What is Digg?196 Comments
- GetItBuilt, on 10/22/2008, -9/+61CREDIT CARD COMPANIES = EVIL
- agoailam, on 10/23/2008, -7/+52Except the ubiquitous and arrogant "If you can't pay now, you don't need now" argument does not hold water. I'm tired of seeing it. There are plenty of examples of when opening lines of credit is acceptable. Vet bills, school bills, job-related expenses, etc. How about people be responsible with money PERIOD
- 5xSTUN, on 10/23/2008, -5/+42It's hilarious to me how the banks try to fight legislation of this kind.
It's like a bunch of ass-rapists lobbying to block legislation requiring them to use lube when they ass-rape people. - captainanndor, on 10/23/2008, -1/+32That's great ideology for 'want' consumerism.
But credit cards are useful for when you need to spend money and don't have it right now.
My brakes needed replacing, but I didn't have $500 cash on me right then. Work is too far to walk, the bus doesn't run at times that would get me to work at a reasonable time, and cabbing it would be wasteful. So I used a card.
Or if someone's kid gets sick and is uninsured. If you're already on a tight budget, you're probably not going to have a couple hundred dollars on hand to pay for the visit, pay for bloodwork, pay for medication, etc.
I realize these are examples that don't fall under the irresponsibility that is causing extreme debt, but the whole "if you can't pay it with cash right now, you don't need it" is a flawed argument. - cards, on 10/23/2008, -2/+30We don't need to teach everyone to stop using credit cards. We need to teach them to use them responsibly. I put *everything* other than my house payment on my credit card. Am I in financial ruin with debt piling up? No, I pay the full balance every month, pay zero interest/fees, and actually earn 1%-%5 cash back on every dollar I spend. This responsible use of credit has also earned me an exceptional credit score, which gives me access to loans with good interest rates, even in these tough economic times. The extra cash back and high credit score are benefits I wouldn't have if I followed the "just cut up all of your cards" advice.
- ohearn, on 10/23/2008, -2/+26Because if they taught people that borrow and spend was a bad policy, the voters might wisen up a bit to what the government is doing.
- pintomp3, on 10/23/2008, -1/+22how dare you get cancer and have your health insurance canceled. medical bills are the number one reason for bankruptcy in america. once you move out of your parents basement, you will see life is not so cut and dry.
- vtnerd, on 10/23/2008, -1/+21This isn't forcing credit card companies to give credit to undeserving people. It's just limiting the credit card companies' ability to screw those people over when they miss a payment.
I'm a die-hard free market fan and I'm not sure how I feel about this law, but I don't believe this law will encourage reckless lending in any way. - krellor, on 10/23/2008, -1/+19Credit cards aren't bad, but are poorly used. I pay off my balance at the end of the month. So why do I use it? Rewards. I just used my reward points to setup a hot air balloon trip for me and my wife, something I wouldn't have spent money on left to myself. We are very frugal, and if we can accrue reward points to buy little luxuries while buying groceries or fixing the car, without leaving a balance on the cards and having to pay interest, it is like getting free gifts from the credit union. However, it is hard for people to live well within their means, and when people have high credit limits they tend to find ways to justify filling it, or just don't pay attention to how it adds up, or how interest work. When I finished college I had some credit card debt and it took a while to pay it all off, on top of my student loans, but once I got over my apprehension of using a rewards card, things worked out quite well.
- nupr, on 10/22/2008, -0/+14This is only news on MSN blogs? That would be like a the bailout news only being on Digg. Thanks for the article.
- scottc, on 10/23/2008, -1/+15The proposed law removes many of the predatory practices of the banks, thus making it harder, not easier, for people who don't know what they are doing to go into debt. In fact it will make it harder for people like me too, because many of those low interest teaser rates will disappear once they can no longer be subsidized by borrowers who default or who get caught with a large balance at the end of the promotion.
It's good to be a skeptic, though, particularly regarding anything Congress does related to banks. - Thuktun, on 10/23/2008, -1/+14This prevents predation on the part of credit card firms. Currently, they can bait-and-switch you legally. That is, they can temp you to sign up with nice rates and perks, but suddenly drop the perks and raise your rates at a whim, usually when you're most vulnerable, putting you in a position you can't easily get out of.
