32
   

Does anyone else eschew credit?

 
 
maporsche
 
  1  
Reply Sun 12 Jul, 2009 02:45 pm
@Brandon9000,
People are given the choice to opt of out changes in terms.

It is going to get a whole lot worse in the next 7 months. Thank our Congress for that.
Brandon9000
 
  1  
Reply Mon 13 Jul, 2009 10:03 pm
@maporsche,
maporsche wrote:

People are given the choice to opt of out changes in terms.

It is going to get a whole lot worse in the next 7 months. Thank our Congress for that.

Yes, I blame our congress for putting very minimal, eminently reasonable, weak regulation on people who had been running out of control like mad dogs, ruining peoplse's lives by the millions. I blame congress for enacting the most reasonable and mild regulations imaginable when the average credit card debt in America is about $8,000 per household. It's just like blaming the police for stopping pickpockets.
0 Replies
 
maporsche
 
  1  
Reply Tue 14 Jul, 2009 07:08 am
You're far too emotional about this issue to be objective about it. Carry on with your "let's string 'em up" ranting.
0 Replies
 
FreeDuck
 
  3  
Reply Tue 14 Jul, 2009 07:54 am
@maporsche,
maporsche wrote:

The unintended consequences of this bill is what is biting people in the ass right now. It's like Congress didn't believe the CC executives when they said that based on their current business models, if you enact these rules, we'll have to penalize our existing customers MORE to maintain profitibility.


But their current business model is to enslave people by teasing them into debt and then doing whatever it takes to prevent them from getting out of it, thereby providing a constant and ever-growing source of income for the companies. The mistake the Congress and the Treasury made was giving them such a long time to comply. It's the only industry that is allowed to change the terms on their customers at will. And don't kid yourself about being able to opt out. From our experience, once you've opted out of a rate increase the companies begin using an elaborate set of tactics to force you into a default rate -- like changing your due date without notice and not sending statements. The amount of time it takes to keep up with the trickery is mind boggling. This is not a valid business model and all done in the name of profits is not legitimate. I blame the government not for what they enacted but because they gave the credit card companies time to find new ways to screw us before the laws come into effect.
Brandon9000
 
  1  
Reply Sat 1 Aug, 2009 10:16 am
Credit card debt is now crippling peoples' old age.

http://abcnews.go.com/Business/Story?id=8188463&page=2

Quote:
Close to one in four households now pay more than 20% interest. And households charged late fees paid an average of four fees during a 12-month period.

0 Replies
 
Foxfyre
 
  1  
Reply Sat 1 Aug, 2009 12:23 pm
@FreeDuck,
FreeDuck wrote:

maporsche wrote:

The unintended consequences of this bill is what is biting people in the ass right now. It's like Congress didn't believe the CC executives when they said that based on their current business models, if you enact these rules, we'll have to penalize our existing customers MORE to maintain profitibility.


But their current business model is to enslave people by teasing them into debt and then doing whatever it takes to prevent them from getting out of it, thereby providing a constant and ever-growing source of income for the companies. The mistake the Congress and the Treasury made was giving them such a long time to comply. It's the only industry that is allowed to change the terms on their customers at will. And don't kid yourself about being able to opt out. From our experience, once you've opted out of a rate increase the companies begin using an elaborate set of tactics to force you into a default rate -- like changing your due date without notice and not sending statements. The amount of time it takes to keep up with the trickery is mind boggling. This is not a valid business model and all done in the name of profits is not legitimate. I blame the government not for what they enacted but because they gave the credit card companies time to find new ways to screw us before the laws come into effect.


All that is necessary to correct deceptive marketing/business practices is to prohibit them. Just as pharmaceutical companies are required to prominently list every possible horrible thing that will happen to them if you take the drug they sell, credit card companies should be required to list the the negative side of using credit.

AND. . . . .

Credit card companies should not be allowed to change the interest rate or due date without say six months lead time and the customer should be notified of any impending change in large type on his/her monthly bill for the months leading up to the change.

