they are subject to legal action if this occurs.

LOL.

[the invisib1e hand]

One model is that the credit card companies are lying to you – they think of you less as an individual to have a dynamic risk factor dynamically assigned to you, and instead as part of a portfolio to have a specific rate of return extracted from. So they have statisticians and psychologists not to create a credit risk, but instead to figure out who is likely to pay what when, and use that to keep their returns very high. Quants to study how much they can squeeze from someone – not too much, but not too little. So it is less about the awesome part of markets, the price information and the convergence and feedback, and something more feudal.

This is extremely well put.

[Unlikely Hero]

The problem with this article is that the credit card companies raise rates not just for penalties, but also unilaterally. That is, for the “economic conditions.” Thus many are punished even if they did not violate the terms of the original contract. The credit card companies simply amend them at will.

They aren’t inherently evil, but bad things can happen when you rely on them too much. And the credit card companies are shooting themselves in the foot right now. They are going to have a great many more defaults as a result of the interest surges, and good luck to them collecting all of that.

[Virginia Ridgerunner]

Credit Card companies are thieving scum which thrive on fraud and collusion.

[Obadiah]

It is an unfortunate reality that there are many people who are not equipped to get along in a capitalist system. They lack some combination of (rarely) the basic intelligence and (much more frequently) the emotional maturity and self-discipline required to make their way in a world in which others are not looking out for them. Much of the rationale for traditional notions of child-raising, education, and social organization is to prepare people to live in such a world. That is, to produce actual adults. To the extent that we can count on people to act responsibly, we can have a less regulated economy that will tend to produce greater freedom and growth. But the problem of how to deal with the semi-incompetent is a real problem that will never go away entirely.

And there you have it. In one nice and tidy paragraph we see the reason liberals exist.

[sickoflibs]

Good article but in a world of bailouts the government has a obligation to reduce risk to taxpayers which means limiting credit. 25 years ago there was no easy credit. My grandmother owned a house and had savings but could only get a store credit card because she didnt have a job.

Saturday on FNC someone from FNBusiness was on and was asked if those like me that “pay their entire balance every month” will be hit with new fees to pay for those that carry balances. She said exactly what I said, “those that pay off balances have all the power. We dont need them, they need us.” Those that carry balances are at the CC’s companies mercy, they need the CC credit.

[sfvgto]

the credit biz is in a state of mass confusion. B of A just raised my rates and Wells Fargo just lowered them and doubled my credit line

[CSM]

Worshipping the great FICO ping.

Dave Ramsey Fan Ping List.

If you would like to be added to the “Live like no one else, so that you can LIVE like no one else” list, feel free to Freepmail me.

[dalereed]

“Credit cardholder agreements are written in language that is above the level at which about 50 percent of U.S. adults read”

People that stupid should obtain help exp[laining the terms before sifning the agreement.

Anyone that signs a contract that they haven’t read or understand deserves to be taken for everything that they have!!!!!!

[CottonBall]

It is an unfortunate reality that there are many people who are not equipped to get along in a capitalist system. They lack some combination of (rarely) the basic intelligence and (much more frequently) the emotional maturity and self-discipline required to make their way in a world in which others are not looking out for them.

That's exactly it. That's the same mentality that makes people say they're not responsible for buying a house that could never afford.

As education gets dumbed down more with each passing year, we get more people incapable of acting like adults.

[JWinNC]

"His conclusion is that credit-card companies are, morally speaking, “scumbags.” "

Yep.

While I firmly agree that people are responsible for themselves and their own debts, these companies are the modern equivalent of the "Company Store" system that kept people in debt bondage.

They encourage debt. They encourage paying forever and never retiring the debt while at the same time changing the rules and rates to make it harder to pay off the debt.

jw

[DoughtyOne]

The idea the credit card companies have to raise rates from 7% to 30% overnight, just because a person is a day or two late with their payment, is ludicrous.

Take a look at your bills folks. If you’re one hour late paying your bill, you will be charged a “late”, “penalty”, or some other version of a fee, related to your tardy status. Generally that’s a $25 to $35 dollar fee.

The credit card company doesn’t have to hire more staff to have this facilitated. It’s computers do the task for it.

If you’re paying 7% interest and you’re a day or two late, the $35 fee more than makes up for any loss. One could say yes, but that’s just for one account. They loose gazillions if everyone is late. Yes, and they gain gazillions by charging everyone $35 because they are late.

If you pay your card late, you also pay interest on a higher amount that you would have. And so the repayment schedule is pushed on out one month, and the credit card company makes more money as a result. If this happens across the board, another words if say 100,000 accounts go 24 hours, the credit card company stands to make a significant increased profit due to this small individual increase in interest rate paid.

