Credit Card Reform

Sen. Chris Dodd has put credit card companies “on notice”:

“If you currently engage in any business practice that you would be ashamed to discuss before this Committee, I would strongly encourage you to cease and desist that practice.”

Ooooooohhhh…

As terrifying as that must surely be to credit card companies, we know that ultimately credit card companies and the usury they practice will continue for a long time to come.

Why not? In America alone, there is $800 billion in debt owed to CC companies. Its a great racket: lend someone money, and watch the bucks roll in while doing not much.

Credit card companies ARE the big guy. They will not lower their astronomical rates and their late fees, they will not stop with their tricks and traps, and they have ensured that not even bankruptcy will protect you from the burden of debt.

Not w/out massive pressure.

I had an idea the other day as I was doing a balance transfer.

What if everyone who owes money to their credit card suddenly stopped paying their bill? What if everyone cut off the cash flow to the credit card companies and the banks that own them?

How are they going to go after 100 million+ americans?

Of course not everyone who has a credit card would do this, but how many people would it take to cause such a problem that CC companies would be forced to change their ways?

Some good info on a bill

�??Owning a credit card company is often a license to steal, but Senator Levin�??s legislation makes him the new sheriff in town,�?? said Ed Mierzwinski, U.S. PIRG Consumer Program Director. �??His bill bans some of the most unfair credit card company practices that strip money out of consumer pocketbooks and wallets.�??

�??Senator Levin is to be commended for addressing credit card abuses that can trap families in increasing debt rather than provide a means toward economic security,�?? said Mike Calhoun, President of the Center for Responsible Lending.

The bill would prohibit or restrict several credit card lending abuses that have received a great deal of attention in recent months, including:

Retroactive interest charges. The bill would prohibit the widespread practice of charging higher interest rates on balances incurred before a rate increase went into effect.

Outrageous interest rate hikes. It would limit �??penalty�?? interest rate increases to 7 percent above the previous rate if the consumer fails, for instance, to make a payment on time.

Repeat over-limit fees. Over-limit fees could only be charged once, unless additional charges increase balances above the account limit.

Fees for paying a bill. Credit card companies could not charge a fee to allow consumers to pay a bill by telephone, on the internet or by mail.

Interest charges for on-time payment. It would prohibit �??double cycle billing�?? and other practices that result in interest rate charges on balances that have been paid on time

Wait, you support this piece of socialist filth? This garbage is why democracy is shit and can only work in the most restrained conditions. The .gov rescues you from your own failings, so you keep voting for big brother. This stuff is pathetic and the domain of small men.

I have a good idea. How about not running up a credit card bill?

mike

How bout… PERSONAL RESPONSIBILITY.

You guys don’t understand. The CCard companies are evil, and the poor unprotected little guy is at their mercy. He is a victim, and we all know it is the Fed’s job to protect the little guy.

Never mind the fact that he used the fucking card to buy a big screen. Never mind that he signed a contract to get the card. Never mind the fact that credit card companies never force you to use their plastic.

Big brother needs to butt out.

Best way to put the CCards out of business is to not own one. But that’s like telling a crack whore to just say no.

[quote]Mikeyali wrote:
I have a good idea. How about not running up a credit card bill?
[/quote]

Agreed. Credit card companies offer a service for people who are able to make future payments against a present good. Their rates and fees must be high enough to discourage delinquency yet low enough not break their customers. Anyone who does not understand why CC companies operate this way does not understand how incentive works. The government has ruined the meaning of credit by destroying the consequences of unsophisticated borrowers and unscrupulous lenders.

The only requirements should be (1) complete and easily comprehended disclosure of terms; and (2) elimination of the ability to change terms of existing credit card agreements at will.

The true key is to not use a credit card unless you must. Before a person begins paying for things with credit he should turn off cable/satellite television. Cancel his cellphone contract and use a basic landline service which generally runs about 25 bucks. Also stop buying “crap” just because there is a new “crap” available to buy. The concept of “must own” should be abolished from your psyche. If you can afford it then you should buy it if you want it. If you cannot afford it do not buy it on the promise to pay later because you pay too much for something you could easily save for.

