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Someone please explain the logic behind credit loans.

VhayneVhayne Member UncommonPosts: 632

Ok, I'm gonna show my ignorance here I guess.  But this has been rolling around in my head for a long time, and I just don't understand how things got this way. 

When you go to purchase a car, you "finance" it.  Whatever that's supposed to mean.  Anyway, basically you are loaned money by a bank or financial entity.  Then you must pay back that loan with a specified amount of interest, within a pre-determined timeframe.  This makes complete sense.  If I loan my neighbor 500 bucks, and a 10% interest rate with an agreement he'll pay me back in 1 year, then I'll get back 550.  Pretty simple, safe, whatever.

Now, taking the car finance idea.  If you for some reason cannot pay your bill, the car is going to get repo'd.  This can happen all the way up to the final couple of months on your loan.  You pretty much could have already paid for ALL the interest, and nearly all of the car, and if you screw up, you lose it all.  Now the bank get your car, and can auction it, and you're left with nothing except bad credit and probably a judgment for whatever you owed.  Tough luck if it happens, but it's still logical in a sense.

Ok, now for the credit cards.  I understand these are usually "unsecured" credit loans.  Basically, they provide for you a certain amount of money that's available, with a "pre-determined" interest rate.  So let's take an example.  You turn 18, been working that job at McDonald's for the past 3 years, and now your'e ready to get your first credit card.  Some company is stupid enough to take a chance on you and gives you a $2000 limit. 

So you do what pretty much any 18 year old would do.  Go shopping!  Well, for a while everything is going fine.  You're enjoying your "new" stuff, paying what the credit card company told you to pay (let's say 100 per month).  A year goes by, and you think to yourself, "Hey self, I've given that company $1200 bucks so far."  So you call the company and ask how much the balance is.  Let's just say it's about 2750.......still. 

I'm gonna stop right there for a minute, so hopefully you can see where I'm going with this.  Understandably you should have to pay an interest rate for any loan you take out, otherwise how are the loan companies supposed to make any money?  But seriously, how can credit card companies get away with this kind of stuff?  Compounding interest rates, insane late fees, ridiculous interest rates, etc.  It almost seems criminal (not necessarily in a law sense, but in a "right vs wrong" sense). 

In the above example, when the credit limit (loan) was given, then an interest rate based on the person's credit should have been calculated.  Let's say it was 20%.  So the guy should have been responsible to pay back $2400.  And paying for 1 year, his remaining balance (if he didn't use the card anymore) should have been 1200.  But that's not how it works, it never does, except in car loans.

My main question is WHY?  WHY is this even legal?  You want to know why our country is in such bad shape right now?  I feel this kind of stuff is a big contributer. 

Comments

  • MunkiMunki Member CommonPosts: 2,128

    And thats how people like me who have never payed a penny to their credit card company can accumulate all sorts of rewards while having a plastic with no usage fees...

    My QOL goes up because of those idiots :)

    that being said, its an underhanded, manipulative business, I got not qualm with saying that.

    image
    after 6 or so years, I had to change it a little...

  • EkibiogamiEkibiogami Member UncommonPosts: 2,154

    The Prolem is People want to Live Like the Rich, W/O Liveing like the Rich.

    We want it Now And arnt willing to wait for it. So we take out a Loan. Something the rich never do.

    Are Banks and Credit cards Trully to blame for this? Yes and No. Just like Drugs if there wasent a Demand for them there wouldent be a Problem right now.

    Honestly tho If every day People came to your Door and asked for A slice of Cake, Would you Not start selling cake?

    If ye love wealth greater than liberty, the tranquility of servitude; greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen.
    —Samuel Adams

  • olddaddyolddaddy Member Posts: 3,356

    This is what I told my kids about credit cards:

    Credit cards are a convenience, you can pass through the checkout line at the store, or pass through the fast food window at McDonalds, faster using a credit card.

    They are not for buying things that you cannot afford. Use a credit card "30 days same as cash", that is, when you get your bill every month you pay it off entirely within the 30 day grace period. If you cannot afford to pay the card off within 30 days, you do not make the purchase.

