anyone here at DU stuck with rip-off 28+% revolving CC debt??

[trekbiker]

or worse yet, stuck with those insane payday loans? You may want to investigate Prosper.Com. It's an innovative new San Francisco based internet loan business. The business model is P2P (person to person) lending. The loans are unsecured personal loans up to $25,000 maximum with a fixed interest rate and a 3 year term (no revolving debt). The borrowers submit thier credit information and pitch thier story to the "Lenders". The stories are typically credit card consolidation but run the gamut from small business startups to medical bill help... just about anything. The Borrower states the amount he/she wishes to borrow and the maximum interest rate they are willing to pay. The Lenders then bid on the loan in small amounts starting at $50. If the loan is fully funded by the end of the bidding period (up to 9 or 10 days) Prosper funds the loan and then sells the loan to the Lenders (who are actually loan purchasers). A successful loan can have several hundred Lenders collaborating to fund it. This also protects the Lenders by allowing them to diversify over a large number of loans in small individual amounts.

From what I've learned so far (as a Lender) the interest rates that typical successful borrowers are getting are less than the loans (CC,etc) they are trying to consolidate (actually too low for an unsecured loan to complete strangers!!). Good for the borrowers, jury is still out on whether this is a good investment vehicle for the Lenders (IMHO).

Prosper is only one year old but has huge potential. Personally, I would love to see them take a bite out of those predatory PayDay outfits..

[jaksavage]

1. Crodit cards

An electronic form of slavery.

[Buzz Clik]

2. I got a Capital One credit card years ago -- 8% interest. And then...

I went merrily along not paying much attention, balance going up and down, pay it off, build it up, pay it off. Six months ago, I actually took the time to examine the billing info -- 29% interest!

I paid it off and canceled the card. But NO! Cap One had put on a $170 charge for some damned service I never requested and never used. "We won't cancel your card until you have stopped putting charges on it for 30 days." Bastards. We removed the charge (didn't pay it -- had it surgical removed), but it took Cap One 2 weeks to remove it -- and guess what? They charged us a late fee and still refused to cancel the card because we still had charges on the card.

If I can ever get this cycle to stop, it will be a cold day in hell when I get another Cap One card.

[sharp_stick]

3. 29% - My God thats loan sharking isn't it?

Did you miss a payment or two? Even if you miss a payment on your Home Depot card or something they will screw you with the "default" rate on every card you own. I hate those thieving bastards and do everything I can to pay them off at the end of every month.

The thing that really pisses me off is that they've got you coming and going. If you don't have credit cards your credit rating sucks and you can't get a car loan or a mortgage, even if you have a couple of credit cards they want you to keep a small revolving balance to "improve your credit rating", never mind improve the bottom line of the scumbags.

[question everything]

22. You really cannot cancel a card until all charges

have been paid. But put it in a drawer and don't use it. Keep paying it, more than the minimum, if you can. Pay it as soon as you get the statement - this will lower the finance charges.

See if you can get another card with a lower rate to pay this one off.

[GreenZoneLT]

26. Yeah, "canceling" the card looks bad on your credit statement

I had a loan guy give me the fisheye over that. I had a card with a big balance and the company unilaterally jacked up the rate, so I had to cancel it in order to stop them from modifying the terms of the agreement. Took years to pay it off, even so.

One upside of Iraq deployment is the tax-free big bux have allowed me to pay off all my debts. I don't plan to get new ones, other than to buy real estate.

[Buzz Clik]

27. That is the case. However, when the charges ALL originated from Cap One...

... it was beyond "business as usual".

[dropkickpa]

29. They did the same thing to me about

9-10 years ago. It ended up being just a hair before court when all of a sudden THEIR lawyer reviewed the recorded phone calls and found that yes, CrapOne had gone against my express wishes and signed me up for one of their bogus deals, overdrawing my account and starting a 3 year battle. 14 months of which they continued to charge me late fees and overdrawn fees, the highest balance during that time was something like $1,200 on a $200 limit card, it was my first, and last, credit card.

I finally got all the charges dropped and was only liable for the $120 from purchases I HAD made (I refused to pay anything towards it until the bogus charge and associated fees were removed). That shit is FINALLY off my credit report, but royally fucked me for the longest time, and my credit is still fucked because of the domino effect from that. If I had been a less stubborn person, I probably would have given in and just paid the damn thing, but, I am stubborn as hell and refuse to back down when I know I am in the right.

I'd rather be dragged face-down through a minefield than touch one of their cards again. Fucking shysters and con artists.

[sinkingfeeling]

4. No, the only card I have has a 3.99% until payoff of balance.

[Morgana LaFey]

5. Another option --

A little later this week DH and I are meeting with an attorney who can, he said, negotiate credit card debts down to 30 - 50% of total owed. That, of course, presumes a pay-off, which is something we're working on. But imagine suddenly owing just 50% or less of what you currently do? I have no idea of the details (what he charges, etc.), but I will later this week. Some bankruptcy attorneys can put you in touch with folks who can do this.

[Liberal In Texas]

11. It'll hurt your credit rating. --It will be in your credit report as a bad debt for 7 years.

I did this on my own with a cc company that I thought was posting unfair charges. I cancelled the card and negotiated a setttlement for less than the full balance...because of the unfair charges. For 7 years this showed up as a charge-off (as in write-off for a bad debt). Everytime I bought a car or applied for a mortgage, I had to write an explaination, even though I had letters to the 3 credit bureaus with explainations on file.

