New minimum payment requirements seen hurting bank, credit card company pr

[lovuian]

http://feeds.bignewsnetwork.com/redir.php?jid=7923ed84449bcc3a&cat=3a8a80d6f705f8cc

NEW YORK (AP) - Making the minimum payment on your credit card bill might not be as easy as it used to be -- and two of the nation's largest banks say their own finances might suffer as a result.

Both Citigroup Inc. and JPMorgan Chase & Co. said in recent filings with the Securities and Exchange Commission that delinquencies and charge-offs might spike in the second half of the year. That's when the banks believe new federal guidelines that require significantly increased monthly minimum payments will begin to hurt customers already struggling to pay bills.

snip...

Banks will not only have increased losses, but reduced revenue as well," said Lehman Brothers analyst Jason Goldberg. "For some customers, the banks will have to reduce interest payments in order to keep them from defaulting. There's a bit of uncertainty because it's hard to predict human behavior
more...

You can't get money from people who don't have it!!! This is why I know a depression is coming
because our wages are going down and our buying capacity is going down with it...

Corporations are going to run out of buyers!!! because the majority have no money to buy... :rofl:

[valerief]

1. I thought they had India and China as customers

Isn't that where US Corporations do most of their business?

[genieroze]

3. What they pay them they can't afford any of their goods either.

It's starting to bite them in the a$$.

[smirkymonkey]

46. They won't pay the same prices that corporations have been

charging in wealthier western countries. Unless they are counting on sheer numbers of buyers at reduced prices. Ultimately though, I think it will come back to bite them in the ass. I can't wait to see these greedy fucks go down.

[redphish]

2. You'd have thought that they would have seen this coming.

Quite the backfire.

[lovuian]

7. Its the Greed that gets them... Thats what triggered the

Depression... its amazing to me that educated men can't figure out they need buyers to sell and make profits... these buyers need wages to buy

India and China don't give them the wages to buy so they aren't going to get anything from them either

[charlyvi]

11. Many people are paying off their cards too.

That is kicking them in the ass as we type.

[valerief]

16. That's where my tax return is going.

I'm going to try to live on cash as much as I can now.

[charlyvi]

18. My sister in law got in trouble with cards....

Paid them off, but can't get credit. She says that once you get used to it, living off cash is wonderful. You pay the money then it's finished.

[KansDem]

106. You and me both...

Yesterday, my wife and I sat down and figured our taxes. We should get enough back to pay off our cards, then it's "Adios!" to the credit-card industry.

I can hardly wait to mail in my cut-up card along with my final payment!

[Tight_rope]

110. LMBAO...It's a wonderful feeling!

[lovuian]

19. I know we are doing it this year... No more credit card

jerking around... I mean 20% interest when they get their money for 2 % thats usury... the worst of Medivel crimes!!!

[Wcross]

50. I paid off 4500 in credit card debt this month.

I was about to lose the 0% rate on the card, no sense paying interest.

[juliana24]

57. Homeland Security Alert !!!! Paying off credit cards is a strike with them

[BlueIris]

62. Schyeah, that's right. Nice work, George. But good for you, Wcross.

Keep it up. You'll sleep better, DHS visit or not.

[Wcross]

87. I hear the weather is wonderful at GITMO this time of year. n/t

[zanne]

131. That's great, but some people don't make 4500 a month.

Some people find themselves in a situation where they HAVE to use their credit cards for necessities like food and gas (and prescriptions). I know I've been there. It's not always about being "dumb" or "smart" with money. Sometimes it's all about not having any.

[Lasher]

64. I paid off $25K in credit card debt this month

I got a 15 year home equity loan to pay off this credit card debt, and also to buy a new truck. My monthly payment is about what the combined minimum credit card payments were. Cool, it's like I got a free truck! I hope I'll be able to deduct the interest paid on this new loan, but I think the pukes are trying to eliminate that tax break.

[CTyankee]

85. I refinanced my old mortgage at a much lower rate

and redid my kitchen (I had no choice, one wall had a hole ripped into it to replace my vertical pipe, plus it had an awful dropped ceiling). I get the deduction on my new loan. I could not get regular loan at as low a rate, plus it would not be a tax deduction on my Fed. income tax.

I've been paying in full on my credit cards for over 12 years now. Here's what worked for me: I MADE A BUDGET. I literally listed everything I spent money on, then I went back and looked at what was a fixed cost and what was discretionary spending. It's amazing to do this. You find all these place where you can save money. I still do a budget and go over my expenditures very carefully every month. If a certain budget area is high (like after a vacation) I go back to my budget to see what I allocated for vacations to see if I am within the guidelines. If I overspent on one vaction I underspend on the other one.

Works great and has a liberating feel!

[missingthebigdog]

86. Careful! Not always the best choice. . . .

Credit card debt is unsecured debt; if you can't pay, the company can sue you, but isn't very likely to, and they can't get your house or other assets. Taking out a home equity loan to pay off credit card debt converts it to secured debt, meaning you can lose your house if you can't pay.

If your job and income are stable, and you can keep yourself from running the cards back up, home equity loans might work for you. If, however, you are among the large percentage of the population that is losing ground financially, they are only going to make things worse.

[Lasher]

89. Thanks for sharing this concern, missingthebigdog

I just finished a big home improvement project and ran about $25K over budget. I used my credit cards to get myself through that, and then got the home equity loan to pay off the credit cards & get my new truck. You should see the new TV room, it's 17' X 17' with an excellent home theater & a Panasonic 50" HDTV plasma display!

