March 22, 2007
Time To Abolish Debt Slavery
The Nation: Credit Card Companies Use Tricks And Traps To Trap Users In Debt
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CBS Evening News, 03.07.07
Wednesday: Senators warn credit card companies about their policies; the housing market slump could be prolonged; and Congress demands answers from the Army's surgeon general.
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Credit Card Issuers Take Heat
Consumer debt has reached an all-time high. Some senators say predatory credit card policies are a big part of the problem and want card issuers to change their practices. Sharyl Attkisson reports.
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In the old days, banks lent money to people they were confident would pay them back. No more. These days, banks search for people who cannot pay them back and lend them money anyhow.
These unsecured loans come in the form of credit cards. And the banks cannot find enough young people, students, sick people and old people on small fixed incomes to give credit cards to.
Once they've got them signed up for a card the tricks and traps begin. From then on their victims will spend their money and their lives paying on a debt which they will never discharge. It's as though they had been thrown into a new form of indenture to Citigroup or J. P. Morgan Chase.
An example of what credit card-issuing banks do to people was given to the Senate Subcommittee on Investigations, where Alys Cohen of the National Consumer Law Center, testified about "a young Navy sailor who opened a credit card account with First Premier Bank on November 21, 2006. The credit card had a $250 credit limit and a 9.9 percent APR for purchases. The same day that the sailor opened the account, he was assessed two fees — a "Program Fee" of $95 and an "Account Set-Up Fee" of $29. The next day (November 22), he was assessed a participation fee of $6. Three days later (November 24), he was assessed an annual fee of $48. When this young sailor received his first month bill, which had a closing date of Nov. 24, 2006, he had already accrued a balance of $178, without making a single purchase.
"The next week, the young sailor used the credit card for four transactions totaling $84.85.On Dec. 22, 2006, he was assessed a participation fee of $6. With all these fees, the young sailor was already over his credit limit, despite making less than $85 in purchases on a card with a $250 limit. He was assessed an over-limit fee of $25 and a late fee of $25, plus a finance charge of $1.96, on Dec. 26. He now owed a balance of $320.81."
The Wall Street Journal, covering the same Senate hearing, recounted the story of "an Ohio credit card holder named Wesley Wannemacher, who recounted for the committee how he wound up paying $6,300 on a $3,200 debt on a credit card issued by J.P. Morgan Chase & Co., and still owed $4,400. He was charged $4,900 in interest, $1,100 in late fees and $1,500 in over-the-limit fees. Chase eventually forgave the remainder of what Mr. Wannemacher owed, but Mr. Wannemacher said Chase only told him that after he was called to testify before the subcommittee."
It used to be that, if a person were caught in the credit card web, all else failing, he or she could get out of debt servitude by declaring bankruptcy. The new bankruptcy law, lobbied through Congress with help from the credit card interest, makes bankruptcy painful, expensive and hard to get.
With the Democrats in control — they are somewhat less tainted with bank money than the Republicans — some kind of a new credit card law is a possibility. It might make the tricks and traps used by the banks on their credit card customers illegal.
But that approach is slow, cumbersome and ineffective. A simpler law would make credit card debt arising from tricks and traps uncollectible in the courts. Take away the banks' power to force payment.
In the meantime if you need money to pay your medical bills or get your car fixed, get a loan from the Mafia. You'll get a lower interest rate and better terms.
By Nicholas von Hoffman
Reprinted with permission from the The Nation.
| If you like this article, check out www.thenation.com for more investigative reports, timely editorials and incisive columns |
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"Banks have the right to be repayed. I suggest sending them money each month until the debt is settled. There is no need to bankrupt the financial system.
Posted by Antillo99 at 02:15 PM : Mar 22, 2007"
So you didn't read the article huh.....the guy paid 197% of the loan amount and still owed 138% of the loan balance because the credit card company fixed the rules so they could screw him. He would have ended up paying 235% interest on a $3200 loan, kinda redefines the concept of usury doesn't it. 100 years ago, charging more than %25 interest was a felony and was likely to get you killed, now it's standard practice.
Bankrupt the financial system?!? what planet are you from? I guess the reports of record profits for the last several quarters in the finacial district just went right over your tiny little head.
respond with something like "i'd rather eat dirt"
aka the movie "fight club"
But if you want to see really bad check out the student loan racket.
Sallie Mae, and its lending partners, have a real racket and its just about impossible to fight them.
Congress knows about it and yet they fear them due to the billions of dollars they have at their disposal with very little oversight.
Here's a novel idea: don't buy something with a credit card unless you have the money to pay for it.
Another pitifiul gut reaction from the Nanny Statists: "I feel sorry for these people, so we need to make more laws to protect them from their own irresponsible habits."
Admittedly, the incident with the sailor was ridiculos, but also extremely rare. Most cards don't even charge an annual fee anymore. Always read the fine print.
We are all SLAVES in a Fascist Tyranny ruled by the Elite. The Power Elite control ALL the Corporations.
America is NOT a Democracy.
STOP PLAYING THE GAME!!!
It's RIGGED. The HOUSE always wins.
How about a law that eliminates" fine print" !
Where do they find these people?
Do Not
Sign up for a card that has start up or yearly fees.
Use cards that don%u2019t rebate you a % of the amount you charge.
Use cash advance
Use the card if their is a lower cash price.
