Senator predicts swift action on credit cards

[OhioChick]

Source: Reuters

Thu Feb 12, 2009 1:57pm EST

WASHINGTON (Reuters) - Credit card practices considered unfair to consumers, such as sudden rate increases, will disappear sooner than a 18-month implementation period set by regulators, Sen. Christopher Dodd predicted on Thursday.

"These practices are wrong, and they're unfair," the Connecticut Democrat who chairs the Senate Banking Committee told a congressional hearing on the issue. "Mark my words: in the coming months, they will end."

Card issuers currently have until July 2010 to implement limits to sudden interest rate increases and curbs on confusing payment structures. The rules were adopted in December by the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration.

The new rules prohibit raising the annual percentage rate on existing balances except under certain circumstances and give consumers 45 days notice before a rate increase and 21 days to pay.

Dodd is among several lawmakers who have reintroduced legislation to curb abuses by card issuers amid criticism that regulators were too generous in setting their deadline.

Democrats Sen. Charles Schumer and Rep. Carolyn Maloney, both from New York, are among lawmakers who want to reduce the implementation period to as little as three months.



Read more: http://www.reuters.com/article/domesticNews/idUSTRE51B5SA20090212

[schmear happens]

1. I hope that people will just say no to credit cards...Part of what lead to this problem

is buying things without having the money to pay for them. I am hoping that as a society we become way better savers (speaking of myself, too)!

[BonnieJW]

14. People have not been using credit cards for pleasure.

They have been using them to buy clothes, food, medical care for their families. I'm tired of an accusing finger being pointed at middle class people whose wages have been stagnate for too many years. People haven't been taking cruises; they have been trying to make ends meet.

[schmear happens]

16. Come on, now...that may be true in some cases (especially in the last 6-12 months)

but this plastic lifestyle has been increasing since the Reagan years. Our sense of needs vs. wants is totally out of control. Don't accuse me of blame! It's called owning up! And everyone needs to or else this will just happen all over again when things improve.

Think of all the gizmos and gadgets that even teens have these days! I marvel at the cost of these "necessities!" I mean, iPods are very expensive and even cell phones with texting!

[sandnsea]

23. And wages have been stagnant since Reagan

The Americans that poster was talking about do not have those things. I've *seen* an iPod ONCE. That's *seen* one that somebody had. People have got to get out of their gated communities and walk around once in a while.

[schmear happens]

26. *Keeping myself from getting angry*

*I am NOT in a gated community. I am unemployed, at poverty level according to govt., no car, no house (rent an apt.), no cell phone, no DVD player...You name it, I probably don't have it!

*I have never had a credit card precisely for this reason. I didn't want to tempt myself to buy things I couldn't afford/didn't need.

*Yes, I agreed that some people are just using them for food, but do NOT tell me that this is the norm. Perhaps even some of those people could avoid such a bad practice (the interest is a killer) if they traded in their car(s) for public transit (if feasible in their area).

[sutz12]

28. I'd bet that you think of yourself as a "compassionate conservative."

;)

[TheEuclideanOne]

31. ROFLOL

:rofl:

[TheEuclideanOne]

30. You might want to get a credit card

I think that it will solve some of your problems, especially the cell phone and DVD.

[bigbrother05]

79. Why do you think no cell phone or DVD is a problem?

Clearly the poster has access to the internet and other things that are "add-ons" to daily life, just not everything that's advertised in the papers or on TV. A VCR is an alternative method of viewing/recording video oriented programming and most of us have the ability to function without texting our SO when we want them to meet us in the shoe store of the mall when they left the Radio Shack.

It seems that you missed the point: if you in over your head now, please reevaluate your life choices for your own self interest. That's a lesson we as a nation should learn.

[defendandprotect]

62. Extraordinary that you have accomplished that ... wow . . .

and, I agree, the norm can largely be more about "pleasure."

I think when we discuss these things, people think a finger is being pointed at them . . .

when clearly what is being discussed here is what would benefit the nation and all of us.

Because, quite surely, these cards only add to the expense of everything.

Just to recapture some of the discussion from another thread about these cards, people

who pay off their balances every month are seeing their card rates jump. What difference

does it actually make -- except that the card companies can usually count on everyone

having an emergency or a crisis at some time --- especially MEDICAL -- and being unable

to pay off a big balance for a time! They know this, we all know this.

And -- tho I'm only guessing -- I'm quite sure that we have a huge number of people now

who have been thru bankruptcy having been caught at least once before in the credit card

trap. Young people are very vulnerable to this -- especially with student loans going on

and on and on. We are all vulnerable and the credit card companies know it!

I certainly admire and salute your ability to say "no" --- and tho we hope that things

are going to change for the better, your decisions will still seem wise.

[defendandprotect]

66. since Carter . ...or maybe before?

[davekriss]

68. Wages have been stagnant while our productivity rose

That's something missed from many conversations. While productivity doubled and doubled again since 1981, the value generated by that increased productivity went predominantly to a small class of people at the very top of the socio-economic ladder. Our current troubles have absolutely nothing to do with the spending and borrowing habits of the vast sea of Americans. When wealth concentrates at the top, collapse is inevitable. It is one of the inherent contradictions of capitalism. It happened after the Guilded Age, after the Roaring Twenties, and again after the wild unrestrained free reign of the financial class and economic elites in the opening decade of this century.

