Capitol Grilling: America's Peril - The Credit Card Industry

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#112264 - 09-02-01 06:27 PM America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	Is it about time to nationalize the credit card industry, just as the US nationalized the printing of currency in its early days? If I remember my high school history correctly, in the good old days individual banks could issue their own currency, just as individual banks today can issue their own Visa/MasterCards. And, just as in the good old days, credit cards from different banks in different states are worth different amounts in terms of interest rates, etc. I was originally going to post this in the bankruptcy legislation thread, but thought it might make a good thread on its own.
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#112265 - 09-02-01 08:13 PM Re: America's Peril - The Credit Card Industry
Local_Gov_IT_Guy Local_Gov_IT_Guy Member Registered: 08-06-01 Posts: 2019	SigInt: Logic being: 1. If 'credit cards' = 'electronic currency' 2. If read "currency" in statement then assign federal ownership What are some of the impacts of the above actions on electronic commerce??? Possible consequences: 1. Anything with the word "currency" in it or that can be construed to be "currency" could come under Federal ownership? (just as an aside, could 'sex' ever be considered to be a "currency"?). Reallllyyyy interesting times on this one....
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#112266 - 09-02-01 09:10 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	Just as paper currency was an easy to carry representation of a certain amount of gold in a vault somewhere, it seems to me that credit cards are just an easy to carry representation of a certain number of dollars in a vault somewhere. Since much of the debate around the pending bankruptcy legislation revolves around its sponsorship by the credit card industry -- whose rules and regulations vary wildly from state-to-state even though credit cards are used in interstate commerce -- it seemed like it might be time to ask about nationalizing the industry. BTW -- I think your idea of using sex as currency sure would make shopping a lot more interesting!
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#112267 - 09-02-01 09:27 PM Re: America's Peril - The Credit Card Industry
Gothicwizard Gothicwizard Junior Member Registered: 08-17-01 Posts: 20	If sex was currency some of use would be broke. A credit card is a loan rather than currency, we pay interest on the money we barrow from the credit company. the insterest is different just like the interest on a bank loan varries from bank to bank. If we had government regulated credit cards, that would mean government regulated loans. My fear is if we all use cards all the time, we will all be paying interest on all the money we use. I for one hate it when I have to use my credit cards for something I do not have enough ready money for, because I then have all that interest to pay. Now if credit cards became like teller cards with no interest and no regulated payments, how about just pay what you want when you want with unlimited credit that would make me happy. _________________________ The Gothicwizard
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#112268 - 09-02-01 09:41 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	Gothicwizard, how about if the interest paid on Federal Credit Cards went into the treasury? Then the interest paid could be used for public services, instead of to enrich Citibank. Also, if Alan Greenspan changed the interest rate it would immediately have an effect on the economy instead of trickling down through tiers of middlemen.
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#112269 - 09-03-01 04:31 PM Re: America's Peril - The Credit Card Industry
toxteth o'grady toxteth o'grady Uncivil Engineer Registered: 10-24-01 Posts: 64784 Loc: At the airport	I would settle for the industry being competitive, rather than a virtual monopoly. Then there would be no need for the government to be involved. I would also reverse the Supreme Court decision that says terms shall be based on the laws of the state where the card issuer resides. Each state should have sovereignty over the terms of credit offered to its citizens. The practical effect would be that credit card issuers couldn't go shopping for a home in a state with laws most favorable to their interests. _________________________ "It's my party and I'll cry if I want to" --Abe Lincoln
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#112270 - 09-03-01 10:53 PM Re: America's Peril - The Credit Card Industry
Paris of Troy Paris of Troy Member Registered: 07-15-01 Posts: 3465	As I was struggling to say in a prior thread, the issuance of credit cards by private banks -- and the interest rates they can get away with charging -- have the same effect on the money supply that the issuance of private money used to have with one important difference: no one finances capital improvements with a credit card; the availability credit cards effects the purchase of consumer goods almost exclusively. I don't think we need a national credit card program -- The Bank of The United States Visa, what a nightmare that would be; do you really want the U.S. Attorney's office on the phone if you miss a few payments? But interest rates and credit card terms ought to be regulated in public interest considering the more important role consumer debt now plays in our consumer economy.
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#112271 - 09-03-01 11:40 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	If credit cards were nationalized, we would say goodbye to frequent flier miles every time we made a purchase and other affinity cards. The public is not ready to do that; the airlines, banks etc would no doubt lobby congress like crazy to prevent it. They have a vested interest in opposing this deal; who would have a vested interest in implementing it? The banking committee is among the plummiest congressional assignments,as the special banking interests have deep pockets for PACs. Just ask Chuck Schumer and Al D'Amato. Also see the govt-private sector thread. Not sure we want to make govt bigger to handle our credit cards - a private sector industry employing lots of folks - when we arent sure about how to address social security. And just who would Bush appoint as credit card Czar? His sister-in-law Columba Bush?
