Come down hard on credit card companies

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I'd hate to have so many credit cards it's as if your desperate for money and credit. The card is a mini loan, look at a credit card comparison and they are all just about the same as loan agreements. Why would anyone want to take on so many and chance falling behind on their payments. I have 2 credit cards that i hardly use. I used my debit card most often knowing there isn't any interest to pay.

Keith,

Credit Cards Offers

Banks have tightened their credit standards to prevent bankruptcy, just like what happened to the Lehman Brothers Corporation. Obama is really trying his best to protect the consumers. He had seen their struggles in paying for sky-high interests from their loans. payday loan info

When I charged the items I knew I would have to pay them off. And I plan on keeping my commitment. My issue is that I was one of the lucky ones that read the small note on my bill that if I did not opt out, and close my account, they would raise my rates to 30.99%. I opted out and continued to pay my bill. 3 months later I had another small note that stated I had to opt out again. When I called Bank of America they told me they were leveling everyone's interest rate, over 50 million people, but could not guarantee that I would not have to opt out again and again and again. I should not have to keep my guard up on a closed account after I accepted their first offer to opt out and close my account.

Just a wee bit unfair!
"In the meantime, credit card issuers have raised rates and fees on millions of consumers as they grapple with ballooning loan losses. From March 2007 through February 2008 alone, about 70 million credit card accounts — nearly one in four accounts — had their interest rates raised, costing consumers at least $10 billion in additional finance charges, estimates Pew Charitable Trusts, a public policy group."

Reuters: Its coming, CC's just stalled it -
"A handful of bills that seek to clamp down on credit card practices are currently pending in the House and Senate. The Federal Reserve has issued a rule that would restrict issuers' ability to raise the interest rate on existing debt, among other measures, but the rule has been widely criticized because it doesn't take effect until July 2010.

FIND MORE STORIES IN: Congress | White House | United States Senate | Federal Reserve | Charles Schumer | Georgetown University | Treasury Secretary Timothy Geithner | Lawrence Summers | Chris Dodd | Valerie Jarrett | Pew Charitable Trusts | Whac-A-Mole
In the meantime, credit card issuers have raised rates and fees on millions of consumers as they grapple with ballooning loan losses. From March 2007 through February 2008 alone, about 70 million credit card accounts — nearly one in four accounts — had their interest rates raised, costing consumers at least $10 billion in additional finance charges, estimates Pew Charitable Trusts, a public policy group.

After all this, I do agree that the credit cards have been extremely irresponsible/evil in their lending practices. I fell for it a few years ago when I paying off all our debt. I surfed a card balance to a zero % interest card. I setup a recurring payment in my online banking. Yep, you guessed it, they changed the due date back a couple days and before I knew it, my zero % interest became 31% over the course of a couple of months because I was late. This angered me to no end. However, I understand that I signed up for it and am ultimately responsible for the consequences. This is one reason I don't use the stupid things.

You said you can get by w/o a CC. Sure, rent a car or get a cell phone w/o one.
Then how do you know which CC might rape you at which time??

If you do not like the terms of the credit card, you agreed when you opened the account. If you didn't like it you didn't have to open the account. You should never sign anything without reading it in full, no matter how long, and how fine the print. It's your own fault, and yes people DO live without credit cards. Quit trying to blame everyone else for your lack of responsibility and carelessness.

I find it interesting to see people complaining bitterly about an industry that they have CHOSEN to do business with. It's really a simple solution. Just don't use their product. No one NEEDS credit. That is a myth. What good is a credit score other than to go into debt? Pay cash for your car and other goods. Find a mortgage company that does manual underwriting (I did) and you will get a mortgage, assuming a good down payment. This is the way people lived for years before banks came along and started heavily marketing their most profitable product: debt.

RC

1) The US is a debt society.
We must borrow money to support ourselves.
This includes buying a house.
This includes buying a car.

2) To gain enough credit to buy a house and a car, our current structure requires a unsecured loan of some sort to prove our ability to pay.

3) The majority of unregulated credit card transactions are needed to build credit to buy the house or the car.