[closeupready]

70. That's actually an excellent point.

n/t

[Hannah Bell]

46. i don't even have a cell phone.

Search ResultsShopping results for ipod cost

Apple iPod nano 4 GB Digital player - 4 GB ... $64 to $201 - 31 stores
Apple iPod touch 32 GB Digital player - 32 GB ... $310 to $490 - 12 stores
Apple iPod shuffle 1 GB Digital player - 1 GB ... $27 to $73 - 52 stores



cheapest model = $27. not exactly exorbitant.

[Divine Discontent]

57. a shuffle is not a functional mp3 player

the shuffle does just that - it shuffles what few songs it can store, there is no display on a shuffle and no controls beyond play and next. I don't know any teens that would be caught with that. Real iPods are a hundred to start, and two to five hundred for the good ones that you can use touch screens on. To some that's not much money, but to many that's a lot of cash.

[Hannah Bell]

71. then why is it advertised as such:

Instant attachment.

"Clip on the world’s most wearable music player and take up to 500 songs with you anywhere.2 Choose from two capacities and five colors — including four new hues — to make your musical fashion statement."

Sounds like it plays 500 songs to me.

http://store.apple.com/us/browse/home/shop_ipod/family/ipod_shuffle?mco=MTE2NTU

[SteelPenguin]

50. I agree

While I know plenty of people honestly struggling and putting food on the credit cards, most families I know who have debt just need to adjust their lifestyle.

When I was growing up most people didn't have cable. It was a luxury of the rich people in town. Now I know people who are sinking slowly more and more into debt, but pay out over a 100 a month for cable television, but the idea of not having cable tv is anathema to them.

A while back things were tight for us and I needed to curtail spending. I got rid of cable television, my comic book collecting, and quit smoking, and quit buying soda and junk food at the drug stores on a regular basis to or from work and suddenly I had $350 extra bucks a months in the budget from things I didn't need.

Not everyone has that room to play with, but it's surprising how many people bitch to me about their financial situation who do so in front of their Direct TV enabled HDTV with a Wii hooked up to it...Just sayin.

[sandnsea]

22. Exactly

I know a few people who are stunned at what it is like to live on a pretty good salary of $20 hr. There's no money for anything except basic bills and food. And that's well above the median wage. 50% of Americans simply cannot make ends meet without credit or food stamps, one or the other.

[RaleighNCDUer]

24. Paying 16% interest does NOT help you make ends meet.

I've never been so broke as I was when I had multiple credit cards.

Today I live in an uncomfortably small apartment, drive a 12 year old car and have NO debt.

I'm the only person I know who is not worried about the economy.

[schmear happens]

29. Thank you! I am so weary of people trotting out an example of SOME

people who use credit cards to buy groceries. It's a bad practice and should be avoided at all costs. And there are many, many people who got caught up in the "free money" snare of charging for clothing they didn't need (or was way too expensive), restaurant dinners too often, etc.

In other words, living beyond their means.

Hey, no harm, no foul...it's just the ego that needs to pretend that one never makes mistakes! But if a person can face the music, change can happen. Denial will never cause one to change, however.

[Stellabella]

34. What happens when your 'means' won't buy food or clothing?

I am so weary of people trotting out the 'blame the lower and middle classes' crap. This is the fault of the people at the top, who have been getting richer and richer and richer at everybody else's expense. Quit judging the masses - it's the top 1% you should be mad at.

[closeupready]

38. Amen. THEY are the problem. THEY control who gets credit and mortgages.

If they abused that responsibility, do NOT blame the little guy.

[Seedersandleechers]

37. My situation is very similar to yours

though my small apartment is comfortable.

[RaleighNCDUer]

116. Mine would be, but I moved there from a much larger (but roach infested)

apartment and I have difficulty letting go of my 'stuff' - mostly my 2500 book library and 2000 movie video collection (virtually all of which i purchased 2nd hand or was gifted with).

[Donnachaidh]

33. and they have been using them to live beyond their means, too.

Budgeting and living by it means you don't need the plastic. :shrug:

[Fire_Medic_Dave]

120. That may be true in some cases, but plenty have been using them on luxuries.

[HillbillyBob]

43. We have 2 cards one for a farm supply(we have a very small start up

ecofarm) one regular type. We only use in emergency mainly or when we have to have a piece of equipment that is too big a bite for a paycheck.
Then we pay them out 100 a month then till paid off.
So far we have kept the charges down as much as possible.
And yes it is because we are now making less than half of what we were when amBushco started our country on a steeper slope to hell as if it was not on its way down already. We should not have to use a credit card to buy a tiller or a a lawnmower. We were making almost 90,000 a year now its 43,000 and I am now disabled and cannot work outside the home. I can manage to harvest veggies etc, but not do any of the heavy work, my partner has to do all that and hold down a full time job, and not only is he making a little over half of what he was before being outsourced 2x in 2002, he does not get much in the way of benefits, his health ins is little more than a 10% discound card for meds and drs.
Im so sick of rpigs, 30 damn years is enough. That daft bastard ronny raygun got me twice. I was an air traffic controller in the navy when he started the push to really get all the fags out and I got outted and shitcanned. Then I could not get a job in civil FAA because of my discharge. So I had to take crap jobs for the rest of my working life, never making quite enough to go to school and eat, and no va benefits.