I'm retired, and living off income from my IRAs. My wife is still working, so I guess you could say I am a kept man. There currently are restrictions on how much I can take out of my IRAs each month, but I will no longer have this constraint when I'm 59 1/2 years old in about 2 years. That's why I said I would probably pay off this home equity loan in about 3 years. But heck, I might not pay it off. With an interest rate of 6.775%, and if I can deduct the interest payments, I might be better off to leave that money in my IRAs, invested in equities.

I'm very lucky to be able to say I am not losing ground financially. This episode was all a cash flow kind of thing.

[Cobalt Violet]

77. That's what I did.

I didn't owe a lot. I will now always pay it off online right away. They won't see any of the 21% they want to charge me.

[charlyvi]

4. No shit.

Did they think folks weren't paying more on their cards just because they didn't want to? Did they think all of their customers had money they could pluck off their money trees? Meet the real world, Citibank.

[valerief]

6. When I send Citi my payment, I address it to

Citi Loan Sharks.

After decades of steady, timely payments, they've jacked up my interest to over 20%. WTF?

[lovuian]

8. Console yourself that they are losing their greedy shirts

and probably will have to reduce those interest rates!!!

[charlyvi]

10. Call them up and bargain.

They are soon coming to a point that any interest rate will work for them.

[valerief]

13. I'll try that. Thanks.

[NYC]

15. Re calling them and bargaining.

If someone says no, hang up, and dial again. The next person may say yes.

That worked for a friend of mine who was retired, and couldn't really afford the annual fee on her Visa card. First person said no; second person took off the annual fee and said it would not be charged in the future.

[valerief]

17. Cool. I'll do that all day until they get back to 8%!

*edited for typo*

[Ramsey]

96. I've done this several times

I've called an complained about late fees being charged for a payment being posted one day late, which they use as an excuse to jack up the interest rates. After all, I have no control over snail mail delivery, or when their office actually posts my payment to my account. In other cases the interest rate juts creeps up for no apparent reason.

I have gotten every single card company to lower my rate and to erase fees just by calling and asking them to. Some might say no at first, but be persistent. When they say they cannot do anything, then you say "Fine, please cancel this card immediately". I have never ever had a company let me get off the phone having canceled my card rather than lower the rate for me.

[Hekate]

121. Another way to bargain on interest is when you get an offer in the mail...

...for a new credit card with super low starter interest. Once I phoned my oldest card company and said I'd been with them since 1982 (it's on the front of my card) but was considering moving over. They bit and matched the interest for 6 months. A friend told me I could try that, or it never would have occurred to me.

I'm impressed with you DUers who are getting it together/have gotten it together. Credit cards are such a rip-off I can't even believe what they do is legal. The people who run the corporations and the people who pass the laws favoring the corporations -- I do wonder how they sleep at night.

My policy has always been to avoid owing those sharks anything for more than a few months, but thank the gods I have never had a catastrophic illness in my family. Job loss and illness seem to be the worst.

My own daughter filed for bankruptcy last year (she had a baby and then lost her job, so she became an unemployed single mother overnight). When I heard she was thinking of it, the only advice I could give her was, "Do it soon then, because the law is changing and you may not be able to if you wait." She did and I don't know the details, but I do know that offers of new credit cards keep pouring in. She is on her feet now, though.

Hekate

[merwin]

58. That happened to us as well. We never missed a payment and they

changed our rates from 10% to 20% because they said they pulled a credit report and decided that they needed to up our rates. The interesting part is that in the last year we've paid off about 30% of our debt. How does that make our credit worse? Ass backwards...

[tblue37]

84. I recently made a payment on a Sears account,

and when I checked my statement, it turned out that only $1.22 of that payment actually went toward paying down the principal. The rest went to pay interest. I have been steadily paying off my cards. I still have Sears and one Citicard left. They will be paid off by December--and then NO MORE.

I think they have killed the goose that laid the golden egg. What a buch of dumb-asses.

[Lerkfish]

90. precisely "killed the goose that laid the golden egg". well put. nt

[Mandate My Ass]

100. Chase did that to me

because due to temporary unemployment I asked for a forebearance on a student loan. The next month I noticed my credit limit had been drastically reduced and my interest rate was 23%, without ever missing a payment. They admitted they did "random" checks on customers' credit and mine had been red-flagged due to the forebearance. Buh-bye!

In the long run, they ended up doing me a favor. No more credit cards for me.

[Tight_rope]

112. "Citi Loan Sharks".....ROFLMBAO!

:rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl:
:rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl:
:applause: :applause: :applause: :applause: :applause: :applause: GOOD ONE!

[The Magistrate]

5. It Is Always Fun To Watch, Sir

When people actually get what they say they want....

[lovuian]

9. LOL!!! It is the best joke!!! They got the bankruptcy law

and it hurt them and now they raise minimum payments and it hurts them...

Ya gotta love it!!!

:rofl:

and not to mention they got the hatred of the American public thats their real payoff...

[LynneSin]

35. They didn't request the increase in minimum payments

that was an outside group hoping that by increasing minimum payments that people would be less likely to get into debt. If you have $2k on a credit card with 20% interest, it'll take years (and you'll end up paying way more than the original amount owed) to get that paid off if all you pay is just the minimum. I forget the group that pushed for it, but their hope was that by increasing the minimum, people would be forced to pay off their cards

[Gormy Cuss]

41. self delete

addressed down thread

[valerief]

12. As VP the Dick recently told us, too many of us live paycheck to

paycheck. We should save more.

It's like telling a paraplegic Iraq War vet he should take brisk walks.

[rucky]

66. We can all sell stuff on e-Bay

rich, i tell ya.

