Obama Targets Credit Card Industry
Democratic Hopeful Proposes "Bill Of Rights" For Debtors
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Democratic presidential hopeful, Sen. Barack Obama, D-Ill., takes part in a roundtable discussion at Grand View College in Des Moines, Iowa, on Monday, Dec. 3, 2007. (AP)
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"The truth is, our middle-class families are not going to be secure so long as they can't get out of debt," Obama said Monday, sharpening the populist rhetoric of his presidential campaign. "If we're serious about stopping Americans from falling deeper in debt, we've got to crack down on predatory credit card companies that are pushing them over the edge."
Obama pointed to studies showing that consumers have an average personal debt of more than $8,000, a load driven higher by credit cards. He said soaring credit card debt could turn into a crisis as big as the one in the subprime mortgage industry.
"The larger risk is that what's happening in the housing market could lead to a slowdown in the entire economy," he said.
The Illinois senator made his comments in a statement and in a discussion with debt counselors and consumers who have struggled with credit card debt.
Obama's "credit card bill of rights" would force credit card companies to give consumers the option of dropping out of an agreement if the companies raise interest rates. It would ban increasing rates on past debts and prohibit charging interest rates on transaction fees. He would also force additional disclosures by credit card issuers of terms of the agreement.
"I've seen many Americans who have been driven into financial ruin as a result of all of this," said Obama.
He spoke as he opened his latest campaign swing in the state where precinct caucuses traditionally launch the presidential nominating season, and where polls find him in a dead heat with Hillary Rodham Clinton. Both have portrayed themselves as champion of the middle class.
Obama did so again by accusing credit card companies of deceptions.
"Many credit card companies are tricking Americans into agreements they can't afford because that's how they make big profits," he said. "Well, no company's bottom line should come before what's right for the American people."
He said many consumers are squeezed twice, with credit card debt forcing them into bankruptcy, where the odds are also stacked against them.
Obama also spoke of his opposition to an overhaul of bankruptcy laws that he said protects credit card companies more than consumers.
"Every American has a responsibility to pay what they owe, but we need to make sure that what they're paying is fair, and we've got to do more for those Americans who aren't able to climb out of debt and actually have to declare bankruptcy," he said, promising reform of bankruptcy laws if elected president. He said he opposed a 2005 bankruptcy bill because it protected lenders while "preventing middle-class Americans from getting back on their feet after a crisis - even if they've suffered an illness."
He said much credit card debt comes from consumers who have been forced to use credit cards to pay for medical costs.
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Have you? You should understand why credit card companies richly deserve the scrutiny they get from Americans and their congress-- ie. management of credit card companies has a responsibility which it clearly is content-- in too many cases-- to ignore.
After the 2005 lending law was changed to benefit the credit card lenders, they went beserk and became more, nor less, abusive of their customers. Lord Acton said it best-- "Absolute power corrupts..."
Are we puzzled? This is not even a remote match with the pious propaganda about the marketplace GOP bozos like to spin in moments of doubt.
In fact, Bush capitalism is a failure-- not the machine he promised would produce more wealth for more people. The erosion of the American middle class continues, and for most Americans saddled with increased medical and other debt, Bush capitalism is another empty promise-- if not a lie-- and no gateway to prosperity. With Bush subsidies to even Big Oil in a time of obscene oil profits, Bush crony capitalism says, "Consumer be damned!"
A stickup in broad daylight is robbery, nonetheless.
At one point when I went back to school I was very delinquent on a credit card. I had lost my high-tech job, and the only option for me was to re-train for a job in a different industry and go back to school.
After missing a couple of payments on a card I was spiraling downward and COULD NOT get my account back current because of the fees. Eventually most of that debt was interest, late fees, and over the limit fees (that happened when the late fees put me over).
I settled the account with the collection agency, but the worst part is that the IRS now counts it as income. So I was responsible not only for what I charged, but all of the other fees as well.
I can only imagine the problems that people are going to start having with the current housing/credit crisis. The credit card companies will only compound the problem. I truly believe that the US has major issues centering around the criminal practices of the credit card industry.
However, I sat on the card for a few weeks, because I had decided to only use it in case of emergency. Meanwhile, I had NO CONTACT from Capital One.
The one night, I was preparing for a job interview the next morning and went to find a suit. I was trying to put about $1100 on the card, and my purchase was rejected. They told me I was above the limit. I called into Capital One, and after being transferred many times, and talking to people in foreign countries, I was told it was a mistake that THEY GUARANTEED THEY WOULD FIX, and that I would "walk out of that store with my clothing" that night. I got disconnected. Nobody there would help. I was very embarrassed, and insisted to the salesgirl that I had a $3000 limit.
I found out a few days later that CAPITAL ONE MADE A MISTAKE AND ISSUED 10,000 CREDIT CARDS WITH A $3000 LIMIT. They simply took it away with no warning to consumers. I never did receive a letter, nor an apology.
Posted by sonart37
Obama clearly stated that every one must pay what they owe. I feel they should also. Banks do play games with rules and payment dates to get more. I like his statement "their bottom line should not counter what is "fair" to the American consumer. Certainly in my own experience I posted to try and go from 1.99% to 16.99% is a complete utter rip off.
Want to drive the credit card companies nuts? -
Don''t own one; you can heat your home by burning the credit card offer junk mail they will send you to change your mind.
Yeah, I know what your saying but I am kind of old fashioned and still do do like to put my banking and personal finances in/on my computer. My son tells me it''s secure but you read in the papers all the time about personal information theft through hacking.
It''s a good idea to keep this in mind when listening to election season promises by presidential hopefuls.
After about 40 days I did not receive a statement so I called, the girl said I should have paid that statement (I never received) 10 days ago and because I was late they were raising the int. rate to 16.99%. She said they were not responsible for lost mail.
I asked if this was some scam they ran by not sending out a statement in the first place? I told her I have lived in this home 32 years and I get my mail even if it only has my full name on the letter.
I got a manager on the phone and said I would pay the entire amount, I have the money, I was just taking advantage of their lower rate, I asked her for the full payoff amount. She said just a minute and after a few minutes came back and said they would continue the original deal at 1.99%.
I still think they tried to pull a scam, they looked and were able to see I could pay them off so they backed down.
Banks and credit card comp. are vultures!
Then look beyond this problem. The reason they can do this is because people pay them. The reason they pay them is because we want our stuff and we want it now. No layaways, no saving up for something. We want the no payment for 12 month deals. And yet, we only have some much income and have a dwindling amount of spending money after the utitlities and mortgage bills are paid. The big challenge for consumers is to resist all the temptations out there brought to us by slick marketing.
My granddaughter got 7 new barbie dolls for her birthday! She already had five that were still in perfect shape and ALL the accessories, including a motorized jeep that I bought used and in perfect shape. When are we going to wake up and quit indulging the idea that kids have to have every toy that comes out of China? I''m guilty as the next here! But more and more, I have put a moratorium on buying toys for kids.
And cell phones! My God, everybody I know has been through at least three or four cell phones and a $50-$100 cell phone bill every month, plus their land line. When did it become so important to talk on the phone?
The idea is, don''t buy anything on credit, except items that are absolutely necessary. Whipping out the credit card every time you see a new gadget is not the answer.
The fact is the CEO''s of companies in the US don''t give a hoot about what''s right for the American people or America as a whole. Cessna Aircraft Co. is having the new SKYCATCHER Cessna 162 LSA built in China to be sold to Americans. Just more US workers looking for a job.
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