[defendandprotect]

60. Yes . . . an impossible dream, seemingly -- but would put us all on much better footing ---

There was a time when it made a bit of sense -- for big ticket items like

TVs and Refrigerators, etc. And that happened at fair rates -- usually over

three month periods -- with NO interest charges.

From there, everything got quite out of hand.

Personally, I've been trying to backtrack at least from the cash card to checks again.

The average card -- I hear -- carries a cost to business of 3.50% on the amount of the charge ---

plus 50 cents again to the business to merely swipe the card. Evidently American Express

tops them all at 7% on the amount charged!!!

[JerseygirlCT]

117. I use them often, for convenience

Don't care to carry that much cash around.

But they're always paid in full at the end of the month. We don't spend what we don't have to spend.

[xchrom]

2. i guess that's why they're hiking rates on good paying people like me

now.

i really hope he's serious about this.

[GinaMaria]

3. me too.

Nothing like paying on time, constantly having the credit limit increased and the APR increased at the same time. It's a big rip off. Their policies have been outrageous.

[getthefacts]

5. That is exactly what

I thought when I read the title to the posting. I just received a letter from my Cap One last week stating that they were raising my APR due to the current economic environment. Maybe they are trying to earn as much as they can before acting on the legislation.

[dave29]

10. see my post - got that same letter

did you also get a card offer for a second card from cap one a few weeks ago?

[pasto76]

12. another question is: after this "event" will they go down?!

looking at food and gas, Im guessing no.

[dave29]

8. yep -- capital one just doubled my rate two months after I finally got them to lower it

although, to their credit, they gave me the option to "opt out" of the rate increase (to 24.9%) by closing the card.

LOL.

This also two weeks after they sent me an application to open another card with them because I am "such a good customer"

edit to add: none of this matters as I do not keep a balance on the card. But still, for those with a balance, they are screwed.

[Democrats_win]

19. Multiple card offers: the INFAMOUS Cap one credit card trap.

http://www.businessweek.com/magazine/content/06_45/b4008048.htm?chan=search

"Cap One's Credit Trap
By offering multiple cards, the lender helps land some subprime borrowers in a deep hole and boosts its earnings with fee income.

"When Brad Kehn received his first credit card from Capital One Financial Corp. (COF ) in 2004, it took him only three months to exceed its $300 credit limit and get socked with a $35 over-limit fee. But what surprised the Plankinton (S.D.) resident more was that Cap One then offered him another card even though he was over the limit -- and another and another. By early 2006, he and his wife had six Cap One Visa and MasterCards. They were in over their heads.

The couple was late and over the limit on all six cards, despite occasionally borrowing from one to pay the other. Every month they chalked up $70 in late and over-limit fees on each card, for a total of $420, in addition to paying penalty interest rates. The couple fell further behind as their Cap One balances soared. Even so, they still received mail offers for more Cap One cards until they sought relief at a credit counseling agency this May. "I didn't open them," says Kehn, 33, who manages a truck stop and runs a carpet-cleaning business on the side. "I owe these people that much damn money and they are willing to give me another credit card? This is nuts."

Credit card experts and counselors who help overextended debtors say there's nothing crazy about it. Cap One, they contend, is simply aiming to maximize fee income from debtors who may be less sophisticated and who may not have many options because of their credit history. By offering several cards with low limits, instead of one with a larger limit, the odds are increased that cardholders will exceed their limits, garnering over-limit fees. Juggling several cards also increases the chance consumers may be late on a payment, incurring an additional fee. And if cardholders fall behind, they pile up over-limit and late fees on several cards instead of just one. "How many more ways can I fool you?" says Elizabeth Warren, a Harvard Law School professor who has written extensively on the card industry. "That is all this is about."

Consumers may not be the only ones who are unaware of Cap One's ways. Its practice of issuing multiple cards to some borrowers with low credit ratings doesn't appear well-known in the investment community. And just how much Cap One relies on fee income, vs. interest, is a mystery, since, like most lenders, it doesn't disclose that. All credit card companies have become more reliant on fee income in recent years, but in a report issued in 2002, William Ryan, an investment analyst at Portales Partners, warned that Cap One's earnings could be "devastated" if regulators cracked down on multiple cards or fees....

[WriteDown]

42. Odd...

did cap one also forge their signatures on the applications?

[roguevalley]

15. how about fixing the rate at 5%? stimulus anyone?

[radfringe]

41. cap the interest rates to "x" over prime... n/t

[surrealAmerican]

59. I agree.

There is no reason we NEED to allow them to charge more than 15% ever.

[Myrina]

4. During the hearing yesterday, the bankers were asked:

... " to those of you who received TARP funds and offer credit cards ... have you lowered your cardholders interest rates,
or do you intend do now that you've received TARP funds?"

