Credit Cards

creativedreams said:

I am referring to the interest rates charged on the loaned money.

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OK, thanks for explaining - however you originally asked about lowering illegal interest rates charged by loan sharks. As far as I know - illegal loan sharks are just what they are described as - "illegal" meaning they cannot be dealt with in the normal way.

The only way to deal with illegal loan sharking was for local citizens to create their own mutual societies and offer each other the chance to get loans. These groups could be supported better and then people wouldn't have to go to loan sharks or to credit companies.

Some purchases over here (in the UK) make sense when you use your credit company though - if I buy something on the internet using my credit card and the purchase falls flat or the company goes bankrupt I can get my money back from the credit company. That doesn't happen with bank cards or cash payments.

Also, there are other protections by using a credit card that buying by cash doesn't give me - if my details get compromised I get sent a new card and my credit details are changed immediately. That doesn't happen in the UK with cash or bank card purchases, if my bank details get compromised I have 2-3 months of hassle and delayed cash liquidity that just isn't worth it.

American said:

You expect what never has and never will be. I'm far too old to expect anything - but I am very pleasantly surprised in the gains we have made in civilization in the past 50 years The public is not educated properly by our liberal Stalinist public education system to survive in a capitalist society. They are taught multiculturalism and Kumbaya.

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Stuff and nonsense
Our education system is messed up due to the people not caring, both liberal and conservative..

Curious Cat said:

then couldn't we solve the problem by better educating the younger of society, such as myself?

and what about the people with 10 different types of credit cards? couldn't they survive with a limit of one or two? perhaps then, they would only have interest on one card, therefore not driving them so into bankruptcy. [sp?]

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Only 16 ??
You possess more wisdom and common sense than many, if not most adults - the ones with 20 credit cards...

earthworm said:

Only 16 ??
You possess more wisdom and common sense than many, if not most adults - the ones with 20 credit cards...

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why is everyone so surprised that im only 16???? sheesh. but thank you.

but what about the education?

creativedreams said:

Would it help america have a better economy if illegal loan sharking percentages were lowered to lever the credit cards down?

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This may be a little off topic, but if you ask me, credit cards should be banned altogether. They encourage people to spend money they don't even have. How many people are in debt because of credit cards? Yes, it is their own stupid fault and I have no sympathy for them at all, but no one can deny that these flimsy bits of plastic encourage people to spend.

If you cant afford to buy something, that means you should go without. Save your money, then buy it. But people use their cards to buy things, then they use them again and again, and then the bill arrives and they are shocked because they can't pay it.

They take out a second card to pay off the first, a third to pay off the second, etc etc.

The only people who should be given credit cards are those with a high enough income that would ensure they can pay the bill, and the limit on a credit card should be based on that persons income.

Curious Cat said:

then couldnt we solve the problem by better educating the younger of society, such as myself?

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Partially. However, lots of education won't entirely solve the problem if the companies themselves go to Herculean efforts to obscure, omit and otherwise not disclose important information especially when people need credit. Think of it like the stock market. The smartest investor can't make good decisions when the financials of companies are fraudulent. At best, both the investor and the educated potential credit card consumer will simply not invest or get a card, but that does not help them in the long run.

As I've always said, good information generally leads to better decisions and bad information leads to bad decisions.

creativedreams said:

I am referring to the interest rates charged on the loaned money.

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What makes you think they are illegal or that people are uninformed?

But new research suggests that most payday borrowers are more rational and informed than critics believe. A January 2009 study by Gregory Elliehausen at George Washington University found that payday borrowers make informed choices. About half of the 1,173 payday borrowers he surveyed considered other credit alternatives -- such as bank, credit card, or personal loans -- before taking out a payday loan. Over 80% lacked sufficient funds in their bank accounts to meet their expenses, so by taking out a payday loan they avoided expensive checking account overdraft fees. Nearly 90% said they were either very or somewhat satisfied with the transaction

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Robert DeYoung Says Price Controls From Congress Will Make Payday Loan Difficult for Borrowers - WSJ.com

creativedreams said:

Would it help america have a better economy if illegal loan sharking percentages were lowered to lever the credit cards down?

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No. That would only decrease our access to credit. Which, would be a good thing. However, I prefer to let the market handle this. When people tire of the 27% interest they are paying, then maybe they'll put more money in the bank and less money on their credit cards.