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#112272 - 08-01-02 02:41 PM Re: America's Peril - The Credit Card Industry
zeroflux zeroflux Administrator Registered: 03-11-01 Posts: 6175 Loc: Arlington, Virginia	Thread Consolidation - Originally posted by Congresscam While there IS a need for reform of the bankruptcy system of some of its abuses, the changes that are going to be made have the potential to fundamentally alter entrepreneurism as it has developed since the early 1980s. I'm VERY concerned that risk taking is going to fall off a cliff, and this is a force that has driven the US economy forward. Small businesses account for the vast majority of jobs created in the past 20 years. Large corporations use to employee far more people by percentage than they do now. Unlike Europe and Japan, we've always had a system that's promoted experimentation. In Europe for example, it's almost impossible for people to get a fresh start after a business or other financial disaster. The new bankruptcy rules are going to make the USA much closer to the Europe. People here are going to have become much more conservative and risk-averse. Indeed, even outside of businesses,people in general are going to have to be much more careful with their financial condition. In some ways, this may be a good thing given the excessive credit card and home equity debts people have been taking on in recent years, but the details of the bankruptcy reform are going to cause a 180 degree change in attitude, when only a 90 degree change is warranted. Once word gets out about the real consequences of these changes, consumer spending may plummet dramatically as people in raw fear do everything possible to get out of debt, and to (excessively) save money in rather unproductive savings accounts. If we are heading into a recession, this reform law is going to make the economy much worse as people dramatically curtail their spending in order to avoid even the possibility of going into credit card debt (or more CC debt). In addition, people who are thinking about taking out loans to start or expand new businesses are going to think ten times over now about it. If one has to file bankruptcy- unless one is really poor and has no assets- you will really be screwed. I mean, really really screwed. The courts will force most into 5 year repayments via wage garnishments- the credit card companies get your money before you do, even if your kids will go without food and clothing. Small businesses will have to be liquidated within 6 months instead of a couple years (which allows for recovery/debt rescheduling). The bankruptcy reform should have primarily addressed the high income earners who abuse the system. If a middle class family who makes $50,000 yr gets into too much debt, that is really the fault of the credit card companies for extending it, as much as the debtor. A family of 4 who makes about $50,000 yr and higher will have no fresh start. That bar should in fact be much higher, more like $100,000 yr. In New York or California $50,000 yr for a family of 4 isn't even middle class- that's barely enough to survive.
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#112273 - 08-01-02 02:48 PM Re: America's Peril - The Credit Card Industry
zeroflux zeroflux Administrator Registered: 03-11-01 Posts: 6175 Loc: Arlington, Virginia	Thread Consolidation - Originally posted by Dave Matthews you'd better believe it. if not, watch the hearings on C-Span and see for yourself how your congressional leaders on both sides of the aisle are doing the work of the american people sarcasm. i remember watching senate hearings on banruptcy on c-scam several years ago. the bill was introduced by a senator from pennsylvania whose opening statement was beyond laughable. basically, he introduced the bill by saying that the banks and financial institutions were responsible for building the US economy and that they are now suffering unfairly and could go out of business because of bancruptcy law abuses please! - what i found to be an indication of the corruption, is that every single caller to the station that called in prior to the vote was dead set against the bill... and the callers had harrowing stories of why they had to file bancruptcy such as former spouses leaving the second spouse with excessive debt after the divorce and people having to work a second job just to make ends meet. to make a long story short, the bill passed with an overwhelming majority of votes from both the democrats and republicans. it really made me wonder which constituents those representatives were allegedly representing since we all know that representing corporations is NOT representing the people of the united states of america. its sad but true. and nothing will be done until people quit gullibly playing partisan games and realize that both parties are corrupt.
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#112274 - 08-01-02 04:33 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	The new bankruptcy legislation is bad news. The credit card companies knew full well when they issued the credit that a certain percentage borrowers would default. But they lent anyway, because they had to compete with some other company that was offering credit at a lower rate. Every day I get more credit offers in the mail, urging me to spend the money on vacations and other things people with no money have no business spending it on. Because of the credit card companies' irresponsible lending, it serves them right that they aren't making any money. The new legislation is NOT going to make credit card companies more profitable in the long run. They will just issue more credit at lower rates, and before you know it they will be in the same hole again that they are now. The concept of a "fresh start" has been with us since our very founding as a nation. It is very unfortunate that Congress is removing the "fresh start" because of lobbying money spent by big and irresponsible credit card issuers.
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#112275 - 08-01-02 04:38 PM Re: America's Peril - The Credit Card Industry
firecracker too firecracker too Member Registered: 05-20-03 Posts: 14971	Geez, saw the thread parent's name and came over here thinking somehow SigInt was back. Damn!
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#112276 - 08-01-02 04:39 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	Why don't we begin to make people keep their promises? We're in a new Era of Accountability now, which I applaud. No more bad accounting. No more irresponsible stock tips. How about no more free music downloading, and no more credit card abuse? If you want to give a free pass to credit deadbeats, you owe the same fair treatment to corrupt CEOs. Why two standards of behavior?