[raccoon]

94. You know, I could imagine Dick or Dubya doing that! nt

[SammyWinstonJack]

99. How does one go about saving more when one is living paycheck to paycheck?

:crazy: Guess that doesn't concern the bu$hco malAdministration which is filled with the "HAVES AND HAVE MORES" with Dead eye Dickhead at the top of the list. The lying cheating thieving POS! Have some compassion will ya, Dickhead? Not everyone is fortunate enough to steal their way into wealth, ya know?

[SheWhoMustBeObeyed]

14. They'll probably just make it easier to get loans secured by

homes and other property. Mortgages with rates that beat prime. "Consolidate your debt and save!" Then when you can't make those payments, they'll foreclose.

Consumers without collateral will be allowed to pay off their cards for cents on the dollar but their accounts will be closed and they'll be forced to turn to the car loan grifters or prepaid credit accounts.

When the bottom completely drops out, the barter economy will take its place. People who know how to mend and alter clothing, repair vehicles and appliances, and grow food will become very popular. Nurses and EMTs will provide neighbors with what medical care they can.

Once cast-offs, recyclables and hand-me-downs are all that the working and and middle classes can afford, marketing will turn it into a "trend" and sell it to those who can still buy new. Fancy a pre-stressed Lexus? Ill-fitting clothing? A deliberately mismatched living room suite? It's the hottest thing!

Sigh. Maybe, maybe not. But we have been here before...

[bemildred]

20. Yep. There is no going back.

We will have to find a way to make new, bigger loans to service the uncollectable old ones. Otherwise (gasp!) we will have to concede that Citibank has no useful product.

[valerief]

21. Well, it sure is a good thing they won't have a problem declaring

bankruptcy even while their customers can't do the same.

[bemildred]

22. It just means we will have a big crash instead of a small one.

But a bit later. Think of a 747 going into the ground with all jets on full instead of going for a belly landing on the ice.

[niallmac]

37. No matter what, the poor go full throttle into the dirt while

the special ultra uber class bushie has nurtured will barely look up from their brunch menus.

[bemildred]

40. Perhaps.

I think some of the trouble could "trickle up" this time.

[niallmac]

51. Ha! Nice thought!

I guess its all a matter of degree.

[Frustratedlady]

23. Yeah! It was called the Depression.

As accustomed as everyone is to buying what they need, rather than making it or making do with what they have, I'm not sure we could make it through another Depression. There were a lot more homemaking, gardening and preservation skills back then. If it happens, it will be interesting to see how we cope.

[Ouabache]

53. After 25 years of the GOP tearing out all the safety nets

that Democrats instituted after the first Great Depression. I say the next depression we outlaw unregulated CAPITALISM some way once and for all.

[llmart]

71. Some of us older folk would be just fine.......

I don't use credit cards or have any debt. I don't buy anything I don't need. It's time the younger generation learns that there are very few "needs" in life and that life can be very satisfactory without all the crap they buy.

I realize that some people use credit responsibly but I look around me and see mostly people who are very wasteful with their money, buying stuff they can live without. They're the ones who give power to the big corporations also.

[raccoon]

95. A lot more people then were farmers, so they could at least feed

themselves.

Not any more.

[Frustratedlady]

101. My father farmed and also owned a flat bed truck

Once a week, he would load up produce and animals from neighboring farms, haul it all to a town 50 miles away with train access, and sell everything he could. On the return trip, he would take the money his neighbors got for their items, purchase items on their lists and bring them back home. Each neighbor paid him enough to pay for the gas and wear and tear on the truck.

I was too young to remember, but my brothers told me that we always had enough to eat, the corn was used as fuel in the furnace and my grandfather was a cobbler, so we always had soles on our shoes. I remember that my mother despised Depression glass, as it was a reminder of those tough days.

I agree. The older people could make it through those sacrifices, but I don't see the younger generations being able to fend for themselves. It might be what we need though to bring our society back to the things that truly matter. I just hope we can do all this and still have Internet access. :P

[raccoon]

102. What's Depression glass?

"I just hope we can do all this and still have Internet access"--

AND air conditioning. I grew up without it and I DON'T want to go back to doing without it.

I remember seeing on a marquee a few years ago, "Whenever you long for the good old days, just turn off the air conditioning."

What you've said about your family reminds me of my mother's family. They were small farmers. They didn't have two nickels to rub together, but at least they had food.

[Frustratedlady]

118. Depression Glass is...

predominately glass that was made during the Depression and sold cheaply--many times in dimestores or a piece was put into soap, oatmeal, various other foods or household items to encourage homemakers to buy that product. I believe pieces were also given out at theaters, as well as used for prizes at fairs and carnivals. The dishes were usually clear glass or in colors of green, pink, yellow or amber, blue, etc., and the glass surface was either plain or had a pattern molded into it...sometimes, etched into it. Many women destroyed it after the Depression was officially over, but it is now quite collectible.

[anitar1]

120. Also, the 25 lb sacks of flour were in calico bags.

So my Mother saved them and made our little dresses from the bags. We also had a small farm , so we never really knew we were skating on thin ice all the time. WW11 brought us out of those years, but what a price we paid, in lives.

[Frustratedlady]

124. We need a thread on Depression Era stories....

I think it is so interesting to see how our parents coped.

Yes, I remember the calico prints--Mom always instructed Dad to pick the plaid sacks when he got feed for the chickens, so she could make school dresses--and she cut patterns out of newspaper for our outfits. I can't imagine how, but she was able to copy dresses we had picked out of the Sears and "Monkey" Wards catalogs, so we never felt like there was any difference from store-bought.

Thanks for reminding me.