When there is full transparency in contracts including language that doesn't require a law degree to decipher--something that should be ethically required of everybody--and full opportunity for the customer to know what is coming, and normal restrictions on usurous interest rates, that should be sufficient to protect the people. Otherwise business should be allowed to do business and people should be allowed to be stupid if they insist on being stupid.

Meanwhile those who genuinely would like to protect people from their own stupidity should redouble their efforts on educating people how to use credit wisely, how they can be suckered into unwise contracts, how to protect themselves, etc.
hawkeye10
 
  1  
Reply Sat 1 Aug, 2009 12:42 pm
@Foxfyre,
Quote:
Meanwhile those who genuinely would like to protect people from their own stupidity should redouble their efforts on educating people how to use credit wisely, how they can be suckered into unwise contracts, how to protect themselves, etc.


a few decades back we tried to educate Americans during middle and high school years, but with all of the turmoil and demands made upon education this has fallen by the boards. The current thinking is that glorified full disclosure will work, with the providers of credit being made by law to point out the terms and to say a few words about risk. I don't think that the seller can be relied upon to point out stuff that is not in their interest, I am to cynical about greed to believe that this will happen in any meaningful way.

My current thinking is that mandatory credit counseling is the way to go. Ideally I would like to make everyone go through it, but maybe we can make it so that anyone who gets into trouble would be required to take it. Miss a payment, and either need to take the course or else prove that you have taken one during the last five years....that sort of thing.
Foxfyre
 
  1  
Reply Sat 1 Aug, 2009 12:59 pm
@hawkeye10,
I agree that all but the most ethical sellers will generally not disclose information that is not in their best interest. But if transparency, full disclosure, and fair warning to the customer--i.e. ethical behavior--is made to be in the seller's best interest, then the seller will be ethical. Lawyers have to do it; real estate agents have to do it, mortgage lenders now have to do it, and credit card companies can be required to do it.

I dislike government mandates that are 'for our own good'. I favor mandates that prevent us from misleading, cheating, or treading on the rights of others. I dislike government mandates that require evidence of formal training if such is not necessary to ensure mental or physical competency.

Again, so long as it does not infringe on the rights of others, freedom has to include the ability to be stupid as much as it includes the ability to aspire to full potential.


hawkeye10
 
  1  
Reply Sat 1 Aug, 2009 02:18 pm
@Foxfyre,
you are naive....the work around disclosure is to produce reams of complicated disclosure, because individuals will not work their way through it all to figure it out. Buried disclosure is not full disclosure, is not transparency.

You keep wanting to blame the individuals who get screwed, I on the other hand want to talk about the establishment which as SOP attempts to screw over the citizenry when ever possible.
Foxfyre
 
  1  
Reply Sat 1 Aug, 2009 03:00 pm
@hawkeye10,
You're wrong. I do blame individuals who are fully informed of the risks and take them anyway on the theory that they can beat the odds. As I said, I think it too much infringement on everybody's freedom for the government to presume to protct us from every stupid decision we might make.

I don't blame people who are not informed of the risks and who have no reason to believe that the risks exist.

I do blame the lenders who intentionally obfusicate the risks hoping people won't be smart enough to discern them and especially those lenders who intentionally encourage people to act stupidly.

I don't blame lenders who fully inform the people of the risks, give them adequate information in a manner timely enough that reasoned decisions can be made but the borrowers act stupidly anyway.

I do blame an education system and parents and other mentors for not adequately informing those willing to hear of common risks, how to assess them, and when it is smart to avoid them.