You want credit card reform, stop using them. Make them change their business practices by making their cards friendly to the consumer. More regulation will not help. Wisen up and stop using them.

I gotta tell you I have been tempted for five years now to put a lift kit and large tires on my truck. I had saved up to do this and was just about to when I met the woman I married. I took my truck money and bought her a ring with cash. Now she is wearing my truck add-ons on her hand and I still have not got a lift kit. Have I considered buying one? You bet your ass. But the thought of putting something so trivial on a credit card keeps me from doing it. Eventually I will have the money again and I will. But not at anytime we have to use credit or hurt ourselves financially.

I’ve never paid interest or fees on my credit card. It is basically a free service to me. I personally think the credit card companies are great. One time I got ripped off online, and visa did a chargeback no questions asked. You also don’t have to worry about debit card scams.

[quote]Thomas Gabriel wrote:
I’ve never paid interest or fees on my credit card. It is basically a free service to me. I personally think the credit card companies are great. One time I got ripped off online, and visa did a chargeback no questions asked. You also don’t have to worry about debit card scams. [/quote]

I agree. It seems to me people who hate credit cards usually are the same who are terrible with personal finances, meeting deadlines, understanding specific responsibilities etc in general. These same people usually like putting responsibility on others for the most part.

I like to build up debt to the maximum limit on my CC, pay it and start applying for new cards from different companies. They usually give me a larger limit to compete, so I cancel my old card and do the same with the new. I’ve built up quite a line of credit and my credit score is near perfect to boot.

I usually just buy things with cash or debit when I’m not playing my game with the credit companies, but I like knowing I have plastic if I’m stuck without cash or my debit card won’t work for some reason.

[quote]Sonny S wrote:
I had an idea the other day as I was doing a balance transfer.

What if everyone who owes money to their credit card suddenly stopped paying their bill? What if everyone cut off the cash flow to the credit card companies and the banks that own them?

How are they going to go after 100 million+ americans?

Of course not everyone who has a credit card would do this, but how many people would it take to cause such a problem that CC companies would be forced to change their ways?

[/quote]

Just ask a few mortgage lenders this question, I’m sure they could give you an answer.

I can also guarantee you the result isn’t what you are hoping.

[quote]Sonny S wrote:
Some good info on a bill

Interest charges for on-time payment. It would prohibit �??double cycle billing�?? and other practices that result in interest rate charges on balances that have been paid on time[/quote]

How does this work? I’ve never heard of it happening. It seems like all the other “unfair” practices can be avoided by not buying anything you can’t pay for, but if this one works the way it seems to, then it should be eliminated.

Personal responsibility is essential. Self-restraint is essential.
But so is eliminating predatory lending practices.

And those of you who believe that cc companies are a good way to learn responsibility, that they are honest businessmen who only want to make an honest profit, who do not engage in predatory lending practices, who don’t believe that credit card companies hide terms or write them in complex language on purpose, who don’t really mean to change existing agreements at will…that’s so sweet.

Tell me when you wake up and realize that there are wolves out there and the sheep need to be protected.

In any case, I was simply wondering what people thought of this organized protest. It doesn’t have to be credit card companies. It could be against the real big brother, voted in to office by Rainjack. Good job buddy!

[quote]Sonny S wrote:
Tell me when you wake up and realize that there are wolves out there and the sheep need to be protected.[/quote]

Instead of protecting the sheep, how about educating them in not being sheep?

Even if you go and regulate CC companies to death, the sheep will simply be taken advantage of in some other way. Like the saying goes, “A fool and his money are soon parted.”

You can’t go around regulating everything to death until the sheep are completely protected. You need to attack the root of the problem and educate people about money matters. Our kids spend at least 12 years in school, yet they learn close to nothing. THAT is the problem that needs to be addressed.