[Lasher]

129. My grandfather beat a living out of the land during the depression

He did everything he could, from daylight to dark, to raise my father and his four sisters. Every bit of land that could be farmed was planted in corn or something. He raised pigs, cows, chickens, and cattle for beef. When he slaughtered a hog he would smoke the meat to preserve it. They usually didn't eat what they could sell - eggs and bacon were two items in that category. It must have seemed odd to my dad, gathering all those eggs and not getting to eat them. My dad says he remembers to this day, having to hoe corn all day long. He would look down the rows, thinking there was no end to them. His sisters didn't have to hoe corn. Girls hadn't been liberated yet.

He helped people in the community when he could. One family had a son who they couldn't afford to feed. Grandpa took him in and put him to work alongside my dad. The boy lived with them for several years. This was a common arrangement during the Great Depression, and it saved lives.

We would not fare as well in another depression. My grandfather had something that was very important to their survival: a horse and plow, and the ability to use them. It's been a long time since I've seen anyone plowing with a horse. Another difference is, there's more of us living on the same amount of land, so it would be much harder to find a place to plant a garden even for those of us who know how. And even if you did manage to plant a garden people would steal from you. That was not unheard of during the Great Depression, but I think people today would steal with such enthusiasm that there would be nothing left for the one who planted the garden.

I spent time on relatives' farms when growing up, and I raise a little garden every year on part of the land where my grandfather once farmed. I could butcher a hog and preserve it if I had to. I kill and butcher deer every year, so I'm sure that would come in handy. In the event of an economic collapse these skills would come in handy, but I don't think I could step up to the task like my grandfather did.

[anitar1]

119. Buy some FoxFire books.They have all the old skills

In the volumes.I have picked up quite a few volumes at used book stores and given them to my daughter.Handy to have and and very interesting.

[doodadem]

24. Thieving scoundrels!

We took out a second mortgage, and one of the things we paid off was a Chase Bank visa. Several months previous, the card had been with another bank that we'd used for years, and never had a problem with. Chase took them over, and within a few months, TRIPLED our interest rate, and payment. We went from 9% to 12, 17, then, 29. something %. Totally outrageous. I bitched my head off, and all I could get was, we sent everyone notices, if they wanted to opt out of the new rates, they could pay off their accounts and close them. Is that customer service or what?

So, paid them off to the tune of 17K, and said, close the account. That was in Dec. Since then, we've been getting nasty-grams and phone calls, saying you still owe us, I think $400. They held the payoff, and didn't apply it until after the due date. So the $400 is 3 months of interest on a ZERO balance.

I refuse to deal with them anymore, and have started writing, "Return to Sender" on the bills. I'm sure they're going to try to wreck our credit, while continuing to add interest onto this bogus bill. Happen to anyone else?

[NVMojo]

34. write them and tell them you are going to report them to your state's

attorney general for fraud.

[alcibiades_mystery]

79. Exactly right

Whenever you have a problem with a credit card company, just say "State's attorney general" and they will fall all over themselves trying to accomodate you. Say it, then say "I'm dialing the number on my cell as I'm talking to you." It is the panic button term in every credit card company in the US.

State attorney general State attorney general State attorney general State attorney general State attorney general State attorney general

[anotherdrew]

25. what if: Chinese banks start issuing consumer credit cards in the US

at rates a bit less than double what federal T-bills pay?

They've got plenty of dollars sitting around, why not lend it to their 'best customers' and cut out the middle men?

[SoCalDem]

26. Careful what you ASK for, banks

I think it's actually funny...

We paid off and cut up our cards last year.. Haven't used one since last August..Don't even miss them.. (We did keep one for emergencies, and hubby uses it now and then for gasoline...to keep it open)

I hope they LOSE their shirts.. They did this scam to "curb fraud"..they ARE the frauds..:)

I also hope that all the voters out there who are having trouble making payments, look at how THEIR reps & senators voted on this deal.

[LostinVA]

27. Boo-frigging-hoo

Vultures.

[question everything]

28. AP: Minimum Credit Card Payments Scare Banks

Minimum Credit Card Payments Scare Banks

By JOE BEL BRUNO, AP Business Writer 16 minutes ago

Making the minimum payment on your credit card bill might not be as easy as it used to be — and two of the nation's largest banks say their own finances might suffer as a result.

Both Citigroup Inc. and JPMorgan Chase & Co. said in recent filings with the Securities and Exchange Commission that delinquencies and charge-offs might spike in the second half of the year. That's when the banks believe new federal guidelines that require significantly increased monthly minimum payments will begin to hurt customers already struggling to pay bills.

The new requirements imposed by the Office of the Comptroller of the Currency — which regulates banks and some credit card companies — are designed to help customers avoid getting deeper into debt. However, a new spate of defaults as customers adjust to the new minimums could hurt profit at the nation's card issuers — especially those that cater to borrowers with weaker credit.

(snip)

http://news.yahoo.com/s/ap/20060312/ap_on_bi_ge/credit_cards_payment

[redwitch]

29. If they want to be helpful

they should do something about the usurious rates banks charge.

[HockeyMom]

32. Citibank charged me 30%

We had just sold the house (renting). I paid off Citibank in a hearbeat ($2,000). Do you know how hard a time I had trying to pay off the ENTIRE balance?

They didn't like it. I told them to cancel my card. I wanted nothing more to do them.

[question everything]

55. If you've just paid, don't be surprised if you will get yet

another statement, charging you additional finance charge for the time elapsed until they got your money. Could be as "little" as $0.50 or as high as $20, or so.

[HockeyMom]

116. They tried that

to the tune of $40. I paid ONLINE. I called and asked the TOTAL amount. I paid it then and I still got a bill for $40. Had to call up screaming at them, but when I got through to the "supervisor", she erased the $40 and canceled the account for me.