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#112277 - 08-01-02 05:12 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	Thanks for posting this Rocker. This kind of thinking is common among a lot of people, and that's exactly why this bankruptcy bill is going though Congress and no one is complaining about it. Let's look at it this way: Suppose you walk into a bank, and are offered two loans. Loan 1 has a 15% interest rate, but if for some reason you find yourself in a situation where you can't repay it, then the loan is forgiven. Loan 2 has only a 7.5% interest rate, but if you fall into a situation where you lose your job or something like that, you're just screwed, and your wages will be garnished. As a capitalist, I'm sure you'd agree if both parties agre on Loan 1, then it's perfectly OK if the borrower gets to avoid paying the loan. The bank is OK with it because although some loans will disappear, the overall higher interest rates makes up for it and it's still profitable. It's kind of like insurance. When you buy health insurance, hopefully you won't need it, but if you get sick and need a $100,000 operation, then it's perfectly legit to demand that the insurance company pay for it. Now under our current system of laws, loan 2 doesn't exist, because it's illegal. It violates public policy. The public policy states that a person shouldn't be screwed for life because of a bad borrowing decision. Under the current laws, all loans are of type 1, so if a person has to file bankruptcy, then it's perfect legitimate and that person is no more a deadbeat than the sick person getting reimbursed by his health insurance company. The new law being passed by Congress is going to convert all loans which are currently of type 1, over to type 2, and this is extremely unfair to the borrowers because they had negotiated the loan thinking it was type 1. If you had medical insurance, and just before you got sick, Congress passed a law saying that your insurance company no longer has to pay you, you'd be damn pissed about it. And when you talk about "accountability"... I think the credit card issues have had an extreme lack of accountability when they push people to use credit that they can't afford. The corrupt CEOs are not comparable to the honest person filing bankruptcy. The CEO has committed fraud. There are some people who file bankruptcy who do so fraudulently. They borrow intendint go file bankruptcy. But I find that there is mostly the OPPOSITE problem. People who are entitled to file bankruptcy, and have very legitimate reasons for doing so, refuse to take advantage of bankruptcy becuase they think there is somethign morally repugnant about it. It's one of the ironies of bankrupcy that rich people have no problem taking advantage of the system while keeping their house in Florida (that's a disgusting loophole), but poor people who really ought to file bankruptcy and get a fresh start refuse. I have counselled several people to file bankruptcy, and usually they refuse because they think it's immoral.
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#112278 - 08-01-02 05:24 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	bob d: I know the exact people you are talking about. In my experience, they are middle class. They usually are the younger mall rats, the ones with the better clothes and fancy cars. Minor, temporary deprivation is not a part of their makeup. Every whim is treated as a necessity, and satisfaction is never postponed. Making it tougher for these type of folks to operate as usual creates no moral dilemma for me. Their past ease in walking away from the financial responsibilities (aided by the equally unethical legal class) are the reasons why responsible citizens pay a higher cost for credit. Sorry. To me, they are just another version of crooked CEOs, although only guilty of petty theft. Treat them alike.
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#112279 - 08-01-02 05:39 PM Re: America's Peril - The Credit Card Industry
FlyOver FlyOver Junior Member Registered: 11-25-01 Posts: 1413	I don't know what the statistics are, but my experience supports this profile as well. In fact a couple of years ago I had a friend get upside down with several creditors and she was being driven to the point of insanity by collection calls. I offered to help set up some kind of manageable payment plan, directly with the creditors. I was stunned to have two Master Card collectors offer to allow the debt to be paid at something like .50 on the dollar. Now it may well be that this would have stayed on her credit history, but still, I was stunned that there is world out there that allows you to settle debt this way.
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#112280 - 08-01-02 09:42 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	According to this newspaper column, "In 1999, a federal judiciary study of bankruptcy cases found that the median income of debtors seeking bankruptcy protection was only $21,500." http://www.newsday.com/business/ny-vpren302803616jul30.co lumn?coll=ny%2Dtop%2Dheadlines Were people irresponsible to spend money they didn't have? Yes they were. Should they suffer their whole lives because of it? Our legal system says no. They are allowed a fresh start. The credit card companies have nothing to complain about because they lent the money to marginal borrowers knowing full well about the bankruptcy system. It was an implied part of the contract that the borrower could file bankruptcy. It's like comprehensive auto insurance. If you get into an accident, and it's all your fault, if you have the premium auto insurance policy, the insurance company still reimburses you. I see bad things happenning if this bankruptcy bill passes. Credit card companies will extend even MORE debt to borrowers who have no business having credit cards at all. Many people will be screwed for life as a result. The Fresh Start principle has been around for two hundred years. Under this principle, our nation prospered and went from being a small agricultural backwater to the world biggest economy. I don't see any reason to mess with what works.