ALL OF THEM ANSWERED NO, THEY WILL NOT LOWER INTEREST RATES.
Even though WE are loaning them money at 5%, which they turn around and loan us - our own money - back, at anywhere
from 8- 24%.

THAT, my friends is beyond fucked up.



:mad: :nuke: :spank: :mad: :nuke: :spank:

[glowing]

6. This is why anyone who continues to pay is a fool. If the entire country

said fuck you, well, then we'd have action fast.. but no, too many are so duped into "the right thing" b.s.

[lark]

53. Quit using their services

My family quit using credit cards 3 years ago. We now live within our means. We may not have new cars or brand name clothes or food, but we have a lot more peace of mind. If we want something, we save for it. My husband's company where he was the Regional Sales Director closed down and he had to take a MUCH lower paying job. We cut our expenses further and are still getting by with no credit usage, other than our home loan. I refuse to subsidize those thieving conniving sharks.

[glowing]

63. I know I am trying my best to pay them off.. but there have been times that

without using a credit card, we wouldn't eat or we would lose the electricity. I wish there were better resources for working class persons with the squeeze on... but we make too much for medicaid or food stamps or energy assistance. Yet, we pay our taxes and work our asses off. Sorry, one person here or there giving them up is not going to change the system... it takes an entire populist movement to scare the shit out of them and give us a system that works for the MOST of us.

[Baby Snooks]

7. It's because Congress is beyond fucked up...

Congress no longer serves the interest of the American people and this along with the "economic stimulus" should serve as proof finally. Whether they are Democrats, Republicans, or Republicrats. They all serve Wall Street. Not Main Street. Where a growing number of Americans are now living. On the street.

Maybe this November things will be bad enough finally that people will bounce the incumbents out of office. Whether they are Democrats, Republicans, or Republicrats. At this point, honestly, they all seem to be Republicrats.

I know Republicans are stupid. Are Democrats stupid too? Where is the OUTRAGE over all of this?

The average American, aka the "middle-class" American, will see an extra $7.70 a week on their paycheck. That's quite a stimulus.

And who told you we are loaning the banks money at 5% interest? You need to check the Federal Reserve rates. Some banks are loaning US money at 5%. And still making money. And making lots of money off the adjustable rates on the credit cards. As they always have. And always will.

[Psephos]

17. Well said indeed n/t

[closeupready]

39. Absolutely correct.

n/t

[Myrina]

54. 5% was the number they were tossing around yesterday ...

Keith Ellison and Maxine Waters, I think, when they were questioning why the banks are getting money cheap from US, but then charging us 3x that amount to loan it back TO us ...


:shrug:

[defendandprotect]

65. There has to be a link between what you are paid in interest on savings . . ..

and what lenders can charge and it should be a 25% difference in their favor!

[CoffeeCat]

9. Allowing these evil companies to own you...

...is not optimal, in my opinion.

[terisan]

11. Too little too late. So what if the Big Banks fail--No one in the administration

lays out the facts on what would happen---just scare tactics.

[MannyGoldstein]

13. How About Repealing The Absurd Bankruptcy "Reform" Act?

Would that be asking too much?

[harun]

45. Works for me. Horrid bill.

[jody]

18. Why don't they repeal the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" that

played a role in the current financial debacle?

See http://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_and_Consumer_Protection_Act

[Psephos]

20. You could start by asking Dodd and Obama

given that they were the largest Senate beneficiaries of credit industry donations.

I wouldn't hold my breath on that one.

[jody]

25. Agree and the corporatist party continues to reign supreme even though we have a new president. n/t

[Psephos]

27. I'm glad it's Obama instead of McCain, but you're right, corporatists hold the real power n/t

[karynnj]

32. Please stop misusing the donation information

Obama, Clinton and Kerry will be high or top for nearly every market segment - even though Kerry and Obama did not get huge PAC donations from them. This is because the top level numbers reported in sources like open secrets combine PAC donations with individual donations from people who work for the company. These three are high because they raised a huge amount of money - from people. (Of the three, Clinton had the most PAC money from what I have seen in other industries - but not enough to put her as top. In fact, in the Banking category - though the Republicans mentioned Obama, Dodd and Kerry - on PAC money the top ones were Republican.

This does not explain Dodd's numbers - if your comment is accurate - I know he is very high on the banking list. I always hear Biden was among the highest for credit cards.

[Psephos]

35. No offense, but your analysis is unpersuasive

You're asking me to not believe there's a correlation between the amount of credit industry money a Senator receives and the way that Senator votes. The voting records directly refute you.

I also don't consider it exculpatory that the Senators you mention received a huge amount of money from people in that industry. Quite the opposite. It takes extraordinary naivete to think cash doesn't influence votes.

http://www.opensecrets.org/news/2008/07/top-senate-recipients-of-fanni.html

[karynnj]

44. Well, I find your inability to see that those people

really can't be compared to other Senators. Unless they are retired or independently wealthy, everyone works for someone and in some industry. I think you are too cynical to believe that every person who went to Obama's website (or to the others) and gave $25 or whatever amount did it because they thought that doing so would, in aggregate with contributions of their peers, change the Senators' positions. Before I retired, I worked for AT&T and Bell Labs - and I contributed to campaigns. My contribution had to do with supporting the candidate - not AT&T. I think MANY people on this board did the same thing.

