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 ...
A chapter 13 restructures debt. A chapter 7 wipes it out. That’s unsecured debt like credit cards and medical bills. Secured debt like a mortgage still has to be paid back.
Just in case anybody wants to know, most doctors will cut the fee and accept $10 a month.
I'm sure they are trying to lure people who cannot repay, or keep up with monthly payments into making a poor choice. My situation is quite different. I feel like I'm cheating them at their game.
I understand the difference. My point was that few people qualify for an outright Chapter 7 discharge of debt anymore. The bankruptcy reform legislation forces most people to pay back at least some of their debt, including unsecured debt.
IMO that's a fool's game.
That would eb classified as a "rainy day," the kind of time we used to be taught to save for.
Of course, now we are taught to "have it all," NOW, so the concept of "saving" is hopelessly quaint and old-fashioned.
It is if you are not in the position to cover the loan 10x over. I agree. My situation was different from most.
"Credit" cards are wonderful tools when used as "charge" cards. They're far better than cash, as you point out. Many even pay you for using them.
Gotcha. I was imagining the late 90s, when people were getting cash advances on their cards and taking out home equity loans to invest (because they had no other source of cash).
I certainly understand that people create many of their own problems with credit cards. However, when CC companies are loaning money to people without jobs, and people whom they know are a poor risk, they ought to bear the brunt of that bad business decision.
With my wife still working we could go 4 to 5 months, and in the mean time I would sudstitute teach and look hard for work.
I’ve done similar things, though not quite the doubling in stocks! Way to go. There are some risky buys out there right now, but the upside potential is also enormous. Good luck to you!
Without the credit card companies, where are you going to get the money for your "many valid reasons"?
Perhaps they should just give money away, so long as there are "many valid reasons.
And this is supposed to be a conservative site?
Never said there was.
OK, well it makes sense put that way.
Depends on the situation. I know that if you were applying for a mortgage and we needed rental verification, it would be tough to use reciepts. The reason being, anyone can fake a reciept, it's a lot harder to fake a cancelled check. Of course, you sound like someone with more than sufficient credit to not even need any conclusive proof of rent, but that's another story.
I’d only do that if I had more than enough cash to cover that and then some.
The receipt provides the number of the missing money order. If it doesn’t show up to the seller, the product doesn’t get shipped, I check with the bank to see if it was returned and I’m issued another since it was lost. I don’t know how much easier that is.
I can’t see the advantage of someone trying to steal a filled in money order especially after I scripple all the information needed for the transaction.
These stocks get knocked around a lot with the price of oil. I play a portion of my positions around the movements in the price of oil. If oil price goes to < $70, I'll pick up some more RIG, DO, MRO, MDR, OXY, CVX, FTO, HAL, NE, NOV, TSO, VLO, WNR, etc. Gets back up to $80 or so, I'll take some profits. That strategy has worked pretty good over the years. I might buy or sell too early in the cycle, but the oil price excursions have been trending very much up. I invite my FRiends to join the party! The mutual specialty energy funds have done very well for 4 years now too.
I only once went over 20% margin, with cash buyouts in the portfolio, usually stay less than 5%.
The $50K 0% CC offer was simply an offer I could not refuse. It replaced some of my 8.5% margin debt at the time. I put the minimum monthly payment on autopay with the CC company to eliminate the chance of going to the default usury rate. It worked out fine.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.