    Then you don't have to be concerned with the minimum payments and interest rate compounding.

    This is the no fees, just rewards, program.

     

  • baffbaff Member Posts: 9,457

    In a "right or wrong" sense, it's wrong to borrow money.

    So if you do it, don't complain, just shut up.

     

    In your first example where you get your car repossessed with 2 months left to pay, you ring the company and arrange deferred payment. If you really cannot beg steal or borrow the final 2 months payment on your car, they will reposess it and sell it on your behalf, clear your 2 months debt and any other proceeds form the sale of the car left over you will get.

    This is a loser for you as they will speed sell the car for less than you could otherwise get for it.

     

    The rate of repayment is not calculated based on the borrower nor should it be anymore than the price of a TV in a shop should be set by the amount of money in a customers pocket. It is set by the lender and the borrower has the choice, based on his own calculations of his own creditworthiness whether or not it is an agreement he wishes to enter into.

    No one knows their personal creditworthiness better than that person themselves. You are a grown adult. You do not need a law to tell you what you can and can't repay. You went to school you studied simple arithimatic. you know your overheads, your incomings and your outgoings. Preisdent Obama doesn't need to hold it for you when you take a widdle either.

    You are not forced to take loans. You are not forced to get into debt or borrow. If you do so, do so wisely and cautiously.

     

    The reason the economy is so screwed up is because now that people can't borrow anymore money and it's time for them to all start paying it back, they want to legislate their way out of debt. They want the government to anul their debts. To welch on their deals and rip off the little old pensioners whose money they have spent by not repaying them. (Or worse get their government to force those last remaining savings to be lent to the very people who didn't repay any of the other bad debts).

    So what few people in the world left with any unspent savings can no longer risk lending them out to people who clearly have no intention of repaying them and infact all agree that it would be morally wrong to do so.

     

    Don't get it debt. It's wrong. Spend less than you earn. Save your money. Get richer every day.

  • HYPERI0NHYPERI0N Member Posts: 3,515
    Originally posted by baff


    In a "right or wrong" sense, it's wrong to borrow money.
    So if you do it, don't complain, just shut up.
     
    In your first example where you get your car repossessed with 2 months left to pay, you ring the company and arrange deferred payment. If you really canot beg steal or borrow the final 2 months payment on your car, they will reposess it and sell it, clear youy 2 months debt and any other proceeds form the sale of the car left over you will get.
     
    The rate of repayment is not calculated based on the borrower, it is set by the lender and the borrower has the choice, based on his own calculations of his own creditworthiness whether or not it is an agreement he wishes to enter into.
    No one knows their personal creditworthiness better than that person themselves. You are a grown adult. You do not need a law to tell you what you can and can't repay. You went to school you studied simple arithimatic.
    You are not forced to take loans. You are not forced to get into debt or borrow. If you do so, do so wisely and cautiously.
     
    The reason the economy is so screwed up is because now that people can't borrow anymore money and it's time for them to all start paying it back, they want to legislate their way out of debt. They want the government to anul their debts. To welch on their deals and rip off the little old pensioners whose money they have spent by not repaying them.
    So what few people in the wporld left with any unspent savings can no longer risk lending them out to people who clearly have no intention of repaying them.

     

    I agree with this post 100%, As far as credit cards are concerned they are a object of convenience to my perception and only to be used as a convinenence for something you can afford.

    Another great example of Moore's Law. Give people access to that much space (developers and users alike) and they'll find uses for it that you can never imagine. "640K ought to be enough for anybody" - Bill Gates 1981

  • BrianshoBriansho Member UncommonPosts: 3,586

    Credit loans let people buy things they cannot afford. This helps them live the American dream and fit in with the society and boost their community status.

    Don't be terrorized! You're more likely to die of a car accident, drowning, fire, or murder! More people die every year from prescription drugs than terrorism LOL!