I do blame an education system and parents and other mentors for not teaching those willing to be taught that no contractual agreement should ever be accepted if you do not know exactly what is in it and how to get help so that it is fully understood.
0 Replies
 
Brandon9000
 
  1  
Reply Sat 1 Aug, 2009 03:50 pm
@hawkeye10,
hawkeye10 wrote:

Quote:
Meanwhile those who genuinely would like to protect people from their own stupidity should redouble their efforts on educating people how to use credit wisely, how they can be suckered into unwise contracts, how to protect themselves, etc.


a few decades back we tried to educate Americans during middle and high school years, but with all of the turmoil and demands made upon education this has fallen by the boards. The current thinking is that glorified full disclosure will work, with the providers of credit being made by law to point out the terms and to say a few words about risk. I don't think that the seller can be relied upon to point out stuff that is not in their interest, I am to cynical about greed to believe that this will happen in any meaningful way.

My current thinking is that mandatory credit counseling is the way to go. Ideally I would like to make everyone go through it, but maybe we can make it so that anyone who gets into trouble would be required to take it. Miss a payment, and either need to take the course or else prove that you have taken one during the last five years....that sort of thing.

So, you throw people in jail who don't go to the class? Nothing like that has ever happened in America before, and the government should never be given the power to tell non-criminals, "You go here." Even kids don't have to go to school if their parents can show that they are receiving equivalent education. Such a plan would be fundamentally inconsistent with American freedoms.
0 Replies
 
FreeDuck
 
  1  
Reply Tue 11 Aug, 2009 08:30 am
@Foxfyre,
Foxfyre wrote:

Meanwhile those who genuinely would like to protect people from their own stupidity should redouble their efforts on educating people how to use credit wisely, how they can be suckered into unwise contracts, how to protect themselves, etc.

Unfortunately, with the current state of things, the only wise use of credit cards is not to use them, or at least not to carry a balance. That's what we tell our children. There is a fundamental conflict, though, with credit card companies in that if we all use credit wisely they will not stay in business. Any time you enter into a contract with another party that the other party can change at will and retroactively, you entering into a form of slavery.
Foxfyre
 
  1  
Reply Tue 11 Aug, 2009 09:46 am
@FreeDuck,
FreeDuck wrote:

Foxfyre wrote:

Meanwhile those who genuinely would like to protect people from their own stupidity should redouble their efforts on educating people how to use credit wisely, how they can be suckered into unwise contracts, how to protect themselves, etc.

Unfortunately, with the current state of things, the only wise use of credit cards is not to use them, or at least not to carry a balance. That's what we tell our children. There is a fundamental conflict, though, with credit card companies in that if we all use credit wisely they will not stay in business. Any time you enter into a contract with another party that the other party can change at will and retroactively, you entering into a form of slavery.


I think there is wise use of credit cards. I think it is wise to use a credit card for major purchases and for airline tickets etc. for the extra insurance provided, and it also greatly simplifies the process of purchasing airline tickets, renting a car, making motel reservations etc. that would be more complicated and/or inconvenient otherwise. I think it is wise to use a credit card for certain products and services because you can stop payment if the product or service is not delivered as agreed. The convenience of using credit cards for fuel and other travel expenses is obvious as you need to carry much less cash and the credit card company keeps a tally of your expenses to boot.

Admittedly credit cards are going to have to rely on service fees for their compensation because they won't get any interest out of us. We don't allow interest to accrue. And if later on a service fee is charged for the credit cards, then we will evaluate whether that is worth it to us. If it isn't, then we don't have to use credit cards and they will lose their service fees too.

The free market usually does work to everybody's benefit if sufficiently regulated to prevent people from doing economic violence to people but is otherwise left alone. So yes, usurous interest rates should not be allowed, and there should be full disclosure in readable language and print of what the customer can expect from the credit card company. And parents should be teaching their kids how to use credit responsibly.