4) Credit Companies are taking a risk to provide these services to unproven people. They have no direct interaction with these people but instead use compiled data from reporting bureaus to review your ability to pay. They do not assess your income level in any significant way prior to activation of your card, nor your ability to pay back this loan. They do not care because they are not REQUIRED to do so. A credit card company that does this should be initially charging 29% to the new customer, not 0% to get them in the door. That way instead of creating demand (0%), they are limiting demand (29%) from risky clients. They choose not to, accepting the risk the client may not pay, for the significant financial benefit and growth that comes from generating greater demand. This is the credit card companies responsibility; NOT MINE.

I had my interest raised recently as well. They didn't provide an explanation or review and even if they did, what right do they have to assess my ability to pay after they start the loan. (Its like a restart button for a video game or something)

They took the risk already. Once they did that, it is their problem.

Businesses and Entrepreneur's are the risk takers in our society, yet somehow Credit card companies and lenders have found a way to convince a large portion of people, that this risk shouldn't be on them, but on the person asking for the unsecured loan.

How does this make sense?

Lenders (banks or credit cards) need to make sure the person they loan to can pay their debt. PERIOD.

Otherwise the lenders can say they have no responsibility in this problem --- which is exactly what they are saying right now and exactly why we are bailing them out.

I do not understand how it is the credit companies fault that someone runs up a balance they can't afford to pay and then has trouble paying it. The CC company has no collateral from which to secure their credit outlay to you. So they do what is within their rights and rais interest rates to protect themselves.

The argument that it is their fault that credit is so easy to get is about as logical as saying that drug addicts shouldn't be blamed because drugs are so easy to get....YOU do not HAVE to 1) apply for 2) accept or 3) USE credit cards. That is your choice.

Much like the bastardization of welfare, social security, etc. The idea behind credit cards was not to live off them. The idea is to delay paying for an item TEMPORARILY. The object is to not live off credit, finance your house, or hold balances for imperpetuity. You do not have to use them or keep them.

The only thing I think may need some tightening. Is the fact that if I have a $10,000 limit and I buy a $2000 couch and suddenly the credit card company lowers my limit to $2000...that makes me look as if I have a maxed out card.

As far as legal not being right...why is that argument allowed for this but when someone says that the top 50% of income earners in this country pay 97% of the federal income taxes is legal yet not right...they are right wing whacko lunatics.

I think you will see the number of credit card issued decline with the amount of credit granted by these companies. We should also see a trend towards "secured" credit, ie. granting personal guarantees backed by other assets in order to use credit cards.

This means most people will have to go to a pure cash basis maybe using debit cards. Credit will be available to only those who can show their credit worthieness, ie, wealth. Everyone else will not get a card.

This is from the party and administration for the little people who are getting the shaft. And you cannot blame this one on Bush...

Do not spend money you do not have. Unless it's a literal matter of life and death, if you can't pay for it, in full as soon as the bill comes, DON'T BUY IT. If you need a loan for something, get a fixed rate loan from the bank, if you don't qualify, well you may have to wait for whatever it is and make do with what you have. It's not that hard. You won't die if you don't get to go out to eat every day, your kid won't die if they don't get the newest whatever it is this week, and you CAN live without cable tv and cell phones. You are the ones who ran up the big bills, don't ask those of us who have been responsible to pay for your spending more than you have on a bunch of luxeries you don't need.

Jojo2

Read your credit card statements carefully...
Here's my recent experience. Five months ago Citibank raised my interest rate from 6.6 to 14.5%. I didn't pay much attention at first, but decided to look back at my statements to find out if there was a reason why. I noted that it said that interest was being raised because of a "late" payment. I checked the Card site on the computer and noted that it said my payment that month had been made on time (under "scheduled payments), but it was not actually "posted" to my account for 8 days!

I called the CC company and asked why, and they said my bank didn't release the funds until 8 days after I made the payment. So I called my bank, and they sent me a report showing that the CC company had not REQUESTED the money until 8 days after I made my payment.

I called the CC company back and told them I had a report in hand showing that they had screwed up and that they had overcharged me interest for 5 months! I wanted the late fee credited back and all of the interest they had charged my account, AND I wanted my old interest rate back! Over $300 was returned!

