Credit Card Companies Commence The Big Squeeze

[rman]

The Setup

Monthly payments used to be 5% of the debt balance. It was lowered to 2% to make it more attractive for consumers to use credit cards.
More then 100 million Americans have a credit card debt and use credit cards "to make ends meet". The average US family has 8 credit cards and $8000 debt.

source:
PBS Frontline: Secret history of the credit card
November 23, 2004
http://www.pbs.org/wgbh/pages/frontline/shows/credit/


Making Sure They Can't Escape

"The House of Representatives approves an overhaul of the nation's bankruptcy laws Wednesday, in a vote of 302 to 126.
The bill, which passed in the Senate last month, will make it more difficult to get rid of debts by filing for bankruptcy, forcing tens of thousand of people to work out repayment plans instead.
President Bush is expected to sign the bill, which opponents say will hurt the economically vulnerable."

source:
NPR
Congress Overhauls Bankruptcy Laws
by Brian Naylor
April 14, 2005
http://www.npr.org/templates/story/story.php?storyId=4600645


The Squeeze

"Within the next month, Bank of America, MBNA and Citigroup will raise minimum monthly payments on their cards from 2 percent of the balance to up to 4 percent, not including interest. Other card issuers are expected to make similar changes by the end of the year."

"On the good side of that, they will get out of debt faster, but on the down side, it's gonna be a squeeze."

source:
Yahoo News
New Credit Card Payment Requirements Bring Good, Bad News
July 18, 2005
http://news.yahoo.com/news?tmpl=story&cid=401&e=2&u=/wyff/20050718/lo_wyff/2831815


I'd think many of those millions who use credit cards "to make ends meet" do financially live on a very sharp edge, and doubling minimum monthly payments will hurt these people badly. Many might have to file for bankruptcy, meaning they will have to "work out repayment plans", which might not be easy given the situation with unemployment and the weak economy. It's gonna be a squeeze alright.

I don't want to be overly pessimistic and alarmist, but i foresee prison time, labor camps even. These people are in a situation were they themselves can't pay their debts, but according to the law they must. I'm affraid the government will somehow step in to 'help these people help themselves'...

[wli]

1. welcome to Amerikkka

The prison camps are already built. c.f. Pier 57 and the other mini-Guantanamos around WTO protests. They're everywhere, but only announced where the protests have already happened and they've already been used. Read the protest sites. They all describe the detention camps as "impossibly huge" and far larger than required to detain all the protesters.

[Systematic Chaos]

2. Yippee!!

I owe a substantial amount of money and have no way in hell to do anything about it. Even the costs of preparing and filing for bankruptcy of any kind are prohibitive to me at this point.

So, I guess what I'm trying to say is that they can all suck my balls. :shrug:

[Hubert Flottz]

3. Paid Off and Cut up, long ago!

I get ten offers a week though and they go straight in the trash! If I can't afford to pay for it I forgetaboutit. I do without a few things, but I feel a lot better about what I buy. I was a victim too, for a lifetime, but never again.

[nwliberalkiwi]

4. Return to Sender

Take the time to put return to sender---give them back their crap!!!

[Name removed]

8. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Hubert Flottz]

11. You are in trouble, just like I was.

I made it my prime objective for several years, but I wasn't living the high life, by a long shot. I know exactly how tough it is, but it can be done. It isn't just you it's half the people in this country that are being ripped off. Usury is like quick sand. The first thing I did was stop using the card for Anything. Then every chance I could, I sent extra payments. I did without things I'd liked to have had, and over several years time, I was finally able to get out from under the thumb of the people who owned me.

[Name removed]

12. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Hubert Flottz]

14. "it is amazing that the government can't step in "

The government just does things that benefit the banks and corporations, who finance the campaigns and the free rides. You and I are just their beasts of burden. It's the "ownership" thing that Bush was talking about when he ran in 04. The more you owe them, the more they own you.

I did the balance transfer thing several times and it helped me. It's works if you owe several card balances, because it lets you narrow it down to fewer and fewer companies that you are paying interest to on the money you owe. Always read and understand the fine print on any loan or balance transfer. And watch out for the 6 months same as cash deals and scams at places like B?$t Buy too.

No pain no gain though, so if you haven't already, try and start paying in cash, or doing without some of the things that you can live without. It's a slow painful process, but it can be done.

Best of luck to you and welcome to DU...

[leveymg]

5. They want your house on the market. This is their way of addressing

the residential real estate bubble - forcing millions of high debt families out of single-family homes and into rental group homes that have been bought up in lower-middle class neighborhoods by real estate investment trusts.

It's a business model that's being pushed by among other outlets, The Wall Street Journal.

You've gotta love these guys. They keep their bases covered.