You have to YELL at them it seems to get any satisfaction.

[RazzleDazzle]

114. I'm a little confused

how could they give you difficult paying off your card? What did they do? Did they call you or something to try to talk you out of it?

Details, please!!

[Vincardog]

30. Duh ya think? First they destroy personnel bankruptcy then they jack up the

minimums so you can't meet them. Then they stick you with horrendous penalties and jack up the interest more.

Congratulations you are now a debt slave.

[LynneSin]

36. "THEY" didn't jakc up the minimum

That was an outside debt reduction group that pushed for increase in legislation in hopes that people would try and pay off their credit cards. The credit card industry didn't have anything to do with this one - they're just following the law

[DuaneBidoux]

127. Just fyi the raised min. was one of the few concessions the banks made in

the new law. The raised mins actually were fought by the banks and it was consumer groups that wanted it.

[Virginia Dare]

31. I hope every single one of them goes down in flames...

screw them for what they've done to our economy.

[Media_Lies_Daily]

33. I hope all of the credit card companies go under....

...and their executives go to jail for running one of the biggest con games ever seen.

[LynneSin]

38. Folks - Credit Card industry was NOT behind this

http://financialplan.about.com/od/creditcarddebt/a/CCMinimums.htm

Your Monthly Credit Card Minimum Payments May Double
The Good News and the Bad
If, like many Americans, you've been incurring credit card debt based on being able to afford the monthly minimum payment rather than whether your income and expenses can support the purchase of a particular item, you may be in trouble. For years, low monthly minimum credit card payments have encouraged us to spend more than we really can afford. Now it's time to pay the piper.

Under pressure from the Office of the Comptroller of the Currency (which regulates national banks), the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision, some national banks will soon be increasing minimum monthly credit card payments so they are closer to 4% rather than the current average of around 2%. Some major banks have already increased the minimum payments and others are about to follow suit.

In the long run, an increase is actually good news for consumers, but in the short-term, it could be devastating for people who have overextended themselves.


<<<<<snip>>>>>
Paying 2% of your balance each month barely covers the interest, and leaves very little to apply to your actual balance. That's why, if you owe $2,000 or more, and you only pay the minimum balance of 2% each month, it will take you approximately 30 years to pay off your balance even if you never charge another penny.

Under the new guidelines, the minimum payment will have to cover the interest and have enough left over so you could pay off your balance in 10 to 12 years if you didn't add any new charges. This is good because you'll get out of debt sooner and you'll pay a lot less interest over the years (thousands of dollars for many people).

++++++++++++++++++++++++

All I can say is if you're going to bitch about it then tear up those credit cards. I know sometimes they are the last ditch emergency only use, but if you can't buy stuff with what's in your bank account then you don't need it.
I've switched to using my debit cards for shopping. I also have a balance on a credit card that I switched to a "0%" balance card so I can pay it off without dealing with the interest (I have 1 year with 0% until I go back to normal).

[lovuian]

39. Its great you got 0% but you heard people say 30%

thats the credit card company who jacked the interest rate up to 30%

Me thinks the credit card companies doth protest too much.......

But thanks to the Comptroller their profits are plummeting...

[LynneSin]

74. That's when you switch cards

If someone offers 0% take it. They will charge you a fee for the switch (usually less than $50) but to have your credit card debt at 0% for 6-12 months - the savings are tremendous.

There are many people here at DU who talk about how they'll switch companies as soon as the hike kicks in - thing is, it can be done.

[Baconfoot]

42. Yeah. I'm sure I didn't need those IV antibiotics when I was underinsured

, had double pneumonia and was making minimum wage living alone.

Well, I guess in some sense if you're dead you don't need anything.

[LynneSin]

75. I guess you don't bother reading my threads

I did mention that people do need credit cards for emergencies. 60in Plasma TV - not emergency. Medications needed to survive would fall under emergency.

Do yourself a favor - READ THE ENTIRE FRICKING POST before making harsh judgements.

[Gormy Cuss]

45. And now a word from the FDIC

Since people seem to be ignoring LynneSin, even though she's right:

This from 2003. The Feds demanded an increase in the minimums out of concern for the overall health of the banking industry.

http://www.fdic.gov/news/news/financial/2003/FIL0302a.html#h6

Minimum Payment and Negative Amortization

Competitive pressures and a desire to preserve outstanding balances have led to a general easing of minimum payment requirements in recent years. New formulas that have the effect of further delaying principal repayment are gaining popularity in the industry. In many instances, the result has been liberal repayment programs that increase credit risk and mask portfolio quality. These problems are exacerbated when minimum payments consistently fall short of covering all finance charges and fees assessed during the billing cycle and the outstanding balance continues to build ("negative amortization"). In these cases, the lender is recording uncollected income by capitalizing the unpaid finance charges and fees into the account balance owed by the customer. The pitfalls of negative amortization are magnified when subprime accounts are involved, and even more so when the condition is prolonged by programmatic, recurring over-limit fees and other charges that are primarily intended to increase recorded income for the lender rather than enhance the borrowers' performance or their access to credit.

The Agencies expect lenders to require minimum payments that will amortize the current balance over a reasonable period of time, consistent with the unsecured, consumer-oriented nature of the underlying debt and the borrower's documented creditworthiness. Prolonged negative amortization, inappropriate fees, and other practices that inordinately compound or protract consumer debt and disguise portfolio performance and quality raise safety and soundness concerns and are subject to examiner criticism.