Just be thankful it isn't serfdom.

obvious Child said:

What makes you think they are illegal or that people are uninformed?

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That's the thing, the people who get payday loans know exactly what they're doing, it's been shown over and over, but these ridiculous liberal asshats think they know what's best for everyone so they're going to "fix" the "problem" that doesn't exist by harming the same people they claim to be helping.

Years ago, I helped a friend set up one of those payday loan places and I had concerns about the customers, like a lot of people initially do, so I talked to people, hundreds of them, and without exception, they *ALL* knew what they were getting into. Not a single one of them felt used, abused, cheated or ripped off, they were all using a service that they needed and they accepted the costs as a part of life.

Makedde said:

credit cards should be banned altogether. They encourage people to spend money they don't even have.
it is their own stupid fault and I have no sympathy for them at all, but no one can deny that these flimsy bits of plastic encourage people to spend.

If you cant afford to buy something, that means you should go without. Save your money, then buy it.

The only people who should be given credit cards are those with a high enough income that would ensure they can pay the bill, and the limit on a credit card should be based on that persons income.

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i AGREE completely! except that it would bring the economy down quite a bit... :/

creativedreams said:

Would it help america have a better economy if illegal loan sharking percentages were lowered to lever the credit cards down?

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Interest rates have gotten rediculous at this point. My brother-in-law has had great credit for sometime but that hasn't stopped his credit card companies from jacking up his interest rates for no reason. Seriously, he pays on time every month and more than the minimum but most of his cards have raised the interest to 18 - 25%. He never uses his cards for anything other than emergancy room visits or car problems but they still see fit to raise his rates willy nilly for no other reason than because they can. This is the result of laws passed in the early Bush years when they also made it more difficult to file bankruptcy.

There are also other tactics that credit card companies use to squeeze more money out of people. Like lowering a person's credit limit in order to charge over-limit fees. Tacking on last minute maintenace fees between statement due dates in order to charge late fees. Late fees are another thing, it doesn't cost creditors $30.00 if they get your payment 1 day late. If it did then they wouldn't sit on your payment for a week after they received it.

Futhermore bad credit has created a shadow business. If you don't pay your bills for a length of time the original creditor will sell your debt to a collection agency most often for pennies on the dollar. The collection agency will attempt to collect but if you still don't pay, they sell your debt to another agency and the cycle continues. Then you start getting settlement offers asking for you to pay half the debt just to get it off the books. Or more likely so they can at least recover the money they bought your debt for.

If I sounds like I'm speaking from experience, I am. I'm one of those Americans that had a lot of **** hit the fan and once you fall behind it's not easy getting back up. And it's not just me, everybody who has or had a spouse that lost their job is in the same boat. The reason that this has become such a big deal isn't really because of the way creditors issue credit but because of what happens when people have their lives turned upside down. One wage earner loses their job and the credit card becomes a suppliment for the missing income. People start buying food with them and use the 'real' money for bills like mortgage or rent.

Cephus said:

Years ago, I helped a friend set up one of those payday loan places and I had concerns about the customers, like a lot of people initially do, so I talked to people, hundreds of them, and without exception, they *ALL* knew what they were getting into. Not a single one of them felt used, abused, cheated or ripped off, they were all using a service that they needed and they accepted the costs as a part of life.

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While I agree, based on the evidence that payday loans aren't the evil people think they are, I'm not so sure about credit cards especially given the ignorance over how they work in the general population. I'd be for more disclosure in readable print about the specifics not to mention barring credit card firms from deliberately obscuring important information. If we don't let companies do this on their 10ks, why would we allow credit card companies to do it on their applications?

obvious Child said:

While I agree, based on the evidence that payday loans aren't the evil people think they are, I'm not so sure about credit cards especially given the ignorance over how they work in the general population. I'd be for more disclosure in readable print about the specifics not to mention barring credit card firms from deliberately obscuring important information. If we don't let companies do this on their 10ks, why would we allow credit card companies to do it on their applications?

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We need to bring back usury laws and limit the amount of interest a credit card company can charge. If a customer's credit is so bad as to require them to pay 20% interest, they shouldn't get a credit card to begin with.

But just wait until they stop issuing cards and everyone starts whining about how unfair it is. You can't win.