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#112281 - 08-01-02 10:41 PM Re: America's Peril - The Credit Card Industry
Gonzo Gonzo Member Registered: 08-27-01 Posts: 3792 Loc: SATX	Some credit card issuers, and The Associates out of Delaware come to mind first, have made an industry out of unsolicited "cold call" credit cards... It's like I was asking Milla this morning- what if every American who owed a debt (or taxes) was unable to pay it that month? (or by that April 15th, with taxes)... the whole system goes into turmoil. With a recession on, and the markets showing instability at best, this kind of question bears asking. FuqALotta Predatory Lenders- rat bastards. Those of you who are Christian should ask yourself why the Old Testament strongly denounces usury. Those of you who aren't should ask yourselves why people should be made rich by sitting on the backs of others- providing a burden, and forcing sweat... _________________________ "Civilization began with fermentation." -William Faulkner
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#112282 - 08-01-02 11:11 PM Re: America's Peril - The Credit Card Industry
toxteth o'grady toxteth o'grady Uncivil Engineer Registered: 10-24-01 Posts: 64784 Loc: At the airport	Some of them lend because they have an interesting little scam going. Some accept your application and immediately charge you a membership fee. They then start charging interest on the fee they already charged to the new account. The borrower can also be charged a late payment fee, even though they mailed the payment on time, and if the moon and stars align and the late fee pushes the borrower over his limit, then an overlimit fee gets charged. And these fees can be charged each and every month if the borrower is close to the limit, making it impossible for the borrower to get caught up. Some of these guys actually prefer people who fall behind on their payments, because those people can be taken to court and garnished. In Virginia, some courts don't keep records of garnishments, allowing the creditors to suck money out of debtors' paychecks pretty much in perpetuity. There can be no bankruptcy reform without caps on interest rates and on the fees credit-card issuers can assess cardholders. Oh, and date postmarked is date paid. _________________________ "It's my party and I'll cry if I want to" --Abe Lincoln
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#112283 - 08-01-02 11:19 PM Re: America's Peril - The Credit Card Industry
toxteth o'grady toxteth o'grady Uncivil Engineer Registered: 10-24-01 Posts: 64784 Loc: At the airport	They already get that. In fact they get a better break than the deadbeats. Then again, they are often one and the same. :rolleyes: _________________________ "It's my party and I'll cry if I want to" --Abe Lincoln
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#112284 - 08-01-02 11:25 PM Re: America's Peril - The Credit Card Industry
toxteth o'grady toxteth o'grady Uncivil Engineer Registered: 10-24-01 Posts: 64784 Loc: At the airport	Well, considering that otherwise they'd have to sell the debt to a secondhand debtholder for two cents on the dollar, offering to settle for 50 cents on the dollar is a great deal for the credit-card issuer that can get it. :rolleyes: _________________________ "It's my party and I'll cry if I want to" --Abe Lincoln
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#112285 - 08-02-02 10:43 AM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	The ideal credit card borrower, for the issuers, is the dummy who falls behind on payments, but refuses to file bankrupcy, and keeps getting socked with unconscionably high late fees and 18% interest rate payments, and he eventually winds up paying back far more than he ever borrowed. After the new bankruptcy bill, for credit card issuers who don't themselve go bankrupt from the wave of bankruptcies that will follow as borrowers take advantage of their one last chance to file, they will lend out even more money to marginal borrowers knowing that they can garnish wages and the poor borrower will no longer have an out through bankruptcy. Yes, the bankruptcy laws help keep lenders honest.
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#112286 - 08-03-02 07:12 AM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	Here 's my question: What happens after the credit card companies decide to garnish my wages and I decide that it's just not worth it to go to work? All I have to do is quit working legally & start working of the books.
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#112287 - 08-03-02 11:13 AM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	Yes, in theory you could do that, but most debtors find it inconvienient to reorganize their lives just to aviod a judgment creditor. Garnishment is not the only collection tool available to the creditor: a debtor could be summonned to court and made to answer questions about their assests under oath, their bank accounts could be attached (without prior notice), liens cdould be placed on their real estate, and, depending on the exemption laws in thier particular state, a debtor's personal property including vehicles could be siezed and auctioned. While these creditor remidies may seem impressive, it is true that a determined debtor can always out fox a creditor, but it takes a lot of effort and requires a thorough change of lifestyle to do it. Because most debtors don't have the energy for all that they are "easy pickin's" for the bank's collection attorney.
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#112288 - 08-03-02 12:01 PM Re: America's Peril - The Credit Card Industry
zeroflux zeroflux Administrator Registered: 03-11-01 Posts: 6175 Loc: Arlington, Virginia	An article from the Chicago Tribune contains a most interesting statistic on bankruptcy: "The median income of bankruptcy filers in 1998 was $22,000 a year, according to a study by federal bankruptcy judges." So much for the argument that the wealthy are using bankruptcy to avoid paying thier bills......
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#112289 - 08-03-02 12:12 PM Re: America's Peril - The Credit Card Industry
toxteth o'grady toxteth o'grady Uncivil Engineer Registered: 10-24-01 Posts: 64784 Loc: At the airport	A front-page article in the Wall Street Journal Thursday highlighted the issue of deadbeat CEO's. Companies should not lend to senior management - and certainly not on sweetheart terms. That's why WorldCom and Adelphia are bankrupt. _________________________ "It's my party and I'll cry if I want to" --Abe Lincoln
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#112290 - 08-03-02 12:14 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	The "median income" has nothing to do with whether the wealthy are using bankruptcy to avoid paying their bills. The "median income" means that half the filers have incomes below $22,000, and half have incomes above $22,000. For example, if 10,000 filers had incomes of $21,999, 1 filer had an income of $22,000, and 10,000 filers had incomes of $1,000,000,000,000 then the median income would still be $22,000. The link to the article didn't work for me; did it mention the "average" or "mean" income, in addition to the "median"?
