Forreal. I am still baffled how the 'PAYDAY' loan is legal it is something ridiculous like 400+ percent interest a year Rocket River
The class could help in showing students what they sign up for in a credit card and what size loans are appropriate based on your income. It would also teach you how to manage your finances better by saving, and budgeting so the chances of those types of emergencies crippling you financially would decrease. It would definitely help. Hell, it should actually start in the home, as many parents simply don't do this.
It would help. I was just saying it wouldn't help in a sizable amount of people who have credit card problems. I didn't mean to imply that it would be of no use at all.
You are correct on this point, but kids are hit up on college campuses the first day of school to sign up for credit cards and many of those kids don't have the faintest clue what they are signing up for.
Obviously it is not. Great point. But the hidden fees, the rapid escalation of rates on existing balances, and some of the underhanded tricks these companies have been using on their customers are BS and need to be stopped. That is what the credit card reform legislation passed last May (by a vote of 90-5 in the Senate) was designed to curtail. This legislation should be allowed to take effect. The punitive measures contained discussed the article quoted in the OP should not be passed. This latest bill, which has apparently been quashed, is just short-sited populist nonsense. It is good that it has failed. Also, I really like the suggestion forwarded by some of you guys that a mandatory personal finance class be added to the high school curriculum. That is a fantastic idea that I would certainly support the Texas Legislature passing in its next session. Do any local high schools currently have a mandatory class like this?
Some of it is when they start charging unreasonable interest rates that weren't part of the initial agreement.
So are cigarette companies, but we've made a decision that some of their practices (ads directed at children, proclaiming that cigs are healthy, etc.) create a societal ill and we've significantly cut down on the societal costs of smoking. Credit cards don't literally kill you, but they do siphon off ridiculous amounts of money that impact the country in the negative and that could be saved or spent in a more productive fashion. If you capped interest rates at 10%, I bet credit card companies don't go out of business... in fact, I bet they still make a handsome profit for their shareholders.
The cards are a variable interest rate. Thats part of it. I receive my notice of rate increases, and it says that I can opt to postpone it until my card expires, which I do. They can understand if the card company went from a 10% rate, then as soon as you carried a balance changing it to 30%, but the principle alone of charging 30% doesn't bother me, nor does the fact that it can change as long as you are given enough time to pay the debt, or seek a balance transfer.
Don't beer companies still try to attract children? I can't tell you how excited all those children on the Budweiser tour were. Nothing like commercials with animals, and on site horses to attract children. Is that wrong of them? I don't think so.
There is blame both ways. I don't think it's just the credit card companies faults but it's kind of ignorant to act like they are completely justified in what they do.
See Rim's and Mojo's posts. (this may be the only time I reference these two guys together to make a point!). The interest rate doesn't offend me as much as the convoluted disclosure and predatory practices. I 'took advantage' of one of these no-interest cards for the first time this summer. Very low rate for a specific time period. I read the agreement about a zillion times, noted the payment terms etc etc. Noted when to pay it back. The whole nine yards. I'm good at this stuff. Basically an interest free loan to be replaced by my regular financing when the time came. Easy, right? Wrong. The bastards nailed me with some bogus overpriced insurance I hadn't opted out of. Huge process to get out of it, and no refund for the couple of months it took me to figure out what was going on. And they've been sending me cool checks ever since goading me to spend for a holiday, home repairs, or, my favorite, to show my love for my family at Christmas. Remember -- I'm good at this stuff. I didn't need the money. I didn't trust them from the onset. And I still got caught. Small dollars, but still...Makes it hard for me blame the consumer. Their business model preys on the vulnerable. And they're good. The irresponsible consumer shares the blame, but the credit card companies need to be reeled in.
Credit card companies are the reason this country is in a recession. They collect money for a service that should have a fixed rate. For example, if you want a credit line for $1000 - pay $x/year, for $2,000 - pay $2x-2/year, for $5,000 - pay 3x-3/year, etc. "X" would depend on the risk factor of the client. If you have very good credit, "X" would equal $5 - $10. You can have multiple credit lines depending on your credit score. No interest. No variables. Either way they are wealthy.
Yeah. Let's hear from Palin, Pawlenty and the gang why they supports allowing the credit card companies to be "free" to raise their credit card rates even higher as the government uses tax dollars to bail them out and pay big bonuses to their execs. If the Dems are smart they will blow off the corporations that really have only luke warm support for them, when the GOP is basically by for and of the corporate elite, The Dems will try to rally the vast majority by catering to their interests. Otherwise you have a soft form of fascism. You see a lot of those hurt by the system following Palin types in their confusion. Essentially they think that they are getting more "freedom" from government while they vote for ever more corporate domination of their lives and blow off the potential chance to have a government that at least possibly could be changed democratically to help them with their increased economic insecurity. Falling for GOP and conservative propaganda, they don't realize the enormous difference on their lives and decreased "freedom" between too big and even too big to fail corporations and their neighbor's convenience store or house cleaning business.
“Credit cards are like snakes: Handle ‘em long enough and one will bite you,” she said. “You have to remember what are incomes to banks are outgoes to families.” This lady is my new hero. Why is it so hard for people to understand why business needs to be forced not to be predatory? There is a long, long, long, history in this country of people getting screwed, people complaining, government stepping in and forcing business to clean up the asbestos, stop sending children into coal mines, stop denying people jobs based on race, 40 hour work week, workers compensation, etc. etc. Business grudgingly gives up what they were doing to screw people over and then tinkers until they find a new way to screw them over. Then the cycle begins again. What's even sadder is it's beyond blatantly obvious that deregulation failed and that the middle class is getting squeezed more and more by the financial industry. After killing us with payday loans, usurious interest rates, hidden fees, rearranging charges, etc. we are forced to bail them out and they destroy our 401K balances as well. Then there are still people who defend them! WASHINGTON (Medill News Service) -- Unsatisfied with last week's move by the Federal Reserve to curb high overdraft fees on consumers, members of Congress stepped in Tuesday to tout legislation they think will provide further financial relief. In contrast to the Fed's new rule, which would ban banks from charging overdraft fees unless consumers enroll in overdraft protection programs, this Senate bill would limit the number of times a consumer could incur overdraft fees to once a month, at a maximum of six times per year. The fees would be proportional to the purchase. See full story on the Fed's new rules on overdraft fees. http://www.marketwatch.com/story/senate-debates-restrictions-on-overdraft-fees-2009-11-18 It's legislation like the above that I voted for Obama. This is helping the middle class. The banks were alive and well long before they raised these fees to $35 a pop, they will survive without it and if they can't they have a broken business model.
This is exactly why you DO need a personal Finance class. Emergency's should be paid with an EMERGENCY fun. You know, like your grandparents had. At least 3-6 months worth of expenses in liquid funds/savings/money market accounts. Enough to be able to live without income for 3-6 months. The problem with this country is that we've decided that flat screen TV's and overpriced clothes are more important than sound financial decisions.