- pintomp3, on 10/23/2008, -1/+14good. universal default should be illegal. you should not be able to retroactively change the price of a product once it's sold. they also need to overturn the bankruptcy bill of 2005:
http://www.consumeraffairs.com/news04/2005/bankrup ... - Knowltey, on 10/23/2008, -0/+13Go try and buy yourself a house mi'lord
- Wookie, on 10/23/2008, -0/+11credit card companies aren't evil. here are three simple rules for not getting screwed:
1. only keep one or two credit cards. the more cards you have, the harder it is to keep track of them all and the more likely it is you won't be able to pay them off at the end of the month (see point 2).
2. don't ever carry a balance, pay off your card each month. if you can't pay cash for something, you don't need it (except for emergencies).
3. don't ever get a credit card that has an annual fee. there are enough cards out there without annual fees that you should never pay money just to have a credit card.
as I said, credit card companies aren't evil. most people are just dumb. - AtraNoxVII, on 10/23/2008, -0/+11It's just a bill...
Just a bill, sitting on Capitol Hill. - lisaawesome, on 10/23/2008, -0/+10It's really awful when so many things go wrong at once that even with some savings you have to use a credit card to cover everything. That was me a couple months ago. ***** week from hell I tell you.
- pathouston22, on 10/23/2008, -2/+12More like, people who don't know how to manage their finances = stupid.
I've been using credit cards since I was 16 (co-signed with my dad), never had a late payment. - shredswithpiks, on 10/23/2008, -0/+10I said this to someone in a thread above this one... but if everyone used a credit card like that those kinds of rewards and incentives wouldn't exist. The only reason you can get 5% back is because a bunch of other people are paying 20 or 30% interest every month on bills they can barely afford to make the minimum payments on.
Credit card rewards sound nice, and maybe *you* can manage this stuff, but for the vast majority credit cards are a trap and will keep them poor their entire lives while they pay exorbitant interest rates back to the credit card companies. Statistically the credit card companies have to be making much more off of interest than the 5% they give back, otherwise they wouldn't be doing it.
The consumers as a whole are not going to win with credit cards. That's not a game we should even look at playing, in my opinion. - lisaawesome, on 10/23/2008, -0/+10What a wonderful analogy to start my day off with.
- debtman7, on 10/23/2008, -0/+10Looks great, but the bill says it takes effect one year after passing. I suspect during the next year, credit card companies are going to start scrutinizing accounts and jacking up rates to get them in before this takes effect...
- shredswithpiks, on 10/23/2008, -2/+11You are an anomaly. The vast majority has no idea how to manage a credit card the way you do, and if they did credit card companies would be on the losing end of the deal and your reward programs wouldn't exist.
Morally, I can't justify the rewards from a credit card knowing it was payed for by 10 other people who are getting gouged on high interest rates on debt they used to buy crap they didn't need because of our American culture of "lol stuff yay!!!" - vtnerd, on 10/23/2008, -0/+8I kind of agree with you shreds, but at the same time the stuff you're agreeing to is presented to you when you sign up. If people are getting gouged, it's their own fault. And I'm speaking as someone who got gouged pretty good...I carried high balances and paid the minimum as a student. I lived with my gf and son. My gf lost her job and my son got seriously sick (hospitalized for two weeks) and we were in a world of hurt (he did have insurance). My school got all messed up and graduation got farther and farther away.
I don't have any credit cards now and my score is shot to hell, but it's nobody's fault but my own. I wanted new this and that and justified it by saying I would pay it off as soon as I graduated and that it was only for a few years. I didn't foresee the future and it bit me in the ass. I'm back on track to graduating and the debt is being paid off. But I will never use credit recklessly again. - PGPirate, on 10/23/2008, -2/+10This /seems/ to be one of the best bills to come out of congress since the Do-Not-Call law.
Hopefully there isnt random earmarks in it. - Pyehole, on 10/23/2008, -25/+33I've got a better idea. How about people be responsible with money and only spend what they have? If you can't pay for it right now, you don't need it right now.
- cubicledrone, on 10/23/2008, -5/+13Sounds great. Now try it when you get laid off every six weeks.
- jbcsee, on 10/23/2008, -0/+7I have over $50k in revolving credit. I rarely use more then $10k a month and I almost always pay it off before accruing interest (I've paid $28.32 this year in interest because I had a medical emergency in the same month that I bought a new toy and I didn't want to terminate a CD early to pay off my CC bill). So personally I think I'll keep my credit cards, so that my savings can keep earning interest while I enjoy whatever I chose to buy. I'll also keep enjoying the free extended warranty I got. The better protections I get. Oh and the free trips I get from time to time.