  • MunkiMunki Member CommonPosts: 2,128
    Originally posted by baff


    In a "right or wrong" sense, it's wrong to borrow money.
    So if you do it, don't complain, just shut up.
     In your first example where you get your car repossessed with 2 months left to pay, you ring the company and arrange deferred payment. If you really cannot beg steal or borrow the final 2 months payment on your car, they will reposess it and sell it on your behalf, clear your 2 months debt and any other proceeds form the sale of the car left over you will get.
    This is a loser for you as they will speed sell the car for less than you could otherwise get for it.
     The rate of repayment is not calculated based on the borrower nor should it be anymore than the price of a TV in a shop should be set by the amount of money in a customers pocket. It is set by the lender and the borrower has the choice, based on his own calculations of his own creditworthiness whether or not it is an agreement he wishes to enter into.
    No one knows their personal creditworthiness better than that person themselves. You are a grown adult. You do not need a law to tell you what you can and can't repay. You went to school you studied simple arithimatic. you know your overheads, your incomings and your outgoings. Preisdent Obama doesn't need to hold it for you when you take a widdle either.
    You are not forced to take loans. You are not forced to get into debt or borrow. If you do so, do so wisely and cautiously.
     The reason the economy is so screwed up is because now that people can't borrow anymore money and it's time for them to all start paying it back, they want to legislate their way out of debt. They want the government to anul their debts. To welch on their deals and rip off the little old pensioners whose money they have spent by not repaying them. (Or worse get their government to force those last remaining savings to be lent to the very people who didn't repay any of the other bad debts).
    So what few people in the world left with any unspent savings can no longer risk lending them out to people who clearly have no intention of repaying them and infact all agree that it would be morally wrong to do so.
    Don't get it debt. It's wrong. Spend less than you earn. Save your money. Get richer every day.

    But is it ethical to go and find the least budget minded people possible, entice them with rewards knowing full well you intend to trap them in this cycle?

    Pyramid schemes are illegal, and yet you could avoid them easily.

    The intention of the credit companies is to get people trapped in the debt. That quite oviously situations itself as morally "bad."

    image
    after 6 or so years, I had to change it a little...

  • VhayneVhayne Member UncommonPosts: 632
    Originally posted by Munki

    Originally posted by baff


    In a "right or wrong" sense, it's wrong to borrow money.
    So if you do it, don't complain, just shut up.
     In your first example where you get your car repossessed with 2 months left to pay, you ring the company and arrange deferred payment. If you really cannot beg steal or borrow the final 2 months payment on your car, they will reposess it and sell it on your behalf, clear your 2 months debt and any other proceeds form the sale of the car left over you will get.
    This is a loser for you as they will speed sell the car for less than you could otherwise get for it.
     The rate of repayment is not calculated based on the borrower nor should it be anymore than the price of a TV in a shop should be set by the amount of money in a customers pocket. It is set by the lender and the borrower has the choice, based on his own calculations of his own creditworthiness whether or not it is an agreement he wishes to enter into.
    No one knows their personal creditworthiness better than that person themselves. You are a grown adult. You do not need a law to tell you what you can and can't repay. You went to school you studied simple arithimatic. you know your overheads, your incomings and your outgoings. Preisdent Obama doesn't need to hold it for you when you take a widdle either.
    You are not forced to take loans. You are not forced to get into debt or borrow. If you do so, do so wisely and cautiously.
     The reason the economy is so screwed up is because now that people can't borrow anymore money and it's time for them to all start paying it back, they want to legislate their way out of debt. They want the government to anul their debts. To welch on their deals and rip off the little old pensioners whose money they have spent by not repaying them. (Or worse get their government to force those last remaining savings to be lent to the very people who didn't repay any of the other bad debts).
    So what few people in the world left with any unspent savings can no longer risk lending them out to people who clearly have no intention of repaying them and infact all agree that it would be morally wrong to do so.
    Don't get it debt. It's wrong. Spend less than you earn. Save your money. Get richer every day.

    But is it ethical to go and find the least budget minded people possible, entice them with rewards knowing full well you intend to trap them in this cycle?