[spooked]

10. Exactly right!! Read Frontline's eye-opening piece on Credit Cards

http://www.pbs.org/wgbh/pages/frontline/shows/credit/more/cement.html
SECRET HISTORY OF THE CREDIT CARD


Scroll down to:

The Brave New (Unregulated) World

In the new world of unregulated lending, families are barraged with advertisements and offers for a new product: all the debt they could ever want, and more. Now, in a single year, more than five billion pre-approved credit card offers -- totaling over $350,000 of credit per family -- pour into mailboxes all across America. Magazine ads, telephone calls during dinner, and flyers at the bottom of grocery store bags barrage families with even more offers of credit, while roving bands of credit card marketers haunt college campuses and shopping malls. Credit card debt has increased accordingly: from less than $10 billion in 1968 (inflation adjusted) to more than $600 billion in 2000, an increase of more than 6,000 percent. It would seem that once Americans got a first bite of the debt apple, they just couldn't get enough...

In many cases, these lenders don't just want families' money; they also want to take people's homes. Banks have been caught deliberately issuing mortgages to families that could not afford them, with the ultimate aim of foreclosing on these homes. This practice is so common it has its own name in the industry: "Loan to Own." These lenders have found that foreclosing can be more profitable than just simply collecting a mortgage payment every month, because the property can then be resold for more than the outstanding loan amount. So the lender rakes in fees at closing and high monthly payments for a few years, then waits for the family to fall behind and sweeps in to take the property. The lender wins every possible way -- high profits if the family manages to make all its payments, and higher profits if the family does not.

The results are in. After two decades of mortgage deregulation, today's homeowners are three and a half times more likely to lose their homes to foreclosure than their counterparts a generation ago. This defies the economists' expectations. Today's record low interest rates and rising home prices should have translated into a falling rate of home foreclosure, not a rising one. The only explanation is a lending industry run amok. The rise in "loan-to-own" lending, the disappearance of the down payment, and the explosion in high-interest, subprime refinances have taken their toll, as a growing number of families learn the painful consequences of getting trapped by a mortgage industry that has been allowed to make up its own rules.



I remember frequently getting calls for credit cards during the years when I stayed home with our young children, and we were on a tight budget. They wanted to send them to me, even when I told them I didn't have a job! I realized, suddenly, OMG, THEY WANT OUR HOUSE!!!

[Starfury]

6. Gee, we never saw this one coming, did we? n/t

[Hubert Flottz]

7. Smarter men than Bush have said...

"I believe that banking institutions are more dangerous to our liberties than standing armies." - Thomas Jefferson.

"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance." - President James Madison

"I have two great enemies, the southern army in front of me and the financial institutions, in the rear. Of the two, the one in the rear is the greatest enemy..... I see in the future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of the war." - Abraham Lincoln

"If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." -Thomas Jefferson, The Debate Over The Recharter Of The Bank Bill, (1809). This prophesy has come true.

http://www.seek2know.net/money.html

Today these people would be called, "Conspiracy Nuts"...Instead of great statesmen.

[rman]

13. "Banking was conceived in iniquity, and was born in sin"

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight-of-hand that was ever invented. Banking was conceived in iniquity, and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits and with the flick of the pen, they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But if you wish to remain the slaves of Bankers, and pay the cost of your own slavery, let them continue to create deposits."
- President of The Bank of England Sir Josiah Stamp, University of Texas, 1920

[Hubert Flottz]

15. The Federal Reserve Act

Congressman Charles A. Lindbergh;

"This Act establishes the most gigantic trust on earth. When the President signs this bill, the invisible government by the Monetary Power will be legalized. The people may not know it immediately, but the day of reckoning is only a few years removed. The trusts will soon realize that they have gone too far even for their own good. The people must make a declaration of independence to relieve themselves from the Monetary Power. This they will be able to do by taking control of Congress. Wall Streeters could not cheat us if you Senators and Representatives did not make a humbug of Congress. . . . If we had a people's Congress, there would be stability.

The greatest crime of Congress is its currency system. The worst legislative crime of the ages is perpetrated by this banking bill. The caucus and the party bosses have again operated and prevented the people from getting the benefit of their own government."

http://www.modernhistoryproject.org/mhp/ArticleDisplay.php?Article=SecretsCh03#Warburg

Paul Warburg;

"I am a member of the banking house of Kuhn, Loeb Company. I came over to this country in 1902, having been born and educated in the banking business in Hamburg, Germany, and studied banking in London and Paris, and have gone all around the world. In the Panic of 1907, the first suggestion I made was 'Let us get a national clearing house.' The Aldrich Plan contains some things which are simply fundamental rules of banking. Your aim in this plan (the Owen-Glass bill) must be the same -- centralizing of reserves, mobilizing commercial credit, and getting an elastic note issue."

http://www.modernhistoryproject.org/mhp/ArticleDisplay.php?Article=SecretsCh03#Warburg

The story of the Warburgs and the FED leads right to where we find ourselves today. The Warburgs bank, the "United Bank Of Switzerland" or UBS Warburg owns Enron now. The Warburgs had a hand in the rise of Hitler and no doubt, their offspring are big partners in the "New World Order". If you haven't read up on the Warburg brothers and Fritz Thyssen you should do so. They have everything to do with the way the world is still being run today, by the super bankers.

[Deja Q]

9. Peak oil and greed. Let's hope the economic crash happens before October.

There IS no escape.

Economic disintegration merely resets the playing field back to 0.