I got it all, including my old interest rate....but it took some leg work to run everything down. This may have been an honest mistake, but we must do due dilligence in order to keep our accounts in line. I check my acccounts regularly to stay on top of payment dates and interest rates,and they are ALWAYS paid on time, even if I have to put off insurance premiums or utilities until later to do that.

I recently recieved notice that BOM was raising my interest rate as well, and decided to take them up on their offer to reject the raise. I know that means the account will close when the balance is paid off, but one less account to mess with will be a blessing.

WE are borrowing THEIR money, and lets face it, we are a slave to every card until we don't owe them another dime. Like every "master", we are subject to the laws they lay down. Everything they do is spelled out in those endless, boring little pamphlets they send out, and in the small print on the applications and on the statements. Our responsibility is to read it, and know what we are getting into,
like it or not...

Unfortunately, the higher interest rates are the result of both irresponsible people who don't pay their bills, AND the financial situation in our country that has left many without enought money to cover their obligations. Either way, we all pay.

I started a business card with a well known company about two years ago. It had a $25000 limit. My purchases never went over $4000. Last year I took a cash advance of $10000 to asphalt my driveway. It was 4.99% for one year and then it would go up to 21.99% My minimum payment is $125. I pay no less than three hundred dollars (sometimes $1000) EVERY month ON TIME NEVER LATE!!I requested the extra to be applied towards the $10000. They told me the payment would ALWAYS go to the higher interest balance. About two weeks ago I received a new "contract" that said my regular interest rate would go up by 5% and that my cash advance rate would go up to 29%. YOU tell me what's RIGHT about THAT???? I made these purchases under one agreement and by whimsy the can just change the agreement on past purchases!! If they notified you that FUTURE purchases would be at a higher rate FINE! I would be able to make an informed decision. This is sheer larceny!! It is NOT defensible!! I have now frozen that account at the current rate. I had two weeks to do so. If I so much as make an inquiry about my account it will reactivate it at the higher rate. This is WRONG! WRONG! WRONG! Not to mention the trouble I have had to go to to change all of my business accounts to a new card. As far as easy credit, I receive 15 to twenty offers every week which I shred. Some one younger or more desperate may take them up on these offers, putting themselves in a hopeless situation, not to mention the ease with which a criminal can steal your identity by these same offers. I say that a person should have to CONTACT the COMPANY and REQUEST the information and application. Then the Credit card company should have to verify that the person is indeed real and that they are worthy of credit. There definitely should be a cap on how high they can raise your rates in line with the economy and NEVER on past balances unless the borrower is seriously past due (60 days or more) lmaxfield

That's what they are pure and simple. They are not a service industry, they are the black sheep of the banking family. They open cards over the phone with low introductory offers and you inch your debt up with a little higher limit and little by little you get so far in debt you can't pay off the balance each month and get stuck in a monthly payment rut. We have all been there. I personally got sick of them and just paid off my final credit card. I will keep one just in case but it will be hidden away in a drawer and not accessable for common purchases. I'm not sure what their usefulness is in my life anymore and I can't define just in case so maybe there is none. I have not used one in over a year and don't miss it. I use a debit card and only spend what I have. I have never felt more security or as secure as you can feel in these economic times. If I lose my job I will promptly tear up the card and cancel it so I won't be tempted to lean on it. That is a mistake.

I got my tax return this year. I used around half of the money to pay down credit card debt, which enabled me to free up enough money in my budget to purchase a vehicle. My statement just came in from one of the credit card companies. They reduced my credit limit by the amount of the large payment I made to them. It was on a card that was near its limit so I paid $800 on the card to reduce the balance owed. This should have brought a balance of $4800 out of $5000 down to $4000 out of $5000 available, thus giving me a safe margin to avoid over limit fees etc. They reduced my credit limit to $4200 on the next statement (thus keeping me with in a few hundred dollars of maxing out the card) and gave me a lame justification of having "reviewed" my account based on equifax data. I do not believe this is a coincidence. I had the card paid off last year and have always made my payments on time. I believe they intentionally lowered my limit by the amount paid in order to keep me closer to the limit, hoping that I will go over the now lowered limit. They would not raise the account with out doing another review which would hit my credit report again, thus discouraging me from the process which would take much longer than their review to decrease my limit. I paid down this card to prevent this scenario, and their predatory business practices work to undermine my good faith efforts as a customer of theirs, and an american consumer. The first item I will fix myself ASAP, the second item applies to how these banks are treating all americans who now have a stake in savings their institutions and are still being abused and penalized by predatory/bad practices. Why should they be able to borrow tax dollars at low/no interest rates and turn around and still charge rates up to 35% (at least that was my highest rate)? Why not mandate an interest rate cap on these banks to protect or help middle class america? If I had known they would do this I would have been able to apply that money more wisely. But they do not divulge when such reviews are being conducted prior to their determinations. BTW- They also sent me new cards due to a security breach...