    Pyramid schemes are illegal, and yet you could avoid them easily.

    The intention of the credit companies is to get people trapped in the debt. That quite oviously situations itself as morally "bad."



     

    I agree with baff.  Staying out of debt, and saying "no" to credit cards is pretty much the common practice to NOT get yourself in this type of situation.

    However, what Munki is saying is exactly correct.  Here's an example: 

    http://www.yamaha-motor.com/waverunner/webpromo/waverunner.aspx

    Sounds great, right?  69 bucks a month?  Pretty easy for nearly anyone.  But that's only for the first 2 years.  After 2 years, it jumps up to 23% interest.  Well, again, by logic, if you were to purchase this waverunner (very basic model) at 8000 with 15% for 2 years, then 23% for the remainder, how much would you owe in 2 years if it wasn't paid off?  You would think it would be 9200 minus 1680 (what you paid) for a total of 7520, right? 

    Nope, it turns out, that for those 2 years you were paying nothing but interest.  It turns out to be a never ending cycle, unless you're somehow able to conjure up vast amounts to chuck towards it, or actually pay it off entirely, you're stuck with paying for it for nearly the rest of your life.  And if you screw up, they'll repo it lol.

    Ads like that sucker people into their scam of unending torture.  Yes it's legal.  Yes it's stupid to get into something like this.  However, just because something is legal, and therefore "ok" to take advantage of people's desires, does it make it "right"?

     

    I remember seeing those Best Buy ads all the time....."No interest, No payments for 18 months, etc".  Same kind of situation.  It sounds great, it suckers people in, then drowns them, regardless whether they were stupid enough to fall for it or not. 

  • CleffyCleffy Member RarePosts: 6,299

    I am with a credit union.  They are just... awesome.  I have had my card with them since 2002, and I have been over limit several times, yet not a single overlimit or past-due fee.  They even offer me a balance transfer from other credit cards at a 5% interest rate, compared to the normal 14~19%.   Also sometimes if I accidently overdraw my checking account, they automatically take funds from my savings account and don't give me an overdraft fee.  Sometimes they even ignore the overdraft fee, they just ask me to pay it off when I can.

    Ohh ya, and 4.9% interest for savings and credit, with 4% APR on most loans.

  • MunkiMunki Member CommonPosts: 2,128
    Originally posted by Cleffy


    I am with a credit union.  They are just... awesome.  I have had my card with them since 2002, and I have been over limit several times, yet not a single overlimit or past-due fee.  They even offer me a balance transfer from other credit cards at a 5% interest rate, compared to the normal 14~19%.   Also sometimes if I accidently overdraw my checking account, they automatically take funds from my savings account and don't give me an overdraft fee.  Sometimes they even ignore the overdraft fee, they just ask me to pay it off when I can.
    Ohh ya, and 4.9% interest for savings and credit, with 4% APR on most loans.

    I can second that love... my Credit Union holds a very special place in my heart.

    image
    after 6 or so years, I had to change it a little...

  • Jimmy_ScytheJimmy_Scythe Member CommonPosts: 3,586

    Credit cards are a form of usury.

    Long, long, long ago, most countries considered usury a capital offense. Most religions also hade strong prohibitions against usury, Islam still doesn't allow the charging of interest, but as time went on most cults and governments decided that they liked fat bribes from money lenders more than their Gods or their people. To this day, money lenders are still the lowest form of life on the planet.

  • OuchmuchOuchmuch Member Posts: 340

      The logic behind credit cards and lines of credit can be found in these old sayings..

          "A fool and his money are soon parted"

          "There is a sucker born every minute"

     

      Of course those also seem to be the mottos of several other buisnesses.

  • OuchmuchOuchmuch Member Posts: 340

    sorry double post... :;sigh::

  • VhayneVhayne Member UncommonPosts: 632
    Originally posted by Jimmy_Scythe


    Credit cards are a form of usury.
    Long, long, long ago, most countries considered usury a capital offense. Most religions also hade strong prohibitions against usury, Islam still doesn't allow the charging of interest, but as time went on most cults and governments decided that they liked fat bribes from money lenders more than their Gods or their people. To this day, money lenders are still the lowest form of life on the planet.