Unless you're in real dire straits, I wouldn't do it.

Credit in this country is becomming really regressive. We've got 2 cards to pay off completely, then never a balance again.

[KatyaR]

12. Everything hurts your credit rating.

I heard an ad today about how to improve your credit rating--good, sound advice, not a ripoff company. I knew that if you closed or paid off a card that that could hurt your credit, but I had no idea that when you go over 50% of your credit limit, points are deducted from your rating (and I imagine the points continue to be deducted the higher you spend).

So basically you're screwed no matter what.

[Morgana LaFey]

18. Oh, don't worry. It's dire.

Real dire. Real, real dire.

Dire.

Did I say dire?

It's dire.

[Liberal In Texas]

28. Sorry to hear that.

Perhaps if it's that bad, bankruptcy might be an option (?)
That would at least give you a clean start.
That said, I don't know how hard it is do do a bankruptcy these days with the new "improved" laws favoring the cc companies and not the consumer.

[SoCalDem]

17. Be acreful.. they amount they "write off" must be reported as INCOME to YOU

:scared:

[Morgana LaFey]

19. Well, that sucks. I definitely need to get details on that.

Thanks for the heads up.

[CTyankee]

6. I stopped paying any CC interest 15 years ago when I saw what

it was costing me in my budget. Now I never charge more than I can pay off within the grace period.

They must hate customers like me.

[Sherman A1]

9. Yes, they do hate us FreeLoaders

I do the same thing as you. I do run everything I can through my CC to run up the cash back bonus and make it a one stop payment program for me on a monthly basis. Trying to "game" their system as best as I can.

[CTyankee]

10. Hey, me too! Mine is the LL Bean card. They give me free shipping

and points toward free merchandise for stuff I charge on their VIsa. So what happens is I get free LL Bean clothes (plus the freeshipping)on some basic things I can use. I don't go crazy. It's a nice thing, but not the end all and be all.

I'm thrilled to get what I get. So it allworks out fine.

[Sherman A1]

23. I use Discover

for everything I can think of during the month. Gasoline, Groceries, Perscriptions, Phone Bill, Insurance, etc. It all adds into the cash back bonus, then I can choose several ways to use it, cash back or gift cards (I really like the book store ones and the wife likes the house hold decor store). I even use the book store gift cards for birthday and Christmas gifts on occassion. It is my little means to use their system (that did screw me in the past) against them. I know they still make money, but I feel like it is the best I can do to "help" them out. Right up their with using all those Post Paid Return envelopes to return the offers to the sender (without my name)... It helps to subsidize the Post Office in a way.

[petronius]

16. THey may not be fond of customers like us, but they still make money:

They get to charge the vendor for every transaction we make. I try not to use cards at all at independently owned, local stores, and so on. I'd avoid CCs at gas stations, but I'm too lazy to walk inside (gas franchisees get really screwed by non-oil-company CC use.)

[WI_DEM]

7. Two years ago I went on a debt management program due to high CC debt

and it is working out great--of 12 credit cards I had, 4 are now PIF, and the others have gone down significantly. I should be paid in full by December of 2008. It's a great feeling to know that I'll be debt free and I won't allow myself to get into that kind of jam again.

[SoCalDem]

8. Paid 'em all off, cut up all but one (cash back card with a 15K limit)

We LOVE being card free and pay cash happily for everything we buy (even our car in January)..

We were on the credit card merry-go-round for many years.. it's HELL..

NEVER AGAIN!!!!

[EFerrari]

13. No! And I feel FREE!

:woohoo:

[Sen. Walter Sobchak]

14. BANKRUPTCY!

I used to deal with bankruptcy matters and the biggest single mistake people made was not filing much sooner. By the time your considering payday loans or whatever this is - you need to be reaching for the parachute.

By the time you are in such a situation the only thing you should be doing is filing for bankruptcy.

Even with the new bankruptcy law and the new means test, many of those filing for bankruptcy can still avoid Chapter 13. And even then depending on circumstances many people are better off in Chapter 13 even without the full discharge.

[mountainvue]

21. Amen. File Chapter 7 if you can.

These credit card companies have become predatory lenders. Like policypunk said, pull the parachute. It's time to stop the insanity.

[bentley]

15. I'm a lender

I have been since Nov. 06 and I have 39 loans averaged out to about 12.50%. Two loans have been paid late by less then 15 days but all are current. I do try to help some people with payday loans and high rate CC, but I have pretty strict guidelines that I have set and my high risk loans are less then 25% of my portfolio. I will test it for about a year before I add any more new money, right now I re-loan my interest and principal paid back into Prosper. I hope it works, it's a great idea where the borrower and lender benefits and it cuts out the banks and CC Companies.

[Blue_Tires]

20. even worse...

i'm at 32 percent....maybe i'll look into that internet loan

[WilmywoodNCparalegal]

24. the problem with Prosper

is that the majority of states limit the interest rate that can be charged. For instance, NC NJ and NY have a 15% cap, which sucks if you have poor credit and you want to try to borrow money at a higher interest rate. Because of that, if you have poor credit your loan request may never get funded.

I was an enthusiastic Prosper member until then. If you have no chance in hell for a loan, why even try?

[GreenZoneLT]

25. Huh. A non-evil way to bundle bad debt.

You can buy securities based on bundles of high-risk personal debt, but it's from the coercive, high-interest legbreaker industry. I like the sound of this as an investment opportunity.

[LSK]

30. anyone signed up as a lender? Im considering it...