Exceed your limit
Do
Make all your purchases you can on the card. The stores are charging for credit if you use it or not. The more you charge the more rebate you receive
Most important, pay the bill in full every month, live within your means.
The monthly statement help you budget by showing your spending.
Credit is like any tool if you aren%u2019t careful it can hurt you.
If the card companies can't charge outrageous amounts, it won't be worth it any longer for them to give credit to people who can't pay it back.
If you don't have the cash, you don't need the product!
Caveat Emptor truly applies to the credit card industry. Teach your children to treat credit cards as a last resort.
As for us adults, one stiff run-in with credit cards should wise one up quickly. Once we have weened ourselves off of credit, the market will rebalance itself and leave the wolves out in the cold.
This kind of credit card are offered in the internet.
I receive 7 or 10 every day.
Debit cards are NOT insured like credit cards are against fraud, loss and bad products, debit cards are like CHECKS and if you lose your money it' pretty much gone so do NOT keep $2,500 in a debit card acct!
I've had many different credit cards over the years and these scare stories like this one of the Navy man must be real RARE because I have never had a problem of any kind with any credit cards.
The fact that he got a card with a measly $250 limit suggests it was one of those shady companies
or the kind you have to send them money to start with $300 to get a card with a limit of $300 to build up your lousy credit history.
Every card I was given had at least $2000 limits initially, and Discover, Providian both came with $5,000 limits, no annual fees and no 'setup" or "program" fees. Household bank came with a $2500 limit.
No annual fee cars are plentiful you just have to find them.
I suspect the navy man's $250 story has a few things left out, like maybe a previous bankruptcy, big debt from student loans, poor payment history and this card was the card of last resort and certainly not typical.
They are a scourge!
George W's anti bancruptcy gift to them shows what a scumbag he is too.
I was burned by countrywide many yrs ago with one of those cards that accrues big bills when you dont even use em. I refused to pay the fees on a card I didnt even use yet.... I ended up accruing interest on the fees while I was haggling with them to take the card back, and stained my credit.
After that... I said never again...and now I just have credit cards to make an occasional online purchase that I usually pay off with cash the next day or as soon as I recieve the Item.
Credit Card debt IS a form of slavery... those things will have you working long after you shouldve retired...paying for goods that have long expired.
rray52
"Use cards that don%u2019t rebate you a % of the amount you charge."
why do you say that?
They should be called Loan Cards. With no interest, and no fees. You pay for the card by an application fee. When you use it, until you pay it back, you can't borrow any more. Simple. This would make America a better and happier place to live.
Time to put laws on the side of the consumer again!
Don't tell me how you desperately you need the credit--everyone can live cheaper and save for emergencies if they want to. There is always a lower of standard of living you can get along with. Turning to credit will make your financial problems worse, not better.
You can criticize me or ignore me, but reality will crush you. This story is the proof. Avoid debt like the plague and you will be better off no matter what else is happening to you.
The hearing giving by the America Congress trying to open the abusive behavior from Credit Cards Banks Business has created a new and very aggressive wave of letter with new words and treating against there clients.
I have receive ones from CC that I don't use.
The customer services personal selves are talking to the clients as if we were criminals and treating us with more APR if we do something wrong, without reason.
Put our future life like a hell if we break the bank commitment. I could not understand about this kind of attitude with someone who I do not know. I find that a public insult from people without education and profession. This people later going to the street and giving public about every client finance situation like a circus number.
Where is the respect of to the client from the Banks?
What kind of human society are we putting in the world?
Who can stop this Banks behavior?
Caveat emptor -- it's really a very simple concept.
It seems to me that many of us have been unsuspectingly caught in a trap. We were just going along minding our own business, watching television, enjoying life with our children and life was good. We were buying those interesting things we saw on T.V. and then prices went up and our wages didn%u2019t. So, we started borrowing more and more and began to fall farther and farther behind. We were urged by our President after 911 to keep spending. (I wondered why he said that.) Then, I%u2019m just an amateur at this game of life, so I continued to do as suggested, until, one day, I began to realize how foolish I had become.
My earnings weren%u2019t going up, my bills were, life was no longer good and I started to panic. I can only speak for myself so this is what I did. For my own survival, I did stopped spending on things I didn%u2019t need and started saving instead. Life started to get better. Then I noticed, in order to get dental insurance, I had to join a Credit Union to get dental insurance so I could have my teeth fixed at a lower rate: supposedly. That didn%u2019t work. My bills were even higher. (Continued in: Part Two)
Recently, what is happening is, other events are taking place at an alarming rate and are being foisted on me one after the other. I go to the garage for car repairs and they always find something else that needs to be done. I could have FIOS installed for nothing so that I would be dragged into increased expenses after the installation. I had automatic downloads on my computer so that I could keep up to date. Then I started getting messages that I needed to pay for upgrades and that I needed to add other external devices.
I%u2019m about ready to disconnect any electrical devices I don%u2019t need, destroy my computer and have my teeth pulled. Then I%u2019ll take a blanket, move under a bridge, tell my next door neighbor to move over. Then, I%u2019ll hide away blissfully with my new found friends and begin throwing pebbles (they are still free) into the river.
You can%u2019t avoid corporate money suckers these days. But, you can learn to say, %u201CNO!%u201D
GLAC
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by mbcsmith
March 24, 2007 12:50 PM PDT
- What a piece of LIB s**t article. Socialism is their answer. Personal responsibility be damned.
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