Posted on 08/11/2007 6:39:42 AM PDT by Hydroshock
WASHINGTON — A "dangerous cycle of debt" is trapping too many credit-card holders, making it increasingly difficult to protect their financial security, according to a report.
About one-third of cardholders pay interest rates in excess of 20 percent, according to a report from New York-based think tank Demos. Also, borrowers with one slip-up can incur a "cascade" of penalties and end up in a "trap" of high-cost debt, the report said.
"The excuse of risk-based pricing is used to justify everything. These prices go far beyond pricing for risk. Some of these interest rates and payment fees seem to not accurately reflect the risk," said Tamara Draut, a co-author of the report.
Draut criticized practices such as card issuers retroactively applying rate increases. The authors also noted that companies can change terms at will, and that there are no legal bounds to the amount of fees and interest that borrowers can be charged.
"As a result, cardholders often borrow money under one set of conditions and end up paying it back under a different set of conditions," according to the authors.
(Excerpt) Read more at foxnews.com ...
Proverbs 22, verse 7
One simple rule to follow. If you can’t afford it don’t buy it. That would eliminate most credit card debts. It would probably go a long way to eliminating credit card companies.
That was back when there where debtors prisons and before bankruptcy laws.
It was sound advise over 5000 years ago, and it is today.
What if I need to borrow money to buy or fix a car to get to a job?
35 If one of your countrymen becomes poor and is unable to support himself among you, help him as you would an alien or a temporary resident, so he can continue to live among you. 36 Do not take interest of any kind from him, but fear your God, so that your countryman may continue to live among you. 37 You must not lend him money at interest or sell him food at a profit.
No it still applies to today.
If you borrow you are slave to the lender until the debt is paid. The reason you make money is to pay off the debt you owe.
The borrower is slave to the lender!
“What if I need to borrow money to buy or fix a car to get to a job?”
You’re irresponsible and shouldn’t have a CC.
A CC isn’t for the purpose of borrowing, it’s a convienence card.
If you can afford it go ahead. If you can't afford to pay for it don't buy money. Is that hard to understand?
The 25-30% usury interest rates serves the important function of sopping up excess dollars so the fed can keep inflation at about 10%. I expect credit card interest rates to hit 40% or better by 2010.
These two passages tell me all I need to know of the Lord’s few on debt. And it is one of the reasons I am so anti debt. I have enough to answer to before the throne already with out adding this. And liek my Grandfather once said, “Debt is the ugliest 4 letter word.’
Don’t you have a mortgage, servant?
This was even before debtor’s prison, in days when the lender could quite literally sell the debtor or his family into slavery.
That is why you have an Oh Crap fund. In an idea world it would be 6 months bills, mine is 2 but we are working on it.
No. I'll quit the job and apply for welfare.
There is NO positive side to credit card use. You will spend more if you use credit cards. Even by paying the bills on time, you are not beating the system! But most families don’t pay on time. The average family today carries $8,000 in credit card debt according to the American Bankers’ Association
I don’t think most folks up to their eyeballs in credit card debt got there by purchasing the basics like a car to get to work.
What If I already used that fund for crap like medical bills?
Yes sadly, but I am paying extra on my debts to get them paid off. My wife and I have a plan to be totally debt free in 10 to 15 years. We do not care CC balances, we have one car note and are hitting that with 2 payments worth a month. Yes I would love a new jeep, but my current one has on feature a new one would not have. It is paid for. Check out Daveramsey.com
Then you might want to declare bankruptsy and start over.
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