Posted on 04/24/2009 9:27:51 PM PDT by Tailgunner Joe
Next up for the federal government: the credit card industry. Having already thrown trillions in taxpayer dollars at the banking sector, and having moved to nationalize several of the nation’s largest banks by buying up preferred shares of stock, the Obama Administration now has the credit card sector in its sights.
In a closed-door meeting on April 23 with executives representing the credit card industry, President Barack Obama made it clear his administration intended to impose new requirements on the industry, eliminating allegedly deceptive fine-print clauses and other things that impede transparency. “I trust that those in the industry who want to act responsibly will engage with us in a constructive fashion, and that we're going to get this done in short order,” the president said after the meeting. Credit card officials had little to say publicly.
Issuers of credit cards have been blamed for raising interest rates whenever they wish, and for imposing confiscatory late fees. But credit cards are the riskiest form of debt. They offer unsecured lines of credit to people who are generally not known in person by the credit card issuer. They charge higher rates of interest to cover the much greater risks involved in providing credit of this sort.
Americans, who like to complain about rascally credit card companies, nevertheless revel in their availability. More than 80 percent of all American households have a credit card, and the average credit card debt per household was $10,769.00 at the end of 2008.
The proper way to deal with credit card issuers is to take the time and the responsibility to read the fine print, and to keep card balances low or, better yet, zero. But most Americans, addicted to easy credit and unwilling to take responsibility for their own financial choices, are probably content to let the Obama Administration protect them from themselves.
Until Americans become reacquainted with the wise principle of laissez-faire capitalism, caveat emptor, the Federal Government will be only too happy to continue enlarging its power under the pretext of doing for Americans what they should be willing and able to do for themselves.
I would like it to be harder to get a credit card. I think handing out credit cards to people who because they turned 18 is pumping the buck.
I waited 20 minutes to talk to a bank manager and she said we had done nothing wrong and that BOA had made a blanket decision that affected all customers based on the economy.
BOA also reduced our money market account interest rate from 2.1 to .93 with the account maintaining 10 times the minimum balance.
Bank of America also said we could not use the rest of our home equity line of credit. They also would not refinance our home even though THEIR appraisal was $60,000 over what we paid for the house.
Getting back to credit card companies. I would rather owe money to the mob, than them.
Here's hoping Hell is a low-tax, high-service state.
I wonder why nobody speaks of “preditory governments”? Seems they are just as greedy and power mad as the banks are. Ever dealt with the I.R.S.?
Vicki, I ran into some similar stories with my Citibank cards. The ones who are jacking up interest without cause are the major banks getting the TARP money, including Citibank and BOA. I went to another bank (Compass BBVA) that’s not in trouble and got a nice interest rate and a great deal on transferring balance away from Citibank.
Normally, the transfer balance stuff is a huge rip-off where banks give you a very low interest rate then later charge you at the “cash advance” rate with very stiff interest. What Compass did was charge me a fee for transferring the balance ($75), made it interest free for a year and *then* will charge me at the “purchases” rate, which is currently 6.9%.
The other option I took was to take a loan out against my 401k which is then deducted monthly from my paycheck. The interest rate from the loan is far better than the interest on the credit cards plus I am essentially borrowing against myself so I am paying the interest back into the 401k. This will limit the earning power of your 401k while the loan is outstanding but, in the long run, you are better off eliminating the debt than building up a retirement fund.
See, the problem isn’t *your* credit; the problem is the bank’s credit so they are basically using the high rates as a way to encourage you to pay them off and go away so they will look more solvent when they deal with the government.
So, my advice is to shop for a better bank than BOA. Stay away from the big boys and find a smaller bank that stayed clear of heavy mortgage investments and bailout money. They’re apt to give you a far better deal. And look into ways to pay down the debt quickly so you won’t be in such heavy risk by another economic downturn. Good luck.
If I can't withdraw it from my bank account, I don't buy it. unless it is a Car or House of that size.
Jeeesh, people. I don't make millions or even six figures but I manage my money just fine.
Where’ve you been? That’s exactly what they’ve done (check it out, most of the major banks are getting or asking for TARP money).
Exactly, go for cards from reputable places like your local credit union or similar, to replace the majors, keep it 2, maybe 3 with AMEX to keep your credit, and pay em off every month. Goes without saying if you’re in CC debt now, be on a path to pay it off as soon as possible. Raiding your 401k is usually never advisable, but it does beat being hopelessly in debt to these assclowns.
Time for my obligatory “I don’t have a credit card” and “I don’t have any personal debt” post.
Pay cash or do without. It’s worked for me for the last 23 years and I have no intention of ever changing.
My big metal box with a dial on the front is filled.
hmmm, what is the make/model/year of your metal box? BTW, where is its ‘exact’ location and you do work days or nights??? :) just for my own personal hobby records :)))) seeing who has what for safes...ahem lol
BOA did that to me, and when I called, they moved me to a companion card at the same fixed rate I had before. I simply moved “available credit” from the old card to the new one. They were very nice about it.
It is a global problem. The CC companies are arbitrarily raising rates to take advantage of the current climate. While they shouldn’t be allowed to do that, they can, and so they will.
I’ve also noticed that the CC offers in the mail have all but dried up, and I have “well qualified buyer” tattooed on my forehead.
Not in this household it isn't! Not a lick of CC debt, no car payments, and a paltry $1200 left on a student loan--to be paid off in the next few months (a year ago we were sitting on $17K of non-mortgage debt).
Dave Ramsey for President! LOL
corporatism is NOT conservatism.
I wish some people would get that...
The parasites at the credit card companies are no better than vulture.
Which is WHY we are getting OUT of Bank of AMERICA....have always hated them!!! Found a local Credit Union to store our funds in...
YEAH...that thought DID occur to me as I posted.....
You’re following the advice of a well know adversary against debt.
Obummer could screw up a one car funeral.
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