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#112291 - 08-03-02 12:30 PM Re: America's Peril - The Credit Card Industry
zeroflux zeroflux Administrator Registered: 03-11-01 Posts: 6175 Loc: Arlington, Virginia	I pulled the article from an old post I made on the original bankruptcy reform thread. I'll see what statistics I can come up with, but honestly the spin some of you make for the credit card industry is unbelievable. Do you really actually believe that most of those who file bankruptcy are wealthy or are by people abusing the system and essentially stealing? The few amazing stories that appear from time to time in the media about multimillionaires filing bankruptcy and keeping most of their assets are not the norm by any stretch of the imagination. In fact, I imagine the banks milked those few stories to death in order to sway politicians towards adopting bankruptcy reforms... that along with buying the politicians outright.
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#112292 - 08-03-02 12:41 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	Zeroflux, I wasn't spinning for the credit card industry -- I think they're leeches that prey mainly on the poor. I was just pointing out that there is a problem using the "median" as a statistical argument.
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#112293 - 08-03-02 03:09 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	"I wasn't spinning for the credit card industry -- I think they're leeches that prey mainly on the poor. I was just pointing out that there is a problem using the "median" as a statistical argument." The median indicates that more than half the people who file for bankruptcy do not have high incomes. This is a better statistic than the median, a small number of rich filers will skew the statistics. I'm all in favor of getting rid of the outrageous homestead exemption that allows people to file bankruptcy and still own an expensive house. But the new reform bill is not aimed at the big filer; it's aimed at the poor and the middle class.
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#112294 - 08-04-02 04:09 AM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	After college I worked two jobs, but still ended up putting $1000 on a credit card to make ends meet. I figured I'd pay it off once I was making more money. But each year I fell another $1000 or $2000 short, and after ten years I was $20,000 in debt. I cancelled all of my cards, and resolved to pay them off. The interest rate at the time was 7%. The following year I got laid off. It was all I could do to scrape together enough money to pay the bills. But right when I could least afford to pay, they charged me $35 more--for paying late. Times four cards equals $140. Then they raised my interest rate. And kept on raising it. To 25%. In fact, there is no legal limit to how high they can keep raising it. And right when I was most in need of an option, I was in the least position to have one--like paying the card off or getting a new one. I did get a new job, and I've been continuing to pay for several years on; but at this rate, I don't know if I'll ever get out from under.
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#112295 - 08-04-02 04:25 AM Re: America's Peril - The Credit Card Industry
Gambit Gambit Terrierist Registered: 07-07-01 Posts: 15381 Loc: The sofa	The leading reasons people file for bankruptcy are divorce, job loss, medical emergency, and failure of a small business. It seems like there should be safety nets under at least two out of those four reasons. Unfortunately, that's just not the way it works. And people are sadly mistaken if they think the average Joe or Josephine wants the stigma of bankruptcy on their record. There are some employers who won't even hire people with bankruptcies in their past, assuming that such a person is unreliable and untrustworthy. _________________________ The believer is happy. The doubter is wise.
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#112296 - 08-04-02 08:12 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	If they do a credit check, and see that you are late on all your payments and had your wage garnished at your last job, the very same stigma would probably apply. In most cases, people are better off filing for bankruptcy. But so many refuse because of some strange moral reaons.
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#112297 - 08-04-02 08:25 PM Re: America's Peril - The Credit Card Industry
toxteth o'grady toxteth o'grady Uncivil Engineer Registered: 10-24-01 Posts: 64784 Loc: At the airport	Check the amounts of principal that get paid off each month; you'll probably find that some of these guys have been ever so nice enough to keep your monthly minimum payment low....by reducing the amount of principal you pay off a month. You'll probably also notice that you won't have them completely paid off for at least ten years or more. And that's if you never make another credit card purchase. _________________________ "It's my party and I'll cry if I want to" --Abe Lincoln
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#112298 - 08-04-02 08:31 PM Re: America's Peril - The Credit Card Industry
toxteth o'grady toxteth o'grady Uncivil Engineer Registered: 10-24-01 Posts: 64784 Loc: At the airport	There were hints for a while that the FAA was not going to authorize security clearances to people with bankruptcies, judgments or other blemishes on their credit histories. The good news is that you can very easily challenge what the credit reporting agencies have in your file. Trans Union just lost a five million dollar lawsuit for having mistakenly put credit information for one person in the files of another, causing her to lose her credit rating. Figure that everyone's credit history is subject to the same kinds of screw-ups. _________________________ "It's my party and I'll cry if I want to" --Abe Lincoln
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#112299 - 08-04-02 11:18 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	It sounds like the OJ jury was reconstituted, and another strong reason for tort reform. I doubt that any damages incurred, real or imagined, added up to 5 mil. Thievery under a different alias.
