Posted on 10/25/2005 5:47:47 AM PDT by TXBSAFH
The number of bankruptcy filings made before a tough new law went into effect on Oct. 17 caught even the credit card issuers who supported the law by surprise.
(Excerpt) Read more at nytimes.com ...
By ERIC DASH
Published: October 25, 2005
For more than eight years, big banks lobbied aggressively to make it harder for consumers to file for bankruptcy.
Now that the new bankruptcy law has taken effect, was the investment worth it? The early data suggest that sometimes, you have to be careful what you wish for.
Bankruptcy filings were supposed to snowball in the months before the tough new law went into effect on Oct. 17. But the avalanche of petitions, and the lines of debtors streaming out the courthouse doors caught even the credit card issuers who supported the new law by surprise.
In recent days, the five biggest bank issuers of credit cards have said that the unexpectedly large flood of filings shaved hundreds of million of dollars off their earnings in the third quarter.
But with tens of thousands of petitions still being processed and Hurricane Katrina's impact on cardholders still being sorted out, the bankruptcy rush is likely to result in well over a billion dollars worth of losses by the end of the year.
Heard on CNBC that Capitol One got hammered. That didn't surprise me, since they were one of the most egregious companies in sending out unsolicited cards. My prediction is that far fewer people will be using credit cards with the new credit laws in effect, and that all the credit card companies will be hurting next year.
Hee Hee Hee! Aw, poor little bankers lost more money than they tought they would? Good...
And they're surprised because.....?
My wife and I use our cards only for the points. We pay them off every month. It is the only way to go.
A billion dollars is peanuts to the credit industry. Check out, if you can, how much Visa and MC make from just clearing the credit card transactions alone.
That'll pale in comparison to their losses in the years and decades to come. You get what you pay for, now get used to it. Blackbird.
Gee, maybe they should've thought about all this before they started issuing credit cards and loans to anybody, everybody and all the pets too.
Congress passed a law many years ago that if you received an unsolicited card in the mail you could not be held liable for the debt incurred.
Not really. Studies show that if you use a credit card, you will spend about 15% more than if you use cash.
My wife and I have been discussing doing the same thing. We have been cash flowing everything and not charging or dipping into savings. Any suggestions on a good card to use?
Her sister does this with a Delta Sky Miles card issued by AMEX. But I'm a little concerned since AMEX is not a universally accepted. Plus, I don't want to pay the fee.
I know a guy who works for Chase Card now and he has been known to feel guilty for what he does. Not that guilty though.
Yeah, a lot of them get what they asked for. They just send these pre-approved cards out to anyone, then complain about non-payment.
>>>My wife and I use our cards only for the points. We pay them off every month. It is the only way to go.<<<
Absolutely.
It is soooo easy to spend using a card. I am surprised it's that low. We have one card and pay it off every month. I also keep track of it online to keep up with our charges and make sure no one has gotten hold of our number. (Through charges I know we haven't made)
I'd go with one with straight cash back. A lot now offer 2.5-5% cash back at Gas stations and grocery stores. I know Citi and Chase do.
"improving collection was beside the point"?!
Putting the spin on this bad law. "It will make matters worse, but it is for the sake of fairness and honesty!"
Yes but those 'points' cost the retailer 5% or so, so in the end you are paying a the price for those points in the form of higher prices. But there is not much you can do if most other people are using them.
My wife and I play them off against each other. We both have two platinum cards each, in our own names. When CITI is charging me 14% and Chase calls her and tells her she can have 9%, I call CITI and threaten to move the card. They always cave.
Currently, she has one Chase card with 0% for 12 months and I just got an offer from CITI for 2.9% balance transfer for the life of the transfer.
I think the max we pay on any one card (with a balance) is 4.9%.
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