But the price is too high to give the government power to protect us from all our own incompetence or excesses.
FreeDuck
 
  1  
Reply Tue 11 Aug, 2009 09:56 am
@Foxfyre,
We are more or less in agreement. Government certainly can't and shouldn't save us from unwise purchases or excess. But the credit card industry has become predatory largely because of government regulations in their favor or the lack of same. It may be too late to put the genie back in the bottle, but the most important thing that needs to happen is an equalization between the cardholder and the bank in contracts. Transparency is also important, of course, but transparently disclosing that you're selling yourself into slavery doesn't make it not slavery. And I don't know how you enforce plain language in disclosure -- I recall one bank executive admitting in a congressional hearing that he did not understand his own disclosure pamphlet.

A big part of our current problem is rooted in the fact that states can no longer protect their citizens from usury (because of SC decision allowing them to issue credit cards in any state while only being subject to the laws of the one they incorporated in) and the federal government refuses to do so.
Foxfyre
 
  1  
Reply Tue 11 Aug, 2009 10:10 am
@FreeDuck,
The government can and should require ALL businesses to provide full disclosure in plain English and in words that the average consumer can read and understand and in a font and format that only the most indifferent or stupid would overlook. That would be a valid function of government.

For that matter the government can and should require that all its own bills and legislation should provide full disclosure and be written in plain English and in words that the average voter can read and understand and in a font and format that only the most indifferent or stupid would overlook.

In both cases, the disclosure statements should include prominent warnings in large red letters that the initial agreement can be changed or amended down the line. And I would have no problem with a law that required both the lenders and government to provide prominent, clear, and understandable notice of any impending changes with sufficient lead time that appropriate remedial action could be taken.

Then if people still manage their finances and vote stupidly, well that is a risk required by freedom and it is worth it.

FreeDuck
 
  1  
Reply Tue 11 Aug, 2009 10:44 am
@Foxfyre,
Foxfyre wrote:

For that matter the government can and should require that all its own bills and legislation should provide full disclosure and be written in plain English and in words that the average voter can read and understand and in a font and format that only the most indifferent or stupid would overlook.

And every member of Congress should be forced to read the legislation they are voting on.

Foxfyre
 
  1  
Reply Tue 11 Aug, 2009 03:04 pm
@FreeDuck,
Amen and amen.

If I could be appointed dictator for a day, I would also declare an unrevokable mandate that every member of Congress and his/her family could receive not a single benefit more or better than what they allow the least of us and that they would be immediately subject to every law, rule, and regulation they impose on the rest of us.
0 Replies
 
Brandon9000
 
  1  
Reply Tue 11 Aug, 2009 09:54 pm
@Foxfyre,
Foxfyre wrote:

I think there is wise use of credit cards. I think it is wise to use a credit card for major purchases and for airline tickets etc. for the extra insurance provided, and it also greatly simplifies the process of purchasing airline tickets, renting a car, making motel reservations etc. that would be more complicated and/or inconvenient otherwise. I think it is wise to use a credit card for certain products and services because you can stop payment if the product or service is not delivered as agreed. The convenience of using credit cards for fuel and other travel expenses is obvious as you need to carry much less cash and the credit card company keeps a tally of your expenses to boot.

I think you're wrong, and the reason is that it simply cannot be wise to do business with people who are mounting a systematic effort to trick you into being their slave. They really are waiting for you to make a mistake and trying to trick you into doing so. Whatever benefits the cards may give cannot outweigh the fact that they are being sponsored by people who are trying to trick and enslave their customers. Behavior like moving the payment due date up, and then raising the interest rate to 27% of anyone who doesn't figure it out and fails to pay by the new date makes their motivation pretty clear.

Foxfyre wrote:

The free market usually does work to everybody's benefit if sufficiently regulated to prevent people from doing economic violence to people but is otherwise left alone. So yes, usurous interest rates should not be allowed, and there should be full disclosure in readable language and print of what the customer can expect from the credit card company. And parents should be teaching their kids how to use credit responsibly.

But the price is too high to give the government power to protect us from all our own incompetence or excesses.

I agree that the price is too high to give the government any more power than it already has, but, on the other hand, there must be some way to stop loan sharks, which these people truly are.
0 Replies
 
 

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