At minimum, it would make sense - in ranking them to eliminate the contributions to the Presidential campaign because the money raised in total for that is an order of magnitude greater than people who have just run for the Senate. Even then, these are cumulative numbers over different numbers of campaigns. (I think they have data since the 1990s) They need some methodology to scale those numbers because they are comparing apples and oranges and it is stupid. In addition, they need to split out individuals.

PS Obama voted against the awful bankruptcy bill of 2005. Kerry and Dodd voted against the one in 2001 and in 2005, which they also voted against cloture; HRC voted for the 2001 bill and voted against cloture (to filibuster) the 2005 bill. (that was the key vote - the Democrats could not win if they lost on teh cloture vote and Bill Clinton was having surgery on that day.)

[closeupready]

55. Re: scheduling a vote for a day like that (Clinton's surgery),

you just KNOW the GOP did that on purpose. :mad:

[karynnj]

58. That's silly - it did not matter

The Democrats could have stopped it with 41 votes on the cloture motion. They couldn't get them. To win on the later vote, they needed 51. If we did not have 41, we certainly didn't have 51 a few days later. The Republicans did not go outof their way to schedule the vote on that day because of Clinton.

[closeupready]

69. Ah, I see. Thanks for the correction.

:hi:

[Psephos]

75. We seem to have misunderstood each other :)

I was not referring to the $25 donors through the website. I was referring to the large-impact industry donors, who only were donating because of hope or expectation for quid pro quo.

You made some very good points in your post...I agree with you that in essence, whoever controls methodology controls outcomes and conclusions.

As far as the vote on the 2005 bill, yes, I do know who voted for and against it (and am proud of the 25 Dems who said no - compared to the zero Republicans who said no). However, my point was that the big donations to Dodd et al. since then make an overturn of the legislation a lot harder to envision. They would have to find political cover. Obama doesn't need the industry anymore - but then, he's not in the Senate anymore, either.

[closeupready]

40. Obama actually voted "No" on bankruptcy reform.

If I recall correctly. Calling the legislation "typical" - meaning, I presume, more of the same servicing the interests of the moneyed and powerful to the detriment of the middle and lower classes.

[jody]

48. You are correct, Obama did vote nay, see link below.

http://www.govtrack.us/congress/vote.xpd?vote=s2005-44

[Hekate]

47. That bill was so bad I actually advised my daughter to file before it took effect...

To say I don't believe in filing for bankruptcy except as a last resort would be an understatement, but my daughter was coming out of a bad marriage and was saddled with his debt. Usually I stay out of her business, but when she mentioned that she thought she "might have to" all I could say was, "If you think so, do it NOW, because the law just changed and it's nasty." Goddam Republicans.

One of the most shocking things I've read about the years of Bush (it's also in Sicko) is that the biggest cause of bankruptcy is a major illness in the family -- with expenses put on credit cards. The change in the Bankruptcy laws means the consumer is up shit creek without a paddle. Goddam Republicans.

To say I'd like to see the BAPCPA of 2005 repealed is another understatement. :argh:

Hekate

[Psephos]

73. Sorry to hear about your daughter's troubles

Hopefully, it was good to get all the financial pain over with in one concentrated episode.

Meanwhile, you might consider a look at this paper that examines the root causes of personal bankruptcy across a broad population. Here's the abstract.

******************************
This paper utilizes the population of personal bankruptcy filings in the state of
Delaware during 2003 and finds that household expenditures on durable consumptions,
such as houses and automobiles, contribute significantly to personal bankruptcy. Adverse
medical conditions also lead to personal bankruptcy filings, but other adverse events such
as divorce and unemployment have marginal effects. Over-consumption makes
households financially over-stretched and more susceptible to adverse events, which
reconcile the strategic filing and adverse event explanations.
******************************

http://www.gsm.ucdavis.edu/uploadedFiles/Faculty/Directory_and_Profiles/personal_bank.pdf

Bottom line is that medical costs are more often a proximate cause than a primary cause of bankruptcy, secondary to overstressed household finance. In other words, overspending creates inability to weather unplanned-for events.

Interestingly, this is what most personal bankruptcy lawyers say, too.

I don't mean, by the way, to imply this has anything to do with your, or anyone else's, personal experiences. Your post simply made me remember seeing this.

Best of luck to you and yours.

[Hekate]

74. Thanks, Psephos--she came out of the experience okay & was able to get back on her feet again...

Which, it seems to me, is what bankruptcy is supposed to be for, after all.

Hekate

[Psephos]

76. Amen n/t

[Hannah Bell]

72. good question. & interesting timing on that "reform," eh?

just in time for the meltdown, & now they can go after ordinary people for forms of post-bankruptcy debt they couldn't before.

[Democrats_win]

21. It's a good start. America must deal the death card to the credit card industry.

They should ban these cards retroactively to 1970. Any amount owed by Americans should be wiped out. The credit card industry may be the greatest cause of suicides in America. It's time for THEM to go broke now.

[rpannier]

52. As long as there is a big world out there credit cards are not going away

They are used quite a bit in almost every country around the world.