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#112300 - 08-04-02 11:22 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	T.Rex, if you investigate some of the consumer credit counseling services, you'll usually find that they can consolidate your debt, remove/reduce the interest, and lower your monthly payments.
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#112301 - 08-04-02 11:23 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	I think the car insurance companies found that people with blemished credit records were more likely to be involved in accidents.
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#112302 - 08-04-02 11:25 PM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	T Rex: Yeah dude, go for the freebie and skate. Those other honest suckers who pay their debts in full will cover you. It's the liberal way.
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#112303 - 08-05-02 02:12 AM Re: America's Peril - The Credit Card Industry
Paris of Troy Paris of Troy Member Registered: 07-15-01 Posts: 3465	Gambit, if you know of any such people I suggest that you have them contact thier attorney. Any type of employment discrimination on the basis of bankruptcy is illegal. Check out the link below: 11 USC 525 Anyone who believes that the present bankruptcy system is flawed to the point where the proposed bankruptcy reform bill represents progress simply does not know what they are talking about. That includes most members of congress and our friend, Mr. Furman as well. I am very familiar with the present title 11, and over the past 20 years I have represented both creditors and debtors, and served as trustee in countless bankruptcy cases. It's not an exaggeration to say that I have probably witnessed 5,000 section 341 meetings (first meeting of creditors) during that time which gives me a very firm grasp of who files bankruptcy and the reasons why they do it. It is not usually irresponsible spending that forces someone into bankruptcy, but rather an inflexable budget. People typically live on the verge of insolvency these days: any unforseen calamity will push them over the edge. Gambit is right when he or she implied in an earlier post that chapter 7 is the safety net we have not otherwise provided for the middle class. Any credit card debt for someone on a fixed income is very difficult to manage sucessfully, and, sadly, the greatest increase in filings lately comes from the elderly, but there are few in the middle class are not at risk. It's not unusual to find a debtor who has scheduled anywhere between 50 to 100K or even 200K in unsecured credit card debt these days, and people always ask, "what did the debtor do with all that money; how could they be so irresponsible?" The debtor never saw that money, almost all of that debt is recycled interest. The typical senario is that at some point the debtor crosses a line; perhaps it's somewhere between 5 to 10K in credit card debt. From that point he is unable to make the minimum payments and afford his other monthly bills. His solution is to use his wages to pay the banks, and use his credit cards to fund his necessities: groceries, clothing, repairs and the like. So now he paying 15 to 20% interest on virtually everything he must purchase theoughout the month. Soon, the debtor is in a position where even his wages can't fund the minimum payments and he begins to borrow from one card to pay another; his debt explodes, but ironically his credit is better than ever because he's successfully making large credit card payments each month. It's not long before the level of his credit card debt is truly astonishing, and people would see him as a poster boy for credit card abuse.
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#112304 - 08-05-02 02:23 AM Re: America's Peril - The Credit Card Industry
zeroflux zeroflux Administrator Registered: 03-11-01 Posts: 6175 Loc: Arlington, Virginia	"It sounds like the OJ jury was reconstituted, and another strong reason for tort reform. I doubt that any damages incurred, real or imagined, added up to 5 mil. Thievery under a different alias." I also doubt that the damages are worth 5 million on their own. That said, I am sure that figure includes punitive damages which are usually x-times the amount of actual damages. There is nothing to reform there in my opinion. Punitive damages help corporations stay honest. Even then, many of them continue with unethical and illegal practices if they estimate that the profit incurred from doing something illegal exceeds the costs from litigation and damages they will have to pay out.
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#112305 - 08-05-02 03:13 AM Re: America's Peril - The Credit Card Industry
Gambit Gambit Terrierist Registered: 07-07-01 Posts: 15381 Loc: The sofa	I do know of people to whom it's happened, and I worked for a company where it was an unwritten policy (as well as what bob_d pointed out - not hiring based on late payments, etc.) This is one of those "how could you ever prove it?" problems that only the most foolhardy would pursue in court, however. The people doing the hiring can always claim that something else on the candidate was not up to snuff. I used to argue to this employer that it seemed to me that someone who was in finanical difficulty was doing the responsible thing by trying to remain employed. They just didn't see it that way, and I wasn't in a position to call candidates and indicate to them that they had, possibly, been screwed. Thankfully, I don't work for those people any more. _________________________ The believer is happy. The doubter is wise.
