The credit card industry is a piece of work. After spending more than $100 million lobbying Congress for tougher bankruptcy rules, the industry is sending card offers to those who declared bankruptcy just before the new law went into effect this fall, The New York Times reported. The reason is that it is now harder for those people to discharge their debts, because they can’t declare bankruptcy again for another eight years, according to the law. Consumers need to be accountable for their spending, but lenders need to stop passing out credit like it was candy.
Posted by Phillip Brownlee
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28 Comments
It really ticks me off the way they extend credit so easily to young people, who are often impulsive and lack the maturity to handle credit correctly.It’s almost like indentured servitude, spend to the limit, then because of the obscene interests rates, spend the rest of your life trying to pay off the debt.
Ain’t it the truth! I don’t do credit cards. I got into trouble with them back in the 70s and it took YEARS to get everything paid off. I haven’t owned a card in 15 years. The thing that really pisses me off is, my mailbox is full of credit card offers. I save the prepaid return envelopes, fill them full of trash, and send them back. They stiil send offers. I even mailed back 1/4 inch thick steel plates to make it more expensive, and still I get the damn things. It does no good to call and tell the credit card companies to quit sending the offers.
Blood-sucking leaches!
What’s worse is they have plenty o’ friends in Washington, and the recent bankruptcy bill shows.
How much is the USA National debt now? Trillions of dollars? Who will pay it our kids? To who? Will China own them?
How much is the Iraq war costing Americans? Was Haliburton and VP Cheny paid 600 BILLION to re-build what we keep blowing up?
Just what debt are we responsible for? Our own? or Our nations?
I have never owned, nor plan on owning, a credit card. People say you need one to build credit.
Nah! Just a scam. You can build good credit by just paying your utility bills on time. You don’t need a credit card.
Another thing to be afraid of… Have you seen how many Payday Loan places that popped up all over town? They’re everywhere, and those are worse than credit cards.
Living in the red has become an American way of life. It’s about materialism and our inability to delay gratification. It’s so tempting because credit cards make it painless to spend money, then the pain comes when people are in debt over their heads and the least little financial setback puts them over the edge. It’s a situation that can snowball so easily.
once again the victims are out in full force….the borrower is slave to the lender. but the lender is in FULL control of that servitude. It is amazing how you will consistently defer responsibility to anyone but yourselves( these same people advocate legal drugs)…ha!those who abuse credit are simply grown children who don’t have the patience to wait, save and pay for it like grandma would have done it. people want it now, and they don’t care how much the COST, only what the monthly payment is. I could care less if these grown children have to go bankrupt before they learn basic mathematics. And I don’t blame a company for making money offering what all the grown children want, stupidity is a valuable commodity…..oh wait…I forgot you dont believe a free market exists.
DR–When you open a can of green beans, how do you know it’s not full of botullism toxin? Are you trained in chemistry and do you test everything you eat?
When you get on an airplane, how do you know the engine was properly serviced? Are you an aeronautical engineer and would the airline company give you access to the plane you’re travelling on if you were?
People need gov’t protections from predatory corporations who use their power and knowledge to take advantange of people who don’t and can’t know what the corporations know.
A lot of people are just ignorant of credit card rates. Twenty percent per annum used to be illegal usuary, not it’s a competative rate.
Because people are ignorant about credit (like you and I are about airplane safety and food borne pathogins) doesn’t mean they should be fair game for predatory credit.
It’s society that is hurt when people are taken advantage of in that way–not just the poor schmo who got ripped off . . .
Joe Williams,
You are right – those PayDay loan, and Cash-for-Car-Title places are cropping up all over town faster than mushrooms after a rain!
Unfortunately, the media has been ignoring this troubling story. These places exist to enslave poor people. Mainstream banks are partially responsible for these PayDay places, because they loan the money to the PayDay lenders.
If there were any decent investigative reporters any more, they would be jumping all over this pathetic story!
Do you know what these loaner’s APR is? On average 400%! A person would be much better off getting a loan from the mafia.
http://www.ftc.gov/bcp/conline/pubs/alerts/pdayalrt.htm
galahad, now I know why you cant find a job in the free market that you dont believe in…..you cant, and therefore don’t expect anyone else to be able to add and multiply decimals ( I expect you can pull off whole numbers)
just add up the payments man!
More power to the pay day loan places…..I say if they can get away with 1000% intrest, good for them.
My wife died over 16 years ago, and they keep sending her pre-approved credit card offers- got 3 in yesterday’s mail. Of course, being dead, she’s not run up a lot of bills lately, so I guess she’d be a pretty good credit risk.Credit, used moderately, and with reasonable interest rates, is a good thing. It allows us to get the more expensive things we need at the time we need them, and allows us to get through difficult situations without having to liquidate assets.Used the way the credit card companies do everything they can to encourage, and combined with the new bankruptcy laws, credit becomes the modern form of slavery!
People who get payday loans are unable to get credit cards or loans from reputable banks. So, who do you suppose that leaves? Poor people, stupid people who are not poor, or maybe poor and stupid people.
I am sorry, I don’t agree that if someone is poor and/or stupid that this amounts to a valid invitation to rip them off. It is not right. Period.
I suspect that there might be an uncomfortable place in hell for PayDay lenders, and some bloggers here had better hope that there is not an uncomfortable seat right next to them for their cheerleaders.
dr = dumb republican?
Who said I don’t have a job? I have a great job doing exactly what I want to do.
In other words, it ain’t Wal-Mart.
I have two credit cards which I pay off every month, I have a house (paid off) and a 2005 car which I paid cash for.