     

    Money lenders = banks

    People not being able to pay back the loans they've been given by "banks" are the reason we're in the mess we're in, correct?

    So when you add 2+2 here, you come to a possible conclusion that, because of the insane "usury" of banks, people were not able to pay back the loans, which inturn bankrupt the banks.

    I've seen so many people shout, "If it wasn't for all those stupid people taking out loans for crap they can't afford, we wouldn't be in this situation."  Maybe a second look through a new set of lenses is necessary.

     

  • Jimmy_ScytheJimmy_Scythe Member CommonPosts: 3,586
    Originally posted by Vhayne

    Originally posted by Jimmy_Scythe


    Credit cards are a form of usury.
    Long, long, long ago, most countries considered usury a capital offense. Most religions also hade strong prohibitions against usury, Islam still doesn't allow the charging of interest, but as time went on most cults and governments decided that they liked fat bribes from money lenders more than their Gods or their people. To this day, money lenders are still the lowest form of life on the planet.



     

    Money lenders = banks

    People not being able to pay back the loans they've been given by "banks" are the reason we're in the mess we're in, correct?

    So when you add 2+2 here, you come to a possible conclusion that, because of the insane "usury" of banks, people were not able to pay back the loans, which inturn bankrupt the banks.

    I've seen so many people shout, "If it wasn't for all those stupid people taking out loans for crap they can't afford, we wouldn't be in this situation."  Maybe a second look through a new set of lenses is necessary.

     

     

    Uh, no.

    The actual equation is more like this: Money lending = money printing

    The result of that equation is that money = debt

    A few years back I learned about how banks simply produce money out of thin air. Of course I didn't believe that, so I talked to a college economics professor with a PH D. Lo and behold, this is actually how money is created. Basically, it's a pyramid scheme.

    But it gets even better when you consider the way that banks trade defaulted loans (money owed is still an asset remember) among themselves and to collection agencies. What's really funny is that several independent studies where done around 2000 that showed how banks could limit their liability by 50% by simply screening out applicants with low income and credit. Most banks ignored this because money owed is the same as money.

    Banks don't have to loan to everyone. There's a reason why it's so easy to get credit cards and financing. Debt is money and money is debt. Every dollar in you pocket is a dollar that someone else owes a bank.

  • popinjaypopinjay Member Posts: 6,539

    I agree with all of these about credit:


    Originally posted by Munki:

    that being said, its an underhanded, manipulative business, I got not qualm with saying that.
    ------------------------

    The intention of the credit companies is to get people trapped in the debt. That quite oviously situations itself as morally "bad."


    Their main goal is to make money, pure and simple. They do it within the law and will take every inch of that law.

    Originally posted by baff:

    You are not forced to take loans. You are not forced to get into debt or borrow. If you do so, do so wisely and cautiously.


    Yep. Simple as this for the most part.

    Originally posted by Briansho:

    Credit loans let people buy things they cannot afford. This helps them live the American dream and fit in with the society and boost their community status.


    Yep, and they advertise it heavily on all media to reinforce this idea every day, people get influenced by it eventually.


    Originally posted by Vhayne:

    "However, just because something is legal, and therefore "ok" to take advantage of people's desires, does it make it "right"? Morally, nope. This is a good point.



    Originally posted by Cleffy:

    I am with a credit union. They are just... awesome.


    Credit unions are still an underused asset most people should look into. They used to be selective about membership, but now just about every credit union you can get into almost.

    Originally posted by Jimmy_Scythe:

    Credit cards are a form of usury.


    Yep.

    I don't agree with all of these about credit:


    Originally posted by Ekibiogami:

    The Prolem is People want to Live Like the Rich, W/O Liveing like the Rich.


    Everyone doesn't feel like this. Some people use credit cards to pay medical bills for members of their families because they don't have adequate health insurance, but they DO have a 25k credit limit with Bank of America. Without them, they can't get treatment for their family emergencies.