I believe credit card companies have many unfair practices, one being when you make a cash advance they can charge you up to 25% interest even if your regular interest is 8% and your cash advance will not be paid off until the rest of the balance is paid off.

I also think they should look at credit ratings, I believe it to be borderline discrimination against the poor. It can affect everything from your health Ins. To your car Insurance

This is why I don’t use a credit card.

[quote]belligerent wrote:
This is why I don’t use a credit card.[/quote]

Cost an arm and a leg? Or is that someone else in your avatar?

Pookie, how you can educate people not to be people? You can’t protect people from themselves, but you can outlaw bending them over a barrel.

I understand not wanting to “regulate companies to death” b/c it might stifle the economy is a popular refrain these days, and there is some truth to it. But CC companies ( and oil companies and military contractors and…) are not being regulated to death: they are the ones WRITING the regulations.

You have some interesting ideas re: school and, as a teacher, I appreciate the sentiment. The problem in today’s schools is you can’t say what you honestly think. There is no intellectual freedom. You have to have “divershitty” and “sensitivity” and “National coming out week” and 12 years of “everything evil in the world is done by the white man.”

I don’t know, maybe someone will start re-writing Home Ec curricula to include personal finance issues. But you’d have to do it so you don’t insult the capitalist system. Its quite sensitive you know.

[quote]pookie wrote:
Sonny S wrote:
Tell me when you wake up and realize that there are wolves out there and the sheep need to be protected.

Instead of protecting the sheep, how about educating them in not being sheep?

Even if you go and regulate CC companies to death, the sheep will simply be taken advantage of in some other way. Like the saying goes, “A fool and his money are soon parted.”

You can’t go around regulating everything to death until the sheep are completely protected. You need to attack the root of the problem and educate people about money matters. Our kids spend at least 12 years in school, yet they learn close to nothing. THAT is the problem that needs to be addressed.
[/quote]

[quote]Sonny S wrote:
Pookie, how you can educate people not to be people? You can’t protect people from themselves, but you can outlaw bending them over a barrel.[/quote]

That’s like asking “How can you educate illiterates not to be illiterates?” Easy: You teach them to read.

Basic finances is not a difficult subject. It can be learned and understood, just like any other basic subject. If you master K12 arithmetic, you’ve got all the tools you need.

I don’t buy that crap that most people are basically stupid and helpless and that we’ve got to pass law after law to look after them.

Well then, regulating them won’t help much, will it? They’ll simply devise new schemes to fleece the flock.

I have 3 credit cards, yet I’ve never paid a dime of interest, nor a penny in service fees. On the contrary, I’ve collected “points” to put towards car purchases (the GM Visa used to be exceedingly generous), got deal at hotels and had appliances reimbursed when they broke soon after the warranty wore off.

Used intelligently, credit cards are very useful. Used stupidly, you’ll rob yourself blind. Getting cash advances on them or “paying the minimum” practically guarantees you’ll stay poor for a long time.

Why not work on changing that then? Putting a better curriculum in place profits society as a whole. Making someone wiser towards CC companies also makes him wiser vs. banks, mortgages, financial advisors, etc. Instead of trying to legislate a never-ending cycle of fleecing schemes, you nip the problem in the bud by making better educated, more responsible consumers.

Think of it as as “vaccine” against predatory practices.

I fail to see how basic finances gets to be a politically charged issue. Will someone be offended if you show them how to make and balance a budget?

Being financially responsible doesn’t take anything away from Capitalist or “the system”…

[quote]Sonny S wrote:
Tell me when you wake up and realize that there are wolves out there and the sheep need to be protected.
[/quote]

Yes, but the last thing intelligent people like to hear from the government is: “Something needs to be done.”

Protectionism is bad. You need not think in such simplistic terms as sheep and wolves. There are other creatures out there that can take care of themselves that end up suffering when someone with good intentions comes along and tries to “liberate” them.

We responsible and intelligent people suffer for the stupidity of others because some bureaucrat needs a job. Look how unnecessarily complicated everything has gotten…