However, you keep saying credit is bad because you don't know how to use it. - roddack, on 10/23/2008, -2/+9@cubicledrone
The reason the economy is ***** has nothing to do with wages but instead it is because very liberal monetary policy which has done nothing but destroy the dollar via inflation and at the same time creating the so called "business cycle" while also allowing the government to spend like drunken sailors. - domenics, on 10/23/2008, -4/+11+1, getitbuilt.
If we only purchased what we could afford in cash (with the possible exception of a car and a house), we'd make it further than we think.
"BUT WAT ABOUT EMERGENCIEES LIKE MY CAR BREAKS DOWN LOL? I NEED CREDIT CARD FOR TAHT!!!!" is the most common argument I hear. But guess what, if you didn't overspend and actually (gasp) saved money, you'd have a fat load of cash to fix your car with.
And if your family did the same, THEY'D have a fat load of cash to lend out in a true emergency instead of being mortgaged to the eyeballs in revolving debt.
Time to revolt against credit card companies, imo. - Thuktun, on 10/23/2008, -2/+9Please note this part:
"Over-the-limit transactions. This is where common sense and sunshine break through the dark clouds of consumer credit. Today credit card companies charge a fee if you go over your credit limit. The problem is that they let you go over the limit. Rather than rejecting a transaction that would cause you to exceed your available credit, the credit card companies approve the transaction, and then whack you with a fee."
Curiously, most credit card companies will let you go over by ONE TRANSACTION, then will DENY ALL SUBSEQUENT ONES after they've already assessed you a fee for going over your limit.
Tell me that's not predatory. - alias983, on 10/23/2008, -0/+6What sucks is people who budget a save for the things they want to buy and don't use a credit card are screwed when they try to get a loan from the bank. How did credit become more powerful then cash?
- cards, on 10/23/2008, -0/+6Please read the second sentence of my post. You're admitting that the problem is that people don't know how to manage their credit. Let's fix that.
Also, credit card companies don't make all of their money from interest and fees. They also make money on every single transaction where someone uses their card. The places you shop are footing the bill, because they've determined that giving you the convenience of using credit makes you more likely to purchase. So yes, credit card companies would still be in business even if most people learned to use their credit responsibly. I must concede though, you're right that the incentives would be smaller if everyone used credit this way. - Thuktun, on 10/23/2008, -4/+10If you can't afford
* to fix the car you need to get you to work
* to fix your house because of bad weather damage that's not expensive enough to meet the deductable
* to pay for medical care that your crappy insurance won't cover or is before your yearly deductable has been met
* to buy food when money's running low from buying gas
then you clearly can't afford to live? Suck it up? - roddack, on 10/23/2008, -1/+7There is nothing wrong with a credit card as long as you understand how it works. Really the best thing to do is just keep a small amount on it or ideally pay it off every month so you can build up your credit score. Keeping it around for those Oh crap situations is a valid reason to have one. Because you know cash sitting in a bank account is doing nothing useful and if instead you invest it at lest then it will grow how ever it won't be as liquid so in that case the credit card is easily used to just fill the liquidity gap.
So no credit cards are not evil stupid people with credit cards however are a problem. But then again that is more of a failing of a basic education than anything else. - Thuktun, on 10/23/2008, -2/+8Strawman argument. Regulation does not imply hiring new people to monitor and enforce.
Regulation usually a legal framework for local, state, and national attorneys general to bring lawsuits to stop the proscribed actions. That doesn't mean more bureaucracy is needed to make it work.
Why can't there be both? Like good medicine, combat the symptoms *and* take up measures to reduce the underlying need. Black-and-white approaches seldom work as well. - Recidivus, on 10/23/2008, -0/+5Pay it BEFORE you go on vacation? It's not like it was some unforseen emergency that prevented you from dealing with it, or did they change the due dates while you were away?
- justjoehere, on 10/23/2008, -0/+5When you use knowledge as a weapon to prey upon the less educated you are morally complicit in exploiting them. No two ways around it. That is what credit card companies do. Their legalese is way above the average person's ability to understand reasonably the terms.
- Recidivus, on 10/23/2008, -0/+5"Their legalese is way above the average person's ability to understand reasonably the terms"
18-25% interest is not legalese, it's pretty basic math. If you can't wrap your head around that, then you shouldn't be applying for one. What else do you need to know? If you use your card, you will pay more than the original purchase price.