[LynneSin]

73. Thank you for backing me up

It's much appreciated. I know there are problems with the industry but let's not blame them for every woe out there

[davekriss]

43. It's called a crisis in aggregate demand...

...the reason for the Great Depression (I refer to the last sentence of the OP).

As wealth shifts from the many, who have to spend nearly 100% of every paycheck to gain the basic necessities of life, to the already wealthy, who have the basics thousands of times over and thus might spend only 60% or 70% of every additional dollar, aggregate demand declines.

The decline feeds on itself. Businesses, sensing a weakness in their market, slow production and lay off the third shift while they slow or postpone other job producing investments in additional capacity. The laid off, of course, decrease demand, leading to additional layoffs elsewhere and the whole thing cascades into the abyss of depression.

Wealth and income have achieved or exceeded the levels of concentration as was seen before the great depressions that followed the end of the Guilded Age and Roaring Twenties. This cannot auger a healthy future.

Our current circumstances are a result of the 25 year war on labor that began in the Reagan administration and has accelerated under the banner of Globalism. U.S. Productivity has increased at least two-fold over these years while median wages have stayed relatively flat (after adjustment for inflation) -- most of the gains of these past decades have been appropriated by the owning class. While this doesn't suggest a decline in overall demand, it does suggest it is lower than it otherwise would be given a more equitable distribution of income. However, it does suggest a certain fragility.

The policies of the Bush administration can easily puncture this fragile equilibrium we've established. Continued Republican fiscal irresponsibility, along with accelerated offshoring, has eroded the real standard of living of the many in ways I don't believe are accurately captured by the CPI. So, given a crisis (e.g., war in Iran and the closure of the Strait of Hormuz), I don't think there is any slack left amongst the laboring classes -- it may tip things into that downward spiral I mention.

Key to sustaining the fragile equilibrium I think is maintaining the hegemonic position of the dollar. The fact that most of the world's oil is traded in dollars has allowed Republithugs to borrow-and-spend, and the U.S. to overconsume (consume more value than we produce), in manners that have maintained aggregate demand. But note that things have grown dicey. Iraq begins trading oil in Euros in 2001 and the USG invades based on a fabricated casus beli; Venezuela trades oil in Euros and the CIA engineers an attempted coup and the USG continues to Hitlerize Chavez; Iran plans to begin trading oil in Euros this month so the USG has been busy manufacturing consent for another war. This cannot continue.

Pretty soon the vitality sapped by war and interest payments will puncture the fragile equilibrium I mention above, and demand will contract (via rising interest rates and falling dollar value), and we'll have our next Great Depression. The question for all of us is how soon. 2007 sound soon enough?

The wild card in all this is the growing middle classes of India and China and other nations. Their hungry mouths and open wallets may save the day for the transnationals, but that will do nothing to stop us from sliding into an Argentina-like decline of our own middle class, and the creation of a two-tiered society, with a rich, opulent upper class served by a thin sliver of managers and magistrates, and everyone else, cannon fodder and useless eaters. Bush has been very busy putting in the infrastructure and idealogies needed to repress those of us in the second tier who object to these circumstances.

(Of course, then what do I know, reality is thick, multi-dynamic, and may extrapolate along any number of diverse lines. I just seriously doubt cornucopia and peace is ahead, given the tea leaves before us today.)

[BlueIris]

61. Thanks for that.

I will copy and paste the text of your post into an e-mail and kick it around to all of my friends. They're gonna love it!

[Lasher]

65. Marginal propensity to consume

As we should have learned and remembered from the Great Depression, it is the consumer who primarily drives the American economy - not the investor. As I have often said, supply side (AKA trickle down) economic theories have never been anything more than an attempt to find moral justification in stealing from the poor to give to the rich.

The richest 1% already controls 40% of total wealth in the US economy. The two-tiered society is not a by-product of repuke policies; it is their deliberate goal. Bush's endless tax cuts increase the pace in which the gap continues to widen between his wealthy elite and the huddled masses.

Pretending to be concerned about the debt that they engineered with their borrow-and-spend policies, the Bush cartel has been gutting our social programs that were designed at least in part as a safeguard against another Great Depression. The destruction of these programs is not accidental, it is another goal. The pukes hate these programs because they do not conform to their ideologies. And, if there is one thing that this regieme can be expected to do with consistency, it is to put their ideologies before all else.

Thank you for your informed contribution, davekriss.

[SheWhoMustBeObeyed]

68. Thanks for that excellent post

2007 sounds right to me.

[Frustratedlady]

93. Very complex, but very interesting

I am just flying by the seat of my pants here, but have the feeling that something big is ahead and it "ain't" good. There are so many factions that have to enter into our economy working like a smooth running engine, that it is hard to tell how many parts of that engine are OK and how many need repairing.

With this administration, I believe they have damaged just about everything they possibly can and that they will be sitting in Dubai, in their fancy condos/homes and laughing at the rest of us who are sitting on the front curbs.

In all my life I have never held the disgust for another human being that I hold for this cabal.

Thank you for your fine writing. May God help us all.

[VegasWolf]

44. Wait!! I thought the Repukes said that the economy was all rosy and sunny?

:sarcasm:

[CountAllVotes]

47. I just dropped my lines of credit

I dropped my lines of credit way down on both my MBNA and American Express cards by over 400% (from $20,000+ on one to $5,000 and from $15,000+ to $1,500 on the other)! They weren't happy!

SCREW THEM! My plan is to eventually destroy both cards. I hate this crap. Why should I support these thieves? Dropping your credit lines way down or closing out the accounts should send a message or two or three or more!



:kick:

[womanofthehills]

48. Hope to pay off credit card in next few months

I will never get myself in a situation like that again. Many of my friends have done the same thing. So long credit cards...