Credit Card companies are in business to make money. If one reads their fine print, there should be no surprises. If one does not understand what they are reading, maybe they should not do business with that card co. Note the phrase "doing business". You are doing business by buying their money and on their terms that we agree too. No one feels sorry for the credit card companies that lose billions in bad debt due to people who have no self control and spend unwisely. Unfortunately, we are paying for these people who seek the easy way out. We pay for these losses, with the added fees and rate increases. Many of us who lost their jobs use credit cards to pay bills untill the credit line runs out. Yes, it seems unfair but maybe we should have saved for the possibility of no income. Credit is not a right but a priviledge and it is our responsibility not the credit card companies to use it wisely.

1. credit card companies do not obligate anyone to borrow from them. they follow the same protocol loan sharks do. you borrow from them and pay interest on what you borrow. they are right and have the right to have their money paid back to them. some credit card companies will waive fees or negotiate a pay back for less than what you owe. from what i have experienced being in debt at one time is that they are willing to work with you. however, i do agree that the interest rates have ballooned to rates that are unreasonable. however, sh!t falls downhill so to keep abreast of a falling economy, credit card companies do what others have taught them to do.
2. those that borrow must pay back what they borrow. i agree that there are some that borrowed to try to keep surviving in this economy. some have been compelled to work another job (if there is one) or collect cans in the street to make extra money. however, the fact is that whether they come off greedy or heartless loan sharks - money that is borrowed should be paid back.
3. this country has gone through alot. and it is ashame that i am seeing so much abrasive feeling towards one another. all i have been reading in the news is about how bad the economy is and how jobs are being lost and how corruption and greed in corporations has taken our economy down even further than where we were since 911. With all of that corruption and greed that is going on, credit card companies just follow the leader. and yes, those that borrow from them pay the price.

i have no more credit cards because i would rather starve or lose what i own than pay a loan shark.

through disagreements we learn from the outcome, whether the final decision we make was a mistake or not.

Let me start by describing a situation. My wife has a "Discover" credit card that she's had for almost 10 years. She used to use it all the time and then pay it back as quick as possible. Discover, as you know offers "cash back" on your purchases.

3 years ago we needed to use the card for a large emergency and also experienced a reduction in our income. because of that we were unable to pay it down as quickly as we would like but maintained a good payment history. We were late by 2 days 18 months ago. At the time they said it was no problem since we had such a great record.

Here is the issue (and the one Obama is addressing). About 6 months ago, the credit card company decided to arbitrarily increase the interest rate to it's maximum interest rate stating that "it has recently reviewed our profile and has adjusted our rate based on our credit performance and history with discover". If we didn't agree we can close our account and pay the balance. We protested and of course they sited the credit contract in which they reserve the right to do that. We went from a 14% to 26% interest rate.

About 2 months ago they sent us a revised contract and then increased our rate again to 29%. This is after we paid a large portion of our remaining balance.

Now if you see where we are wrong and deserve to be punished with a giant interest rate then you go ahead and POST HERE! Give me a logical reason. I also know a little about contract law and in most states you can not change the terms of a contract once it is agreed to. Only credit cards do that.

Just pay off one card with another. Then you won't have to actually give up any of your money. Then, when you are in over your head just get a bailout from the Fed. It seems to work for the banks.

llflawedll

read what I wrote again....i agree some of it is a rant on the messiah, but most is completely on point with this topic. As for the China reference, that is also on point with this topic, where do you think most of the worlds money comes from these days?