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#112306 - 08-05-02 04:29 AM Re: America's Peril - The Credit Card Industry
zeroflux zeroflux Administrator Registered: 03-11-01 Posts: 6175 Loc: Arlington, Virginia	I would say from my personal experience that Paris of Troy's analysis is right on. I filed for Chapter 7 not too long after college and I was definitely not in the category of "Mall Rat" or some rich kid who defrauded the system. In my case, my curse was not having a well paying job after college, a high debt load from living expenses at GWU combined with a car accident. I was using my credit cards to literally pay for food and partial payments for my rent, and then later fell into the trap of using one card to pay the minimum payment on the other. I also didn't have access to any credit during that period since most of my cards were blocked or in collection. I survived through two years of unbelievable psychological harassment by creditors and collection companies both at work and at home. And I don't use the description lightly. I consider myself to be a very thick skinned person who is usually not phased by much. After two years of intermittent minimum payments after which I decided to seek credit counseling. I was in such a poor financial position that the credit counselor (credit counselors typically work on behalf of the credit industry to try to collect anything they can) recommended that I file for bankruptcy. I did. Halfway through my bankruptcy filing, I was told by my attorney that the filing would be on hold due to potential changes in the law being considered in the Senate. I proceeded to tune in to C-Span to watch the proceedings and I have to say it was a pivotal moment in my life when my general apathy towards politics turned to a absolute rage, hatred and dedication towards exposing politicians and corruption in the national parties. I still recall the moment as if it was yesterday. Some Republican Senator from Pennsylvania who sponsored the bill got up and gave the most transparent speech I have ever heard attributing every shining success in America short of Jesus coming back from the dead to the “suffering” helpless credit industry. Mind you, this was the same exact same period that this very same credit card industry was being pursued by AG's from different states for a range of infractions ranging from predatory lending. Illegal collection practices to misleading and deceptive legal clauses in their small print. I wish I taped the minutes that followed. As is customary on C-Span, the phone lines were opened up for public calls while votes were taking place on the floor. One phone line for Republican callers, another for Democratic callers. Not a single constituent who called in during the whole vote was for the bill. Callers from both parties in fact described scenarios far more reaching than mine, from wives left with their husband's debt after divorce to every other nightmare under the sun. Actually, in a demented way, I felt much better after hearing some of the stories. They were in far more crap than I ever could dream of being in. Well my moment of truth happened when I watched in disbelief more than 90% of the Senators, from both sides of the aisle, and contrary to every fucking single constituent that called in, voted for the bill. As it later turned out, their vote didn't affect my Chapter 7 as the judge very quickly came to the conclusion that I was a poor sap with absolutely no assets still living on a college income and was well within the limitations provided by bankruptcy law at that point. I had wrecked my car, had no assets aside from an old computer, cracked Ikea furniture and the clothes on my back, I was renting an efficiency and would still be in debt after bankruptcy from student loans which could not be offloaded. To add insult to injury, I was being sent “special” credit card promotions specifically for bankruptcy filers promising me the “privilege” of unbelievably high interest rates (close to 30% APR) if only I could get my benevolent attorney to sign off stating that these wonderful offers are exempt from the bankruptcy filings. In other words, these companies didn't give a fuck that I was filing bankruptcy and very obviously would not be able to repay them because they knew that I wouldn't be able to file another bankruptcy for another 7 years. Like the saying goes: First Time. Shame on you. Second time. Shame on me! I had already been paying everything in cash for a good two years prior to filing bankruptcy and I wasn't about to fall in the trap a second time. I have been credit card free, and mostly (aside from student loans) debt free for almost five years and I don't care how the industry will try to coax me. I would cut off my fucking hand before ever applying for a credit card again! And even though I would consider small business loans or a mortgage payment if I ever qualify for one, I will never again put myself in a situation where I would use a credit card. Irony is, just to show how screwed our system has gotten, I was recently told by a real estate broker that I would need to re-establish credit to qualify for a home loan. He said my pride in being debt free was not necessarily a good thing. I essentially told him to screw himself. Now, if any of you were wondering why this thread was suddenly retrieved from the archives, here's your answer: several days ago I received a call from a collection company trying to collect on behalf of a Fleet Bank credit card debt. At first, I blanked and asked the caller to verify my social security number and informed her that I haven't had any credit cards in ages. When the collector confirmed the information, I inquired (still quite puzzled) about the last activity on the credit card. The answer? 1994. I responded that the debt was offloaded in bankruptcy. Furthermore, I added, the statute of limitations (5 years) was well beyond expired. She apologized promptly and said she would remove me from the database. In fact, the apology was so swift that it led me to believe the collection agency was well aware of that information before even calling, and were perhaps hopeful that they could collect through deception. This tactic, is not uncommon. Another tactic which I suspect will be used by more unscrupulous credit companies in these dire economic times is the process of inserting nasty little 2pt font clauses in credit card applications re-affirming any previous debt owed to the bank, regardless of whether they were offloaded in bankruptcy or not. I strongly believe that our credit system combined with government's affinity for taxing everything under the sun short of oxygen (and I'm not holding my breath on that one) is going to result in the downfall of America. I also believe that most of America regardless of income are at constant risk of losing everything they own should anything happen to their income. And through the murky haze of incessant chatter about the financial scandals, political corruption, government deficits, budget shortages, special interests, and partisan bickering I find that the most pointed question in this forum was asked by Gonzo in this thread: “It's like I was asking Milla this morning- what if every American who owed a debt (or taxes) was unable to pay it that month? (or by that April 15th, with taxes)... the whole system goes into turmoil. With a recession on, and the markets showing instability at best, this kind of question bears asking.” In fact, let me add to the question. With all the big spending by Republicans on military toys, the administrations ragged determination to go into Iraq even alone at an estimated cost of 80 billion and despite a budget deficit and domestic economic looming disaster. And with the Democrat's grandiose plans for social welfare and knee jerk taxation and both parties propensity for spreading eagle for a good fuck by corporate interests, the question remains: who pays for everything in the end? Well if unemployment, under-employment and sub-standard wages are the name of the game, and most of America is living off of credit and Monopoly money, is it really farfetched to assume Uncle Sam and the banks will do everything to collect on that debt? And if they cannot collect cash, perhaps they will liquidate assets, levy bank accounts (Remember that nifty Know Your Customer legislation)? Its really perturbing to see the rhetoric spewed by some people such as RQF from their soapbox. All I can say is that its obvious some of you have never experienced first hand some of the fruits your idols are bearing. I would only hope that you never end up in a situation where you lose your home, have your accounts pilloried (read: levied) by the IRS or God forbid, have to file bankruptcy. I can only trust from the glowing condemnation some of you make of the rest of us that you are extremely wealthy and would never be in a position of losing a job, not being able to pay rent, health insurance or pay taxes. But not to rain on your parade, Gonzo's question remains very valid for the rest of us.