[Sgent]

49. The banks are not to blame for this

The bank regulators (Federal Reserve, SEC, and Dept of Treasury) are.

The reason the amount increased is because the bank regulators changed how much must be paid for an unsecured loan to be carried as current (vs. overdue).

Banks have to track their assets by loan status -- for example:

99% of current loans are assets
97% of 30 day past due
92% of 60 days
... (note those are guesstimates, I have no idea what the actual % is).

By changing the %, it means that banks have to recongize a loss earlier, meaning a hit on their earnings.

[Rainscents]

52. Credit company are also punishing people who are never late

and always pay their bills! I am one of those, credit company decide to jack up interest rates just because "THEY" can! I will be paying off my bills and closing out the accounts. Yes, I do blame credit Co, for creating this mass!

[pinniped]

54. Fuck them. They are still making billions so they should STFU.

$39.00 late fees.

Cry me a ficking river.

[Occulus]

56. Oh BOO FUCKING HOO.

So the ASSHOLES who wrote the damn legislation aren't happy with the results.

SUCKERS!!!

See, what they failed to factor in- what they always fail to factor in- is that we control our money- not them. We decide to send them their payments, and by everything decent to us all, WE, and no others, determine whether and when our circumstances change and whether we are able to make the payment on time, on a payment-per-payment basis.

Basically, if shit happens, they're out of luck before I am. And that is how you deal with a soulless corporation- you relegate them and everything to do with the to the bottom of the list until circumstances permit. They are not human; you do not deserve to be enslaved to them.

Neither morals nor ethics apply, actually; you cannot harm nor kill a legal construct. That's all they are, and when you have personal contact- for example, by telephone- with their representatives, know you are speaking to a position, not a person; their 'feelings', by definition, cannot be hurt, as the 'position' has none. In other words, be as vicious and uncompromising as you like- these people, in their own words, are 'just doing their jobs'.

I should add, I've myself used this tactic multiple times, and it works marvelously well. The trick is to be sweet as honeyed cream once you get the supervisor responsible enough to give you their actual first and last name and office phone number on the phone.

Hey, if the corporate bot on the other end can't even give you their last name NOR their office location, they are not worth speaking to PERIOD, much less your courtesy or respect. Demand a supervisor, and be pissed as hell.

This all has the added benefit of making you feel better. I got my CC interest rate dropped from 23.99% variable to 6.99% FIXED doing exactly what I described above. it WORKS; they don't like mean and will do what they have to to get you out of their hair.

[Sadie5]

59. Loan sharks are what they really are

Have MBNA account for some time. Interest was at 8%. A few years ago they jacked the percentage rate to 29%. I have called for two years with no luck. All it did when they raised the percentage rate was add $$ to the account. They will not lower that rate even though I have never been late and not late with anything else. When Bush gets impeached or thrown out of office I hope the first act of the Dems is to change the CC laws.

[Rainscents]

60. Can you find another credit card with lower interest rate,?

I would be in a hurry looking for another credit company and transfer all the money over to new one and cancel the MBNA account. MBNA, Citi and Chase are the worst loan sharks. That's what I did.

[depakid]

63. How much could they possibly get "hurt"

with the usurious interest rates they're now allowed to charge?

Cry me an ocean of crocodile tears....

While you're at it- remind me again why I call AP American Propaganda- could it be because their writers (or more probably their editors) are little more than corporate spinsters?

[rman]

67. federal guidelines?

is it not the banks who came up with these guidelines?

[The Backlash Cometh]

69. J.H.Christ. Don't we have ANYONE in charge that can think long term?

[cap]

70. the hedge funds like this

more debt write-offs lead to more creation of high-yield distressed debt. There are cases of hedge funds pushing companies into bankruptcy.

[The Backlash Cometh]

72. Damn. Oh damn.

I hope those actuaries burn in hell.

[tsuki]

76. We don't have anyone in charge that can think short term.

[The Backlash Cometh]

88. LOL!

[meganmonkey]

78. LOL!!! I just paid off the one card I still use

I had a balance for about 3 or 4 months because of Christmas, and some traveling and car stuff, and I finished paying it last month with a whopping $750 payment (thank you, tax return!).

So the other day I got a letter from them that said something like "we noticed you recently made a large payment on your card. We hope this doesn't mean we are losing your business. Here are some checks that will give you 6 months at 0%apr blah blah blah SPEND MORE MONEY, ROTTEN CONSUMER!!!!"

Ha ha ha ha ha ha!!!

Nope! I keep this card open for internet purchases and emergencies, and that is all now. I will pay it off every month unless it is impossible. But I will take money out of my savings account to pay them if it'll keep them from making one damn penny in interest from me.

:P

[AzDar]

80. ...And THAT , my dear friends, is how you fix their usurious lil' red

wagons.
I know it isn't possible for everyone, but those who can, should.
Good for you, meganmonkey!!

[distantearlywarning]

103. One of my cards recently jacked up my rate to 30%

:wow:

For no apparent reason either. I am a very responsible user and am never late.

I paid it all off but $100 this month. Next month the $100 is going away as well, and then I am going to write them a very nasty letter telling them exactly why I paid off the balance and asking them to cancel the card.

The other card moves its due dates around every month in the hope that I will miss one and get charged a late fee and a rate increase. This past month I made a $600 payment (my minimum is $35 or so), and then discovered that they changed my billing cycle AGAIN to start the DAY AFTER my payment cleared, forcing me to make an additional minimum payment later in the month or miss a payment. How shitty and dishonorable is that? It's a good thing I checked or I would be late after making a $600 payment this month. I was pissed. :nuke: I bet they catch all kinds of people with those kinds of tricks, but not me. I'm on to the bastards now and I check what's going on with my account multiple times a month.