But just because I know how credit works and how to beat the bastards at their own game, that doesn’t mean that I think other people who don’t understand it should be screwed by powerful corporate interests.
Which makes me different than conservatives who apparently WANT people to get taken advantage of.
BTW, good post, Steve-E.
Galahad,Ain’t it the truth?I too, keep my card paid up, and paid cash for my pickup, but I spent a fair part of my life below the poverty line, and I’ve seen all the ways the poor get ripped off!Dr and his republican buddies consider poor people fair game. If somebody did to him what he advocates doing to the poor, he’d be howling bloody murder! Is turnabout fair play?
rip-off? define rip-off? See you libs have associated offering a service to consumers as ripping people off. according to you, everyone from wal-mart to exxon/mobil are ripping people off, according to you, anyone who makes a profit is ripping people off. The consumer is not a victim.ALL buisness, ALL of them! Including pay-day loan offer a product or service at a PRICE people are WILLING to pay. ignorance abounds not due to the lack of information, or exposure to the truth. It does not take more than a 6th grade level understanding of math. Ignorance exists in these matters because of will and the lust for consumer goods in a materialistic world!
You know dr,I think in your case, market forces would definitely work. A person would have to be suicidal to do business with you more than once. And if someone completes suicide, oops, there goes the amoritization plan.
A 400% APR is a RIP-OFF!!!
There is no such thing as a completely unregulated market, and even GW Bush would not want one. Nor, is there such a thing as a completed regulated market. A blend of the two generally works best.
I think a $20 or $30 fee for a 1 week $500 cash advance is not unreasonable. and that cost is made quite clear to the consumer.
If they dont come back and re-pay the loan when they gave their word to, the rate continues! It is not meant to be a 5 yr loan to buy christmas gifts on.
dr,The situation you describe would not be too bad especially for you and me who could afford this, but the people taking these kind of bad loan deals can’t afford them. I know, I know, then they should not take them. And I don’t think it is fair to say that it is always just greed that causes people who can’t afford to borrow to turn to these lenders. Sometimes people need money fast to fix their car to get to work and continue working in their low-wage job to continue just getting by.
Actually, these lenders usually charge $15 dollars for every $100 loaned. So the charge on the use of one week of the $500 you mention would be $75 not 20 or 30 dollars. Fail to pay ‘em back and it is another $75 for the same 500 bucks – due at the end of the second week. Then we’re talking about $150 of interest and in the 400% range I was talking about.
I am sure these are bad deals for the consumers, and I have a hard time seeing how they are good deals for the lenders.
These are very lucrative businesses, however. I read where the people who opened up Blockbuster, and then sold it — started a national chain of PayDay loan shops. They are not going broke from what I read.
I just think there has to be a better way. The federal trade commission advises staying away from these lenders. I understand the lenders are required by law to tell the borrower how much the APR is on the loan. Some people are just desperate and I hope I never get in that position.http://www.ftc.gov/bcp/conline/pubs/alerts/pdayalrt.htm
Steven,Good points. When I was first married, we moved to a different state, got caught up in a disasterous job market, and ended up having to get a quick loan at a ridiculous rate. Legal loan sharking is what it is. Getting it paid back was worse than the loan itself, but we managed. Thank God that will never happen again. (knock on wood).
It really should be made illegal, but I doubt it ever will be. People who are out of work, work for minimum wage, get hit with major medical bills, etc, are all susceptable to these sycophants. It would be really nice to see things change in that regard.
JM,My points exactly. Thank you.
I agree, these places take advantage of those who are desperate. In a perfect world everyone would know how to handle money, have a great job, and never find themselves in financial stress. All of us have been there and done that at some time in our lives. Often it’s how we arrive to where we are now, smarter and wiser. Lessons that stick with us are the ones learned the hard way.It still doesn’t give the right for these greedy companies to take advantage of anyone just because they’re down. They should be regulated so that they can’t suffocate the ones they claim they’re providing a service to.I’ll admit I love to run up the credit cards and I don’t always pay off the balance each month. I don’t resist temptation very well and I have no one to blame but myself. But, I also have the resources to get out of debt if I need to. For others who don’t have a safty net, it’s a dangerous way to live.It’s my New Years resolution to quit spending and pay off my cards. After that I’ll just run them up again! It’s been part of my attitude ever since I survived cancer. Life is too short not to have everything you want!!
In an earlier post on the subject of PayDay Lenders I made some disparaging remarks about investigative reporting. Deb Gruver’s excellent article on this subject is making me eat my words today – see her story -
http://www.kansas.com/mld/kansas/news/local/13431936.htm
I wrote Ms. Gruver an email thanking her for her good work. When I contact my representative I will now have a link to provide her. It turns out as reported in the above article, some changes in KS law have facilitated the astounding growth of these preditory lending businesses. Maybe that can be changed back.
Sorry, should have been . . .”predatory”
Check out Deb Gruver’s story in the 12-20-05 Eagle. She has some quotes from yours’ truly.Thanks.
It was a great story, she did a good job of illustating how the “easy loan” places take advantage of people who are desperate or vulnerable.
My daughter and grandson have beenstruggling financially after laevingtheir original state for Seattle.Each is starting a new interent business. Just getting started without a sound cusion of money one has a tendency to lean on the credit cards. Unfortunately, they have manyand at times ‘juggle’ them. Recentlyone company raise the interest on one card 27$ for the last 4 monthsunbknownst to them,Put the son in a veryprecarious financial position, hemay loose everythingbringing down the other partner.