If you think the US can bankrupt them, think again.
The Japanese and Koreans use credit cards for over 50% of all their transactions: That includes groceries, regular shopping, bill paying, etc

Europeans use them extensively too.

Haven't been to west Asia in over 20 years so I can't comment.
Same about Africa. was in north eastern Africa in 86, haven't been back since.

[defendandprotect]

64. Yes, credit corporations .... but, let's face it, ALL OF CAPITALISM has to go --- !!!

We can survive better without caitalism --- and that goes for the entire world!

Capitalism is a system intended to move a nation's wealth and natural resources from

the many to the few.

Unregulated capitalism is merely organized crime.

Move On!

[mdub]

119. Examples Please

Please provide examples of economic systems that are superior
to capitalism, using historical examples.  Thank you.

[Piewhacket]

36. Past time. Do it now.

[tjwash]

49. I just pulled out all the money I had in an older savings account, and paid all of mine off.

It sucks, and I was depending on some of that money for retirement. But, now I am debt free, except for my mortgages, which are fixed. I completely paid off all of my CC's and all my HE LOC's.

I'm just keeping one American Express card for emergencies. I got the AE card that needs paid off every month.

Fuck those CC companies...I hope those greedy bastards all end up unemployed and scrounging for their meals out of dumpsters.

[rpannier]

51. Are they going to cap the interest these companies can charge

These usury fees they're charging are criminal.

The difference between them and a loan shark is they don't have someone come by and break your arm

[SOS]

61. Did you see my thread on NYC pending legislation?

We need more of this type of activity on the local level:

"Resolved, That the Council of the City of New York calls upon the City of New York to divest its assets from financial institutions that evade New York State’s usury law."

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5037221

[rpannier]

67. No I hadn't but I just Rec it

[JerseygirlCT]

56. How about a top limit on what they can charge, period?

Didn't there used to be such a thing?

[superconnected]

80. Yes there was a cap. It was taken away in the 1980's. Congress overturned it.

[aquart]

77. Will they end before my mom cuts up her Chase Visa-- or after?

[DarthDem]

78. While We're At It . . .

. . . this is a bit tangential, but with all of this welcome and long-overdue banking reform, how about eliminating those ridiculous ATM surcharges? When they were first introduced, the Senate Banking Committee had hearings about them, but in a huge shock, under then-chairman Al D'Amato, nothing ever came close to being done.

Would now be a good time to check into this highway robbery?

[myrna minx]

81. Dodd Says Credit Card Companies Are Gouging Customers (Update2)

Source: Bloomberg

By Jeff Plungis

Feb. 12 (Bloomberg) -- U.S. Senate Banking Committee Chairman Christopher Dodd proposed new limits on fees and charges for consumer credit cards, saying an era of lax regulation had lead to “gouging” of U.S. consumers.
Under legislation introduced yesterday, companies such as Bank of America Corp., Citigroup Inc. and American Express Co. would be limited in the kinds of fees they can charge. The bill would ban unilateral changes to credit-card agreements and retroactive interest rate increases.

“At a time when our economy is in a crisis and consumers are struggling financially, credit-card companies in too many cases are gouging them, hiking interest rates on customers who pay on time and consistently meet the terms of their credit-card agreements,” Dodd said at a Washington hearing today.

snip

Dodd’s legislation, introduced with Senator Carl Levin, a Michigan Democrat, would prevent “any-time, any reason” rate increases, according to a bill summary. It would require that interest rate changes only apply to future debt. And it would allow customers who close their accounts to pay under their existing terms. A similar bill has been introduced in the House of Representatives.

Lawmakers considering further credit-card restrictions should first study how the Fed’s regulations are working, said Senator Richard Shelby, the panel’s senior Republican. The banking industry is already “drastically altering” credit-card agreements, he said.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=awN_GWiyzDc8&refer=home#

[glowing]

82. I think that until these banks pay back their loans, they cap the interest

at 5%.. the same that they pay.

[Dreamer Tatum]

91. Makes absolutely zero sense

You expect them to repay the government by lending money at cost?

That's silly.

[ixion]

100. 5% is not cost, it's 5%... and they wouldn't be making ANYTHING

if we hadn't bailed their sorry asses out. The LEAST they can do is charge a reasonable interest rate.

[Dreamer Tatum]

111. Sorry, fundamentally silly nt

[ixion]

114. my... how generous you are

with other people's money. :eyes:

[Stellabella]

112. Fine. Give them 1-2% profit.

Considering the 'interest' rate on my checking account is 0.25%, that's a good deal for the fricking banks.

[aquart]

83. "Drastically altering"? That would be $36 for being one day late?

That kind of drastic alteration?

[Skink]

92. How come the electric company only adds a buck if you are two weeks late?

[Dr.Phool]

101. And jacking your interest rate up from prime to 29.95% at the same time.

Chase did that to me a few years ago, and I had to leave town for an emergency. I thought I'd paid all my bills online before I left. When I got back home 2 weeks later, I saw the bill and paid it immediately, 2 days late. I'd had that card for over 10 years, and had never been late.

