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 ...
It is not easy to pay off credit cards. But, do it and don’t use them anymore.
At least on cars and mortgages...they say "in the last 7 years..." So if you say "no" because it was 15 years ago...you're telling the truth, as it wasn't within 7 years. Employment apps are a different story. However, it's generally one's performance and profile in the years since that most employers are worried about.
Thanks for playing. Everybody loses (except the Saved, of course), so don't feel so put upon.
Good for you!
I owe about $5210 on credit cards. That should be gone by year’s end.
You're right. Bad stuff happens even to those who are prepared. But far too many people are too shortsighted to prepare at all. A buddy of mine recently had to take out a payday loan to cope with a $150 doctor bill for his daughter. That loan cascaded into nearly $500 per month payments on a half-dozen payday loans.
So he got that all straightened out and what did he do? Did he build up a $1-2000 emergency fund? Nope. He bought a shiny new(ish) dealer-financed SUV.
He and many (most?) others have no plan whatsoever for dealing with financial emergencies.
Moonman - bankruptcy doesn't get you out of debt. It just restructures it. You'll still end up paynig most of it back.
In many cases, yes, but not all. While bankruptcy had been a bit too easy for some in recent years, there is a reason it was specifically put in the body of the Constitution.
Money order?
Just wait till someone tries to claim you never paid them. Then try to prove it.
Checks are better for that reason.
Yes, but as they are saving, they're losing the 5% spread.
Assuming you're starting from a level of normal means, you WILL make more borring at 5 and investing at 10, than taking what would have gone to pay the interest and principal on the 5% and investing that instead, because you're starting from a much smaller basis.
Really? I have lots of credit card debt. As long as they’ll loan it on cheap terms, (i.e. 2.9% for life, etc.), I’ll borrow.
Yes, and the reason was solely to ensure that the laws were "uniform". There is no mention of favoring lender or debtor or letting people off the hook because they over-did their home electronics purchases.
When people talk about “borrowing” money out of desperation when they aren’t able to pay it back it is very close to stealing. The whole issue I brought up is “can you afford it?” If you pay it back you can afford it. Not necessarily wise to borrow at outrageous rates even if you can pay it back.
And eventually we the taxpayers are going to be on the hook for these kind of people.
It is stealing. Perhaps not 'theft' legally but it's stealing and is dishonest.
About the only theft I can personally excuse is stealing food, and then only in the most dire of circumstances (by that I mean if I catch you stealing food from my house, I'll probably bag some up for you and send you on your way. If I catch you stealing my TV you're getting a bullet in the chest).
BUT there is no excuse for stealing even food in the U.S. - there is no shortage of free food for those that need it.
Yup. Even worse: These people aren't prepared for retirement and never will be. I predict a "wealth tax" will be enacted in the next 30 years so we can use our saving to make sure they can have TVs, cars and vacations in retirement.
This is simple-minded. I am reminded of a piece of advice with which my secured transactions professor would always caution us:
If you borrow $1000, it is your problem. If you borrow $1,000,000, it is the bank's problem.
Truer words never spoken.
Depends on the chapter. Chapter 7, for instance, discharges debt.
I know, but few people qualify for a complete discharge anymore. If you make more than your state's median income, you'll be paying your creditors back.
How true. I worked for a company that was OK financially although they had a relatively large bank debt. Our group got a large contract with prepayment for R&D expenses. The idiot finance VP took that money and paid down the bank debt. We had no R&D money and then became a target for the bank and ended up in bankruptcy.
For twenty years I have never had a problem because I save the receipts. What’s so hard about that?
I also don’t have to balance a checkbook or worry someone is going to use my checks or wonder where they are.
Remember, I only use the money orders for things I can’t use a debit card for the very rare opportunities to buy something I can’t buy locally.
For purchase over five hundred dollars, I use a bank certified check.
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