And @ Moose:
Those wonderful benefits from using CC's is the reason there are fees, high interest rates, and other ways to get more money from the card holder. Take away the bad stuff, you'll lose the good too. Seems people want the bad stuff taken out, but still want all the benefits it pays for. - pintomp3, on 10/23/2008, -1/+6the product you purchased from the credit card company is the credit. you bought it at an interest rate agreed to at the time.
- inactive, on 10/23/2008, -3/+8American banks are the worst when i come to anti consumer Credit card policy. And Citibank is the absolute worst of them all. Thats why i only have HSBC and Duetche Bank Credit card. Citibank bastards would send back my payment cheques for the stupidest reasons just so they could charge me a late fee. Good god i got rid of them fast. Any non American credit card company has good support and i have gotten the best response from HSBC who have on many occasion reversed any late fee or any other such ***** charges. Citibank on the other hand had some of the worst reps ever and it was almost impossible to get anything done. Only good thing about it was that it was accepted 99% of the time. The HSBC one had issues 1 out of 10 times.
- VeryBoredNow, on 10/23/2008, -0/+4::buzzes in::
What is 'wrong' - nebbo, on 10/23/2008, -8/+12Instead of spending tons of money attempting to implement and monitor this type of legislation, why not just start "don't use credit cards" educational programs?
- cquinnd, on 10/23/2008, -2/+6The system of Fannie Mae / Freddie Mac / FDIC had nothing to do with the practices that "made it too easy for loaners to loan bad loans and for house purchasers to borrow to much"...
The mistake was relying too much on the early stability of Fannie Mae / Freddie Mac / FDIC when it was becoming obvious that bad investments and unethical business practices in the real estate and investment banking markets were going to cause a blow up that was bigger than those organizations were designed to handle.
You'll notice that the credit card companies don't seem to be suffering too badly from a mess that by all consideration should have impacted them just as hard as it has on the regular banks.
- justjoehere, on 10/23/2008, -0/+4@atranoxVII: Dugg for SchoolHouse Rock Reference. I think kids today would benefit from those airing again.
- omgwtflawl, on 10/23/2008, -0/+4Uh, if you don't like the way credit card companies treat you, why don't you not use their services? This bill is just going to make credit more expensive for those of us who know how to use it responsibly.
- runderwo, on 10/23/2008, -0/+4http://clerk.house.gov/evs/2008/roll623.xml
This doesn't have anything to do with the financial markets. It is a business regulation that will, in the end, make credit less available and more expensive. Expect a decline in 0% offers, less ability to get a card after bankruptcy or after taking out a major signature loan, and overall higher interest rates.
This the same kind of reasoning consumer protection advocates use in order to regulate payday loan outfits out of business.
Are consumers really better off with less choices? I don't think so. I want more choices. I don't want the government managing my financial risks for me in order to protect me. I don't need protection from the consequences of my own decisions, because I'm an adult. - BlindDefender, on 10/23/2008, -0/+4In my opinion... The existence and use of credit is necessary to keep financial economies operating smoothly. This is true on both macro and micro levels. If you don't believe me, just look at the worldwide problems tight credit markets have caused recently. However, credit users (in this case credit card users) need to be responsible when using it. Individuals need to understand the terms of these cards, as well as consequences of irresponsible use.
The way it is now, credit card contracts borrowers are shown are incomprehensible to all but an expert; they are written in fine print that is hard to understand, frequently ambiguous, and include hidden unfair policies. In many cases, customers accept card offers over the phone, without actually seeing the contract; they are mailed along with the first statement. Financial experts in the banking industry are basically taking advantage of their ignorant customers. Average consumers don't stand a chance. Something needs to be done about it, and that's what this bill is about.
I say it's about time! - cubicledrone, on 10/23/2008, -4/+8Did it include the right not to be charged 293% interest? How about funding for some basic financial education for people? You know we're supposedly a capitalistic country yet probably 90% of our population doesn't have the first ***** clue about money. Maybe if we fixed that we wouldn't sign up for 293% interest?
- trollick, on 10/23/2008, -1/+5If you hate credit cards so much DON'T USE THEM
- subliminalurge, on 10/23/2008, -0/+4I've had weeks like that, too. Early this summer the transmission in my truck shot craps on a Saturday evening, my water heater died on Monday morning, then on Wednesday night we had to travel for a family emergency, racking up over $400 in gas and two days of lost wages for each of us.
Fortunately, I had some money saved in an emergency fund and was able to cover all of it, but that fund is now depleted and it's taking a while to build back up. If my furnace kicks the bucket this winter, I'm screwed. -
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