    Originally posted by olddaddy:

    If you cannot afford to pay the card off within 30 days, you do not make the purchase.


    Same as above with the medical bills. A house note is not recommended for paying off with a credit card. But if faced with putting my family on the street in a motel or using the card to charge 10k while I look for a new job in the meantime, I'd do that in a minute.

    Originally posted by baff:

    In a "right or wrong" sense, it's wrong to borrow money.


    This sounds like a moral judgement you are making. Borrowing of money is how businesses built the country and thousands of small business are started each year. Plenty with credit cards.

    Originally posted by Jimmy_Scythe:

    To this day, money lenders are still the lowest form of life on the planet.


    I think the lawmakers that allow them to charge usury fees of 29.99% are the lowest form of life. There is no way 30% interest is justified legally as better for America. That's only 20% lower than a loan shark in a neighborhood would charge.


  • Jimmy_ScytheJimmy_Scythe Member CommonPosts: 3,586
    Originally posted by popinjay




    Originally posted by Jimmy_Scythe:
     
    To this day, money lenders are still the lowest form of life on the planet.

    I think the lawmakers that allow them to charge usury fees of 29.99% are the lowest form of life. There is no way 30% interest is justified legally as better for America. That's only 20% lower than a loan shark in a neighborhood would charge.

     

     

     

    This is kind of a "chicken or the egg" kind of thing. When you consider how much power private institutions have over the value of our currency, do the law makers really have much choice?

  • popinjaypopinjay Member Posts: 6,539


    Originally posted by Jimmy_Scythe
    Originally posted by popinjay
    Originally posted by Jimmy_Scythe:
     
    To this day, money lenders are still the lowest form of life on the planet.
    I think the lawmakers that allow them to charge usury fees of 29.99% are the lowest form of life. There is no way 30% interest is justified legally as better for America. That's only 20% lower than a loan shark in a neighborhood would charge.
     
     


     
    This is kind of a "chicken or the egg" kind of thing. When you consider how much power private institutions have over the value of our currency, do the law makers really have much choice?

    Yes they do.


    Usury businesses have been around since biblical times as someone pointed out already, so it's not chicken/egg. They were around long before laws and governments. Every lawmaker knows this going into office so they couldn't all be that naive to know they aren't there trying to buy them.

    The usury companies are able to buy the politicians through threats, coersions or bribes. Again... it is the lawmaker that is slimier than the company. The company is out for itself to get laws passed for its benefit, while the lawmaker is supposed to be for the people and selfless in service.


    Yeah, I think they are worse.

  • MunkiMunki Member CommonPosts: 2,128
    Originally posted by popinjay


     

    Originally posted by Jimmy_Scythe


    Originally posted by popinjay
     
     



    Originally posted by Jimmy_Scythe:

     

    To this day, money lenders are still the lowest form of life on the planet.
     
     

    I think the lawmakers that allow them to charge usury fees of 29.99% are the lowest form of life. There is no way 30% interest is justified legally as better for America. That's only 20% lower than a loan shark in a neighborhood would charge.

     

     





     

    This is kind of a "chicken or the egg" kind of thing. When you consider how much power private institutions have over the value of our currency, do the law makers really have much choice?



    Yes they do.

     



    Usury businesses have been around since biblical times as someone pointed out already, so it's not chicken/egg. They were around long before laws and governments. Every lawmaker knows this going into office so they couldn't all be that naive to know they aren't there trying to buy them.

     

    The usury companies are able to buy the politicians through threats, coersions or bribes. Again... it is the lawmaker that is slimier than the company. The company is out for itself to get laws passed for its benefit, while the lawmaker is supposed to be for the people and selfless in service.

     



    Yeah, I think they are worse.

     

     

     

    This is why im in favour if paying government employees large amounts of money and an aboslutly ungodly retirement package. That way they aren't as easily bought with 5 years of salary from a company that considers that bride chump change.

