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 ...
My only regret in running up a credit card balance was that the money wasn't spent on toys! Your advice is good, but realistically it is not possible if you have a real emergency situation that requires money to be spent immediately.
Of course though, I won't buy any toys until the balance is paid off.
Not if the contract is entered voluntarily.
“an idea world it would be 6 months bills”
I was taught that that was the absolute minimum and ever since i’ve had a bank account when I was 8 i’ve maintained much more than that. I always keep at least 2 months in my checking account.
If you use a credit card because you can’t afford it, how can you afford it with 20% interest on top?
Know the site well.
Sounds as if you meet my only criteria for running up your credit card balance. You can afford it. That concept seems to be beyond some here.
Wouldn’t you be more comfortable living under sharia? Check out Saudi Arabia.
Suckers. We paid our 2nd mortgage card off. No car payments, no nuthin.
Can’t wait until I can say the same. Great for you.
You can’t voluntarily put yourself in slavery? I think not.
If you owe something you are a slave until the debt is paid be that credit or anything else.
Proverbs 13:12 says “Hope deferred makes the heart sick, but when the desire comes it is a tree of life.” In other words, when you can see something at the end of the tunnel that’s not an oncoming train – something that’s real light and real hope – you get excited. Think about it. There’s not one place in scripture where God uses debt to bless his people. In fact, the Bible calls debt a curse.
The consumer deserves much of the blame but an equal measure of blame should fall on the credit card companies themselves. I don’t think a day goes by that I don’t get one or two mailings saying I’m pre-approved for this card or that card. I’ve got a maybe half a dozen credit cards, only one of which I carry a balance on, and I added the spending limits up the other day. If I wanted to max them all out I could ring up well in excess of $120,000. That’s insane.
retroactively applying rate increases is wrong.
Other than that, I have no sympathy for people who take out the card, swipe it, sign the slip when they can’t bloody well afford it!
My Grandfather once said, “Debt is the ugliest 4 letter word.”
Oh really, Paul. If you can’t afford it don’t buy it. Brilliant.
There are many valid reasons (medical expenses, auto repair, unforseen emergencies) that people have to put on credit cards.
Save your sanctimonious crap dude. Credit card companies suck. The average credit card holder does not.
I’m debt free as well Appy it took the Mrs. and I 24 months but we did it I am not any mans slave anymore!!
Do you live in some backwards country that doesn't have bankruptcy laws?
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