Posted on 03/05/2005 8:50:28 PM PST by drt1
Debate intensifies as Senate considers bankruptcy curbs WASHINGTON - For more than two years, special-education teacher Fatemeh Hosseini worked a second job to keep up with the $2,000 in monthly payments she collectively sent to five banks to try to pay $25,000 in credit card debt.
Even though she had not used the cards to buy anything more, her debt had nearly doubled to $49,574 by the time the Sunnyvale, Calif., resident filed for bankruptcy last June. That is because Hosseini's payments sometimes were tardy, triggering late fees ranging from $25 to $50 and doubling interest rates to nearly 30 percent. When the additional costs pushed her balance over her credit limit, the credit card companies added more penalties...
(Excerpt) Read more at msnbc.msn.com ...
This IS disgusting and the Credit Card Companies need to be better controlled. If you don't agree, please read the article.
Just more of the same liberal victim mentality crap.
If you don't want to pay excessive interest rates/late fees, then don't borrow the money.
That simple.
Absolutely, right on!
Sadly, we'll be reading from some how the poor credit card companies are merely misunderstood, maliciously maligned, and their benevolent services are simply being abused by their deadbeat victims. Ha!
Owens tried for six years to pay off a $1,900 balance on her Discover card, sending the credit company a total of $3,492 in monthly payments from 1997 to 2003. Yet her balance grew to $5,564.28, even though, like Hosseini, she never used the card to buy anything more. Of that total, over-limit penalty fees alone were $1,158.
No, I love credit card companies. I charge everything I can with them. Makes things easy, don't have to carry lots of cash, have recourse if I get in disputes with merchants, provided with a statement of all my spending... and then I get cash back!
Not only that, I can double my cash back to get cool gift cards. This month, I turned a $20 Discover cashback bonus into a $40 giftcard from the Sharper Image. How cool is that?
Oh yeah, and I pay off the balances. Let some other moron pay 30% interest. If they don't give it to the credit card companies, they'll blow it at the Bingo Parlor, Indian Casinos, stupid investments, etc.
My favorite was MBNA. They gave us a large credit line; as the interest rate was cheaper than the bank's, I financed my job re-location with this card. Next thing I knew, my interest rate went from 6.8 to 19.9%. I never had late payment, my payments were always for more than the amount, and were always recieved at LEAST a week before they were due.
Why, you ask? I called and asked why. The loan dept. said that my interest rate was dependant upon how much I used of my available balance. You see, the more you use; the greater the risk to MBNA. So, I paid the amount in full, closed the account, and have requested to be placed on a Do Not Contact List.
I think this behavior should be illegal. I was fortunate in that I was able to pay off the full amount; others will not be so fortunate. If I had been late, if I had over-charged; that would be a different matter entirely. But to simply kick the interest rate up because a person uses the credit limit that the company offered seems preposterous.
Sorry guy...the CC companies aren't her problem. Her problem began way before the first late notice...like not being able to recognize a bad choice in husbands, for instance. Not so much a knock on husbands per se...just that this didn't happen overnight.
Very well said.
let's face it... excessive credit card use is no different than alcoholism...
some people can enjoy a good beer or glass of wine every now and then, while others can't stop drinking until they have literally destroyed their liver.
Some people make great use of credit cards, while others recklessly spend themselves into bankruptcy... but I'm not sure why I should feel sorry for the person who spends money like a drunken sailor while I go on spending modestly and within means. WHY is their unsound financial practices MY problem?
They shouldn't be allowed to troll college campuses to hand out credit cards to students who are unable to pay back the loans. My friend ended up paying about $500.00 for stuff that originally cost about $150.00 to begin with. But her daughter didn't understand the importance of paying exactly on time and incurred outrageously high penalties and quickly increased interest rates. So that by the time her mother found out about it was over $500.00 to buy the whole thing off.
Isn’t that loan sharking? I thought that loan sharking was against the law.
Loan sharking:
When a borrower is charged interest above an established legal rate. Depending on where you live, lenders typically cannot charge more than 60% interest per annum.
http://www.investopedia.com/terms/l/loansharking.asp
50% markup is plenty.
He's a life saver.
What are you talking about??? I suspect you don't understand my post.
A lot of people are living in credit cards, home equity loans etc. to make ends meet. It'll be interesting to see what happens with the new law. My guess is that they'll be a flood of Chapter 11 filings followed up by a tightening of credit. Banks will end up taking the hit.
In a 30-year history, I've never had a late payment or missed payment or bankruptcy. But let me tell you what happened, with a credit card company.
Many of them have a way of letting your payment sit around in the joint before "processing" it. Your due date could be the 15th, you mail on the 8th or 9th, they say it didnt' get "posted" till the 17th. Voila, late fee!
I actually overnighted payments so I could prove they were getting there on time. Did they recieve them the day I said they got there? Yes. Ah, but they were "posted" later. More late fees.
With every late fee, my interest rate was upped. After all, they have the right to do that...if you're late.
After nine months of this horsecrap, and with the interest rate at 26%, I just paid the damned thing off in full. (And yeah, they squeezed an extra payment out of me, because my certified check, which was overnighted...you got it...didn't get there in time). Paid it off, goodbye, close this account.
The phone starts to ring. You're such a good customer, we'd like to lower your rate--to 9%!
Some of them (most of them?) are truly predatory. Talk to people who've worked inside these places. The attidude is adversarial: How can we GET these people to pay more? And the managers are incentivized to extract every cent possible. Ethics get lost in this.
As for your "then don't borrow the money"...well, if it weren't for credit, America would be as prosperous as the Ukraine. I exaggerate, but this country runs on credit, shor-term, long-term, whatever.
You must have a very pleasant life. All you need is one catastrophic illness that costs you a few hundred thousand dollars more than your insurance carrier is prepared to cover, or the loss of a job, or a divorce. I got into credit card trouble when my husband walked out, leaving me with two young children at a time when I was too sick to work and could not legally sell our house. I had to charge food, gas, and utilities. I later worked like a demon but still would never have gotten the debts paid off if I hadn't gotten a chunk of money. Now I'm down to one card that still has to be paid off and I'm making progress, but Citibank isn't making it easy. I'm not sure I'll ever be able to pay off a problem that was incurred years ago.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.