I can't believe there's still a bunch of people who think companies can do no wrong. I had 2 credit cards through Wamu, one personal and one business. They tried to increase my interest rate on the personal account- by putting a small notice on the back of the last page of my bill- which I normally don't read because I pay online. I just happened to catch it, so I was able to close the account and keep my current rate. Not only did they try and sneak in the rate increase, but they did it after I had been a customer for over a year during which time I paid early or on time every time- and my credit score increased by 25 points.

Now Chase took over their accounts. I didn't receive a bill this month, so a couple days before it should have been due, I logged in to go ahead and make a payment. That's when I found out they moved my due date back 5 days from last month, so I was a day or two late. $39 late fee, and they refuse to do anything about it. I've never been late before, they moved back the due date almost a week, and didn't send me a bill. Think about how much money that generated for them if they did that to just 1% of their customers.

Yes, there are those who abuse credit cards, but to blame everything in every case on the consumer and never hold the companies accountable for anything... well, it seems to me that's a big part of how we got into this mess we're in now.

Submitted by jenniferm on April 23, 2009 - 7:58am.
You state:
"I will guarantee every fee and interest rate is within the laws of those states the cards are drawn from. Late fees up to a certain limit? Legal. Different interest rates on merchant transactions vs cash advances? Legal."

The only reason CC's are legal and can do what they di is because they get to bypass State usuary laws b/e they (lucky for them) get to be considered Interestate Commerce and thus only subject to the Controller of the Currency (Lapdog of the industry - check how few complaints they ever do anything on/ well known); or they have to comply with their incorporation State - which is why you can get major charge cards from far off from NYC places like North or South Dakota where those States have lose usuary rate policies to try and lure in CC jobs.

I could list a littany of CC abuses..., but will just pass along this in remaining space:
"Credit card insiders tell of deceptive practices
By Pedro Nicolaci da CostaThu Sep 25, 4:39 PM ET
Two former employees of credit card issuer MBNA, now owned by Bank of America, said on Wednesday they were forced to use aggressive and deceptive practices with customers in order to boost revenues.
Cate Colombo, from Maine, said she signed up for a customer service job but was instead instructed to make insistent sales pitches aimed at getting MBNA customers deeper into debt.
"I was hired to sell money," she said on a conference call organized by Americans for Fairness in Lending, an advocacy group. "We had a goal of selling $25,000 an hour, $4 million per month. And I was one employee among hundreds, just at this one site."
To meet these goals, Colombo said she was told to turn every regular call from a customer into a sales call. She would do this by running the customer's name through the computer and finding out every possible line of credit they had ever obtained through MBNA...."

Here is an example. Chase bought out WAMU. They then raised the rate from something tolerable to 23.99%. This means that my increased minimum payment due was more than 75% interest paid every month. Since the minimum payment due was so large, I could see a never ending relationship in my future. I decided to get a personal loan from my bank to pay it off, and closed the account. Not everyone is so fortunate, and they are put over this barrel with no hope in sight.

Uncontrolled, greed rules the day apparently, and not just in stocks, etc.

If you have a problem with the credit card companies and the interest rates they charge, stop borrowing their money, then they can't charge you anything.

The problem with this whole country is the bleeding heart liberals who forget that this country was founded and built on the free enterprise principles. No one is holding a gun to anyones head saying you have to get a credit card and charge things on it. Credit Card Companies are a Capitalist Business. They are not a public organization set up and funded by the government. They operate to the letter of the law, do they charge the maximum interest rates if your payment is 5 seconds late? YES! Why? Because they are allowed to by law, and they are making a profit off of you. That is what businesses do. You don't like it? Don't get a credit card and buy things you can't afford. As for the bleeding hearts who are ranting on here about how these poor people need to use the credit cards to pay their bills because they don't have enough money.....PLEASE!! Have we as a nation become so bad at fiscal responsibility that we are now claiming we are entitled to free money from a private company? Isnt it bad enough we are asking for free everything from the government?

I am rapidly becoming not proud to be an American, and I fought for this country in the service. I can't stand the attitude of the general populous, and I want Brobama out of the minutia of my daily life. This country is sinking further and further because of his socialistic tendencies and his policy in private business.

Has anyone stopped to think what is going to happen to this country if we keep spending the way we are? Does anyone remember the fall of the USSR? If the Chinese decide they don't want to buy our bonds any longer you can kiss life as you know it goodbye and head for the soup line.