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 ...
It wouldn’t be hard for you to justify getting money by any means for self defined “valid reasons.” Stealing from credit card companies, even though they “suck” is still stealing. Who will you steal from next? If you take money that you can’t afford to pay back isn’t it stealing?
“What if I need to borrow money to buy or fix a car to get to a job?”
Many of us have been there at one time or another in our lives. Here’s a serious answer:
Before you get a credit card, read all of the fine print. Don’t accept credit from a company that is going to raise the rates or levy huge penalties for late payments.
Once you have done that, figure out how much you are going to have to borrow on the card and if you are going to be able to pay it back. If the answer is no, try one or more of these:
1. Find another way to get to work.
2. Get help from family or friends, telling them the truth about the likelihood that they will get paid back in a timely fashion.
3. Find a different job, closer to home.
Then: Sit down and track every dollar you spend. Cable tv? Fast food? Ipod? Computer? Entertainment? Concerts? Magazines? Newspapers? Dump everything you don’t absolutely need for survival until you are living within your means.
Finally, once you are living within your means, get out there and increase your means! It’s a long process with ups and downs.
In any case, borrowing money when you won’t be able to pay it back will only make things worse.
Muslims are really big on the Old Testament. I think you’d like it.
So are Jews, a raced with a very laudable history of financial and academic success.
They've had a lot of financial success because they are famous for lending money.
Until you have been mugged. Then you will be glad you carry plastic and no more than forty bucks in cash in your wallet.
Bankruptcy is listed in the top five life-altering negative events that we can go through. Chapter 7 bankruptcy, which is total bankruptcy, stays on your credit report for 10 years. Chapter 13 bankruptcy, more like a payment plan, stays on your credit report for seven years.
Bankruptcy, however, is for life. Loan applications and many job applications ask if you have ever filed for bankruptcy. Ever. A common misconception is that you can use credit repair services to fix the damage from filing bankruptcy. If you lie to get a loan because your bankruptcy is very old, technically you have committed criminal fraud.
Debt is a trap that so many including myself have fallen into I learned I cannot be who God wants me to be while I was in debt.
Freedom is greater than I ever knew it could be!!
Yeah, and learn to live a mediocre life with no investments... no thank you.
I to fell into the trap, but am well on my way of clawing myself out.
If you can borrow money at 5% and earn 10% on it on Wall Street, you aren't a slave. You're just smart.
Me too. I tried my best to explain to the then wife YOU DON’T BUY MONEY.
Most people are in debt after a divorce. I paid off my house in two years afterwards with no other debts.
I have a house in my name, two elderly vehicles that run to my satisfaction, a stationwagon and van. I was thinking of buying a kayak for my river trips but since the service provides the transportation, I figured I would just go ahead and pay the little extra money to rent the kayak. They can handle transporting to the river and it’s possible damage. I have my son’s old mountain bike. He wanted to replace it but I don’t see the need. It’s not like bikes don’t get scarred up anyway if they’re used to their full extent.
The ex-wife? Broke and living in an apartment on a nurse’s salary.
Until the market goes down, there are no sure winners or losers.
If you consider your credit card debt an investment how are you going to cash in?
If you “have to” use plastic, I suggest a debit card. I use them for travel and the occasional convenience of ordering something over the Internet or phone. Other than that, I use cash.
You seem to know a lot of people who support your narrow view of the world.
Donald Trump declared bankruptcy and he’s doing alright. Many corporations declare bankruptcy, and afterwards do very well. It’s not an ideal solution, but it works for many people.
Your income is your greatest wealth-building tool, not debt.
The debit card stays in the vault. It’s not taken out except for buying things on the internet that are impossible to buy locally. Most purchases like that are done through the mail with a money order.
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