These credit care companies plead that their business model is destroyed if people pay even one hour late. Like hell it is. That’s not true.

The public is getting jobbed by these exhorbitant interest rates folks.

You can make all your payments on time all year, and be paying off less than 20% of the sum total of the money you sent in.

I figured it out recently. It could take you 30 years to pay off a loan making your minimum payment, if the interest rate is 30%. That is flat out abusive, and should be a criminal act.

There’s no call for that under any circumstances.

[Dick Bachert]

TO: XXXX

Subject: Interest rate increase on account number XXXX

To whom it may concern,

We have been XXXX card customers for many, many years. Our records here indicate that we have never missed a payment date. Over the years, we have had several accounts there, several of which we paid off in full. In fact, we recently received a letter from you indicating that two of those inactive, zero balance accounts were unilaterally closed by you. Having heard that closing an inactive account can negatively impact a credit score, we resisted doing so. We shall retain a copy of your closure letter in the event that YOUR closing that account affects our credit status.

However, our primary reason for this letter is to protest your recent notification that our interest rate will increase from the old APR of 8.24% to – for XXXX anyway – a new, improved (and clearly USUROUS) rate of 19.24%. And the “Transaction Fee” thing is a nice touch. You’re not making enough with the new APR? I think we now know where Tony Soprano found employment since his “family” left the airwaves: He’s working there at XXXX!

Then there’s that 25 BILLION in TAXPAYER dough now almost certainly working its tail off for XXXX. We congratulate XXXX XXXXX for dodging most of the sub prime debacle and for wishing to return the 25 B to help Obama fund his utopian welfare state/worker’s paradise. Is that the “Why” of the higher interest rate? To replace the taxpayer dough the other banks may want to keep?

Unlike many of your other “customers,” we have an option not available to them. Despite the current market decline, we have sufficient reserves to PAY OFF this account in full and take our credit business – which this experience will cause us to drastically reduce – elsewhere.

Bottom line here?

We need to get the APR BACK to 8.24% or we send you a check and go away. I think even Tony understands that 8.24% of SOMETHING is more than 100% of NOTHING.

Then there’s some Old Testament Americans seem to have forgotten:

“The rich ruleth over the poor, and the borrower is servant to the lender.” Proverbs 22:7

I believe actions such as yours will trigger a mass exodus away from credit cards back to the pay as you go/cash system prevalent when I was growing up. And that will be a GOOD thing for us all. Most of us have too much totally unnecessary “stuff” anyway.

An editorial comment on the events that brought us all here:

Barney Frank, Chris Dodd and the other Capitol Hill Cretins who pressured FANNY and FREDDY into forcing banks to give home loans to folks with no prospect of making the payments in what can only be considered a stupid vote-buying scheme at best and utter insanity at worst should be drawn and quartered and their heads displayed on pikes on the Mall.

And I have no words to describe the too, too clever idiot “Masters of the Universe” who then bundled this JUNK into so-called Mortgage Backed Securities and “Derivatives” and the complete morons who bought that crap sans any due diligence. The only possible benefit from this – this MESS is that the phrase “The full faith and credit of the United States” is expunged from our language. According to Obama, “We’re out of ‘money’.” He SHOULD have said OUR GREAT- GRANDKIDS are out of ‘money’ and he could have added faith and credit as well.

At your earliest convenience, please consult with Tony when he returns from the Bing and respond via email so we can determine which way we need to go.

Thanks,

[wardaddy]

Credit inquiries will sure kill your credit.

I had 52 in the past 18 months...that hits me from 75 to 125 points depending on who’s talking.

[CodeToad]

If a person uses their credit rating by applying for credit, their credit score suffers.

If a person closes a credit account they are not using, their credit score suffers.

If a person doesn’t take out more credit their credit score suffers.

If a person doesn’t close a credit account they are not using, their credit score suffers.

If a person uses the credit they already suffered a hit to their credit rating, their credit score suffers.

Credit is a racket.

[MissDairyGoodnessVT]

call me crazy but it would never occur for this fraudulent occupation of the WH to question the practices of Experien,TransUnion and the other one(can’t remember the name) those are the BIG GUYS , the Credit Card Co’s answer to them , am I not right on this one?

[Just another Joe]

Even if my purchase agreement with GM doesn’t say “this car will not explode in a ball of flame if you tap the accelerator twice and then hit the brakes,” they are subject to legal action if this occurs.

And you are still just as dead.

If the credit card companies want my money they will treat me as an asset, as long as I pay on time and do not default, not as a "sucker".
I will drop a particular card like a hot potato if they mistreat me.
I've done it before.

There are other fish in the sea.