I called them, and they said they could lower it to 27.5%. I said "fuck you. Close the account". Paid the balance, and chopped up the card.

[wryter2000]

84. A great start

Go, Dodd. :bounce:

[K Gardner]

85. Let me get this straight. Republicans screwed the economy into the ground. People are

losing jobs and going broke/homeless.

Our tax dollars are bailing out banks and cc companies.
CC companies are charging US higher fees to pay for "charged off" debt.

We're getting hit twice by the bastards.

And Shelby (R) threatens that if we regulate fees, they'll tighten credit?

WTF??!! :wtf:

Lawmakers considering further credit-card restrictions should first study how the Fed’s regulations are working, said Senator Richard Shelby, the panel’s senior Republican. The banking industry is already “drastically altering” credit-card agreements, he said.

Congress and banking regulators “need to be especially careful in this time of financial stress not to take actions that unduly restrict the availability of credit,” Shelby said.

[fascisthunter]

97. Republicans Seem to Be Pro-Economic Slavery

give all the means for the powerfully wealthy to control everyone else by way of debt and poverty. It is their primary agenda....

[ayeshahaqqiqa]

86. any congressperson voting against this proposal

would be committing political suicide, imho. The credit card companies are looked on almost universally as "bad guys" who only live to rip off consumers.

[Loge23]

87. They gouge businesses too!

I'm a small wholesaler. We paid over $250,000 last year for the privilege of accepting credit cards for payment - on already low margin business.
For us, it's a competitive issue - you have to take them these days.
But as a line item on the P&L, it's a killer. I could employ more people with that money for a year.
I can imagine what a Macy's or Home Depot pays these thieves.
Then, they screw their end users also!

[nradisic]

88. Keep it up...

We need new credit card legislation asap. The banks cannot help themselves therefore they must be treated like the children they are. Lots and lots of rules. Keep up the hard work Senators.

[HopeHoops]

89. Hmm. What's the word I'm looking for here. OH YEAH - - - DUH!!!!

[Hawkeye-X]

90. Those who signed the Bankruptcy Bill back in '06

are complicit.

That includes MBNA Biden (Sorry - have to use this phrase).

Solution? Revoke the '06 Bankruptcy Bill, and force the CC companies to be charging everyone maximum of 5.99% interest. Anything higher is subject to major penalties, including revocation/dissolution of said company, forced Chapter 7 bankruptcy and eating ALL costs.

I would also support a clean slate amnesty for ALL cc holders who are being gouged (myself included) TO 0.00 owed. CC can go eff themselves if they can't handle this kind of amnesty because it 'cuts' in their profits.

Hawkeye-X

[depakid]

93. Had Democrats been on this bandwagon (or actually, had they not gotten off)

they might have never lost congress.

[Proletariatprincess]

94. About bloody time!

But it doesn't go far enough. The usury and abuse has to stop. We need credit card debt forgiveness and it should come out of the banks obscene profits of the last decade.
Who is the bigger crook? The banker or the bank robber?

[DCKit]

103. Currently, that's only the difference between an inside job and outsourcing.

The banks didn't go broke by themselves.

[keepCAblue]

95. CC companies now: Buy Something or Else! (cancel accounts)

This is disgusting....


One of the biggest causes of the financial crisis was that Americans were borrowing (and spending) more money than they could afford to pay back.

So how are credit-card issuers reacting to consumers' attempts to live a more financially responsible lifestyle? They're threatening to cut their credit cards off if they don't spend enough.

Loretta Maxwell of Troy, Mich., thought her credit score of 790 buffered her against most of the fallout of the credit crunch. When Chase (JPM) closed her $6,000-limit card in December without warning after two years of inactivity, she called to fight it. She was unsuccessful. "If you're not using it, they entice you to do so, and then the moment you don't spend enough, they cut your limit," she says. (Chase says it is standard practice is to review inactive accounts. "Inactive cards with large open credit lines present a real risk of fraudulent use and large potential liabilities for Chase," says spokeswoman Stephanie Jacobson.)

Maxwell's experience is far from an isolated incident. Most major issuers, including Chase, Bank of America (BAC), American Express (AXP) and Citibank (C) have been slashing credit lines and closing the accounts of those who don't spend on their card regularly. While these issuers are required to notify you in writing of an account closing, there's no requirement that they do so in advance. Even when they do give early notice, the only way a cardholder can stop their account from getting shut down is to start spending again.

MORE AT LINK: http://finance.yahoo.com/loans/article/106572/Credit-Card-Issuers-Buy-Something-or-Else

#################################

And then there's this: Experian will no longer let consumers know their FICO score after Feb. 13, 2009 (tomorrow). How can Experian get away with this? Doesn't this violate the Fair Credit Reporting Act?

Key Credit Score to Be Hidden From Consumers

Q: Is there any way I can get my FICO score that’s based on Experian’s data?

After Feb. 13, no.

Q: What will I be getting when I go to MyFICO.com?

Fair Isaac says it will continue to sell scores at MyFICO.com based on data from Equifax and TransUnion. Its FICO Credit Complete, which offers FICO scores based on data from each of the three bureaus for $47.85 ($42.84 with annual renewal), will no longer be available, however. Fair Isaac may start offering new packages, but pricing for individual scores won’t change, says Craig Watts, a spokesman for Fair Isaac.