I'm paying that card off before summer. And then no more credit card usage. Those scum-sucking bastards are not going to get interest from me anymore, and they aren't going to get the user fees that they charge other people every time I use them. And no more worrying about moved due dates or sneaky rate increases or any of that other crap. I've had it with the credit card asshats. I hope they all go broke and their CEO's have to beg for handouts on the street.

[Seedersandleechers]

125. I had a cc (peoples bank) and would mail in payments 7-10 days

early. This was in the 90's so paying online was not an option. Month after Month they would post my payments the day after it was due. No amount of bitching, crying would change their minds. Now I haven't any cards...

[xchrom]

81. i ALWAYS pay my cards off.

i won't spend more than i can absolutely afford.

if want a big expenditure or i want to travel to europe -- i save in advance -- and then pay it off when the bill comes due.

i have no desire to let these folks make money off of me.

[LuckyLib]

117. That's the way to do it. You are their worst nightmare, as you

use their money, while paying your balance each month promptly, never incurring any interest or fees. You are what is known in the trade as a "deadbeat." Ironic, huh? Those of us who pay off card expenses are tagged with that term. It frosts them, as they spend to send you bills and process your charges, but NEVER collect a dime of interest from you. It's the only way to use credit cards. Screw 'em!

[JNelson6563]

82. The plan is backfiring

This is a huge bowl of irony that the banks/CC companies are going to have to choke down.

Julie

[Bassic]

83. Indeed, and they don't seem to realize that.

Big transnationals probably don't give a flying duck, because they probably figure they can sell their crap somewhere elese, but banks and the like are more dependent on north-american and perhaps european markets. If those go down, the banks are going part of the way with them.

It's about time they fucking realize it.

[hvn_nbr_2]

91. Corporations, meet dead golden goose. You killed it.

A thriving middle class is the consumer-driven economic engine behind corporate profits. They decided to extract everything from the middle class, basically killing it. A predator that kills all its prey will find itself starving.

[sojourner]

92. yup...much as it hurts, i can't wait for them to finally "get it"...

idjits. they are just greedy idjits.

i know they didn't want the minimums to go up...that was somebody else. but the banks deserve every f*ing bit of the misery they now experience. usury is their game and greedy is their name.

[bikebloke]

97. A sign, perhaps?

For a long time, my mailbox was continually filled with credit card offers. I had lots of postage paid envelopes to stuff with other junk mail and those annoying pizza fliers slid under the door. Then, they stopped for a while. I had to trash my own pizza fliers, rather than have the credit card companies do it. Suddenly, they're flogging credit cards again. I wonder if it's a last gasp.

Personally, I've never used credit. I had an old girlfriend who decided I wasn't amerikan enough due to my global wanderings. She wanted me to get a credit card. If I had used credit, I would never had travelled and lived throughout the world.

[lovuian]

98. Ya know what I'm seeing here is a revolution against the

credit cards and banks ... WHOAH!!!

[Carni]

104. Are these dumb asses just figuring this out?

Gee...who would have thought, that companies actually have to have customers who spend money, to sell their crap to?

This is so radical it cannot possibly be true.

[azmouse]

105. I'm in the process of getting rid of all credit card debt

and the scum-sucking bastards at all the credit card companies can kiss my ass. I'm taking out a new mortgage at a fixed rate. It allows me to roll all of my debt into the new loan and I'll have lower payments each month that allow me to pay more on the loan principal and I'll have everything paid off in less than 10 yrs. Even better, the interest rate is fixed at 6 1/2% (instead of the 19% credit cards are charging) and the interest will be deductable on my taxes because it's a new mortgage. I'll own my house sooner this way and be out of debt. I'm throwing one hell of a party when that beautiful debt-free day arrives!!!

[lovuian]

107. I think your part of the revolution ... this is really kicking them

in the butt!!!

:rofl: Lower profits is not good for them...

[azmouse]

108. I'm proud to help destroy the credit companies.

They've pissed me off one too many times!

[Tight_rope]

109. LMBAO...Fuck the Creditcard companies...I paid mine off in 1999!

And have lived without them for the past 7 years and have traveled more, enjoyed more of my life since then.

I thank Bill Clinton for the "PAY AS YOU GO" theology. It works. I'm stress free.

[Tight_rope]

111. To those people who were "DECLINED"....you have the last laugh!

[winston61]

113. predatory lending practice, giving credit to anything with a

pulse and now they got the stones to complain. Fuck 'em.

[iconoclastNYC]

115. I'm certain: A Democrat will be in office when the Depression hits

As soon as the next Democrat is elected, the new Fed chief will monkey with the money supply and cause the whole deck of cards to collapse.

The right wing sees opportunity in formenting a Depression. They have been engineering it for decades, and as soon as they can blame it on a Democrat, they'll trigger it. It will give them the political capital they need to go for full-on Nazi style dictatorship.

Watch for it.

[SuperWonk]

122. Swell -

From credit cards to predatory lending via those RAL loans from your expected tax returns - there are so many opportunities for companies (like HSBC for the RALs) to trap you with their ridulous rates.

What can we do about this situation?

[iconoclastNYC]

126. As Mike Malloy would say---

"Learn how to shoot a gun."

(I'm not advocating violence)

[kentuck]

123. Surprise! Surprise !

Who'd a thunk it?

[Tight_rope]

128. Kick!

[mdmc]

130. BiiiDen!

(in my Superintendent Chalmers voice)

[Jack_DeLeon]

132. Good those credit card fuckers deserve it.