    My god, they decide the fate of the country, and we pay them less than some retail managers.

    image
    after 6 or so years, I had to change it a little...

  • TheFranchiseTheFranchise Member Posts: 241
    Originally posted by Munki 
    This is why im in favour if paying government employees large amounts of money and an aboslutly ungodly retirement package. That way they aren't as easily bought with 5 years of salary from a company that considers that bride chump change.
    My god, they decide the fate of the country, and we pay them less than some retail managers.

     

    Hey, it worked in California.  Oh, wait....  :)

     

    Things like credit card late fees were mentioned.  No one forces a person to borrow money, and no one forces a person to be late paying it.  Do I think those fees and charges tend to be high?  Sure.  

    I mainly use my Discover card.  Not sure what my other cards are at, but that one is at 9.9%.  Never carried a balance on it.  People with high rates often get them from having poor credit scores and missing payments.  It's not too hard to have a good credit score.  Pay at least the minimum, don't pay it late or miss one, and that's half your score right there.  High-risk people get high-risk rates.  Do I think some of those rates are ridiculous?  Sure.  A decent balance transfer can often get somebody back into a "do-able" rate, though.

     

    Who's at fault for buying a house they can't afford?  The buyer supposedly read the agreement and signed on the line, so they have responsibility, but the loaner also supposedly knew what they were doing and whom they were loaning money to, so if that person is a big risk and defaults, the loaner gets to eat it, too.  They're both enablers, dealing each other the crack they need.   Too bad the people who did the right thing now get their money confiscated to bail out those who did the wrong thing.  Credit card defaults are coming next.  Watch for it. 

     

    Back in the 80s, you could earn around 15% interest on your money.  Savers were rewarded.  Savers are no longer rewarded.  They get next to nothing on their cash, while the government and other spenders get their debt monetized via inflation.  Savers just get their money devalued.  The media often says how no one saves.  Why should they if they have no reason to?  With the current low interest rates, they are trying to fix the housing and credit bubble with another bubble.  All these problems because people borrowed too much money, so we're going to fix it by loaning people more money.  What?

      

    The real scammers are the government and The Federal Reserve.  The Fed is the biggest scam in United States history.        

  • SigneSigne Member, Newbie CommonPosts: 2,524

    I've had a wee bit of trouble with two cards, mainly.  BoA tried to raise my APR from 6 % to 18% for no reason.  Well, THEY had a good reason, I guess - they're kind of in financial trouble.  In any case, I've never been late on any payment to anything ever but that doesn't matter any more.  Banks are in trouble and they scrambling to find ways to make you pay for it.  I don't let banks bully me, however, and I opted to close the account, regardless of how it might affect my credit score.  We had that one balance from a large purchase a couple years ago and we haven't bought anything on a credit card since then.  We use cash/debit card for everything now.  For some reason, they lowered our APR to 4 % now that the account is closed.  Go figure. 

    The other card was one I had closed about a year ago because they decided to charge a fee for it.  I had even removed it from my online banking since there was no balance.  Out of the blue, nearly a year after I had shut it down, they send me a notice that they're raising my APR.  I called them and asked about it and they confirmed they had closed the account at the time I requested it, but if I agreed (and by "agreed" they meant do nothing at all) to the shiny, new, HUGE APR, they would re-open it.  As if.  Evidently, they can do this for a year after an account is closed.  If I had not responded by sending them a letter refusing their offer, it would have gone through even without my express permission.

    I agree with Baff about not getting involved with credit cards if at all possible.  God, your life feels so much easier when you don't have these institutions to deal with.  Since they were deregulated years ago, they've had mostly free reign to fiddle with your account as they like and now they are doing it in full force.  You have to be alert, especially until the new regulations go through next year.  Until then, you have to expect them to try whatever they can to get money from you.  Practices that sound as if they should be illegal are, in fact, not.

    Incidentally, I use a credit union, too.  The credit card they gave me with the account has never had an APR increase, although it's decreased twice since I've had it even though I don't use it.  I've been very happy with all their services.

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