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#112307 - 08-05-02 08:58 AM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	Zeroflux, That is the best thing you've ever written. I'm moved. The only thing I can add is that there is no one in authority preaching responsible spending. It seems as if our government officials are happy about people spending on credit, because they think it helps the economy. (I suppose it helps temporarily, and politicians only care about the next election.) I would love to see GWB come on TV and say "Fellow Americans. If you don't have the money, don't spend it. Don't take a vacation if you can only pay for it with a credit card. Don't buy a thirty thousand dollar SUV if you can only pay for it with credit. A ten thousand dollar car will get to you work just fine." I could imagine Ronald Reagan doing that. But never GWB or Clinton.
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#112308 - 08-05-02 09:04 AM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	I remember my first real job, and my superiors were going over resumes and said "this candidate is bad because he's currently unemployed." My reaction was "God forbid we actually hire someone who need the job!" The theory behind discriminating against the needy is: (1) They want to hire someone who truly wants the job, not someone who's desperate because they need the money. (2) Someone with a lot of debt is more likely to embezzle money from the company because he's in desperate need of money. (3) It demonstrates bad character, as they see it, and bad character in one's personal life could mean bad character at work. In neither of the above cases is bankruptcy any worse than being over one's head in debt but not having the bankruptcy. At least the person who has filed for bankruptcy has a fresh start, and no more debt. So he's not going to have to embezzle to pay the debt, and he's not as desperate for the job.
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#112309 - 08-05-02 09:51 AM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	zeroflux: cry me a river. Your story was that of the entitlement mentality, combined with ignorance about credit, that I am preaching against. I'm glad that at this late stage in your life you at last have awakened to the hard facts of life. I know a lot of responsible college-age kids who have forgone pricey private institutions to attend jucos, followed by stints at less-than-prestigious state colleges. Their college experience was accompanied by many long hours of work, and a Top Ramen diet. And in the end, along with a lot less debt load, their educational experience had a tangible real-life fullness augmented by common sense about the way things are. When people sign for credit, they are making a promise. They are implying that they know that things may not work out as they planned, and that bad things may befall them, but that they still will be able to meet their duty. In the end, their word is their bond. Because they know that not to re-pay means that innocents with banks stocks in their retirement portfolios (and honest borrowers) will have to subsidize their carelessness and broken promises. One last question: Did your parents warn you about all of the risk, or did you just ignore them?
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#112310 - 08-05-02 10:16 AM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	No, this is not true. Under U.S. law, when people sign for credit, it is implied that if things don't work out, then bankruptcy is an available option. The lenders certainly know about this. If lenders have foolishly lent out money to those who are bad credit risks, then it serves them right if they have to file for bankruptcy. Zeroflux's story is all too common, and a very easy trap to fall into. Society encourages you to spend money. There's no one encouraging you to be frugal.
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#112311 - 08-05-02 10:23 AM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	Well, then, don't criticize people like me who are trying to spread the message. And for heaven's sake, don't keep reminding overspenders that it's OK to welsh on one's debts. Continuing to send that message to the younger generation is like enabling an alcoholic.
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#112312 - 08-05-02 11:10 AM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	I'm criticizing you for the WAY you are spreading the message. It's mostly aimed at people who have already gotten themselves in trouble. It's too late to help them at that point, so you are merely rubbing salt in the wounds. My message is that it's LEGAL to file for bankruptcy. and the law is there for people to take advantage of it if they are in the situation where they need it. It's good advice for people who are in an indebted financial situation. A person with no assets, and a big mountain of debt payments they can barely meet, or maybe CAN'T meet, would do themselves a great service by taking advantage of what Congress has given them. Educating people about the law is a public service.
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#112313 - 08-05-02 11:25 AM Re: America's Peril - The Credit Card Industry
Anonymous Anonymous Unregistered	You're too modest. Your message in the top posts were "bad credit card companies" and "faultless borrowers". And you were fervently arguing for a continuance of the present bankruptcy mess. Re-read them. OTOH, I was promoting individual prudence, and sensible banking law reform that would discourage reckless borrower behavior. Needless to say, I'm much more comfortable with my consistent and upright message.
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