Spokesmen for Equifax and TransUnion say neither bureau has plans to follow in Experian’s footsteps.

Q: Will this affect my ability to secure new credit?

Possibly. While you won’t be able to see the FICO score that uses Experian’s data, lenders can still pull it -- and so may make a decision based on information you can’t see. Basically, there is no way to be certain that you know which data the lender is basing its decision on. Henson says the scores consumers see, even at MyFICO.com, are educational ones. “They are not necessarily by any means the scores lenders are using,” she says.

MORE AT LINK: http://www.smartmoney.com/spending/deals/key-credit-score-to-be-hidden-from-consumers/

[myrna minx]

96. That's outrageous. n/t

[Muttocracy]

98. I've only gotten my credit score (not report but score) when paying for it

:shrug:

[Imalittleteapot]

99. Cap interest and change usury laws.

The usury laws of South Dakota and New Jersey, where the credit card companies are registered, are fine for South Dakota and New Jersey, if that's what they want. Those card holder destroying usury laws should not apply to card holders in other states. So, citizens of SD and NJ, start making some noise and get those destructive laws abolished. Meanwhile, everyone should contact their congress persons - tell 'em to cap the interest rates, regulate the credit card industry and make it illegal to export usury laws from 2 states to the rest of us.

[DCKit]

104. Don't forget Delaware!!! n/t

[RUMMYisFROSTED]

102. Prime+ 3 or 4

[McCamy Taylor]

105. And in further breaking news, water is wet and the sky is blue.

Interest rates are zero and yet these guys are charging---what? 20%?

[Generator]

106. Late fees are a crime

They are really poor fees. It's not about you forgetting to pay your bill, it's about not having the money to pay. OOPS no money to pay one month, and the next, let's charge you $30 AND add that to your balance, charge interest on that and that will solve your problem! FEES are a scam. But fees on people that can't pay are really a scam.

If a bank charges ATM fees you can do some work and not get your money from the ATM. But if you can't pay your credit card bill-being charged for that is in essence, a poor fee.

As far as interest rates-another poor scam fee! If the person isn't credit worthy-no job-don't give them a credit card! I know some rates are beginning to start a credit history-but still. If they only make $20K a year don't give them $10K in credit cards. I know they give you $50 K sometimes. That is insane. Don't charge the highest rates on the poorest people-that is a poor fee. If the person is shown to not make their payments-shut it down, don't raise the interest rate! All that does is let the bank charge off a higher balance-it doesn't get it paid. Though I do believe the bank get's a write off for that.

I don't know but anything over 15% interest is really a scam. They should be topped at that or at the most 19%. It's just that simple. That's what regulation is. No you can't give credit to anyone and no you can't charge the poorest the most. Yes those that pay well can be rewareded. But not off the backs of the poorest. Imagine a simple system that made sense.

[DollyM]

107. That's for sure!

Our Citi bank Master card went from 9 to 14 percent interest even though we had never been late, missed a payment or went over our limit. I ticked me off but what do we do? I think it is wrong that they made the whole balance go to 14 percent, if anything it should have just been on new purchases. I have put a lot on this card, since we had a great interest rate, and used it to finance our business purchases over the years. Now we are struggling just to make the payments every month with the jump in interest and payment requirements.

[Tab]

108. ya think?

I always wondered what happened to the usury laws.

[Lithos]

110. In the religion of Republicanism

They are a virtue, not a vice. Also up is down, evil is good, etc.

L-

[SOS]

115. States still have them

But the Marquette Supreme Court decision of 1978 allows banks to charge interest based on their state of incorporation rather than where the customer lives.
That's why all national banks are incorporated in Delaware and South Dakota...no usury laws!

If I lent you money at 20% in NY state I could be arrested and imprisoned fro loan sharking. But the cc companies can charge 29% because they are incorporated in Sioux City SD.
It's insane.

Here in NYC, the City Council has started to fight back.
Resolution 1812:

"Resolved, That the Council of the City of New York calls upon the City of New York to divest its assets from financial institutions that evade New York State’s usury law."


http://webdocs.nyccouncil.info/textfiles/Res%201812-2009.htm?CFID=30514&CFTOKEN=78968917

[DJ13]

109. This propsed legislation DOESNT GO FAR ENOUGH

Theres no usury provisions outside of "on existing balances".

None, nada, zero.

Theres no specific rate caps.

This needs more work.

[harpboy_ak]

113. Dodd is partly to blame for high rates!

Dodd was part of the problem! He never tried to stop the deregulation of the industry during his entire tenure on the Banking Committee, never tried to regulate the rates and practices. Now he's all upset? What a hypocrite!

[keepCAblue]

118. My wife and I just got our notices today from Capitol One

My same-sex wife and I both have Cap.One VISA cards -- both of us have had them for years with good history of on-time payments, etc. Today, we both received notices the terms of our accounts are changing -- both our interest rates are going up 5%! For no F*CKING reason.

Yes, the CC companies are most certainly gouging us consumers. I'm cancelling my card ASAP. Mother f*ckers.