Credit card debt is unbeatable...here's the story behind it - Tilted Forum Project Discussion Community

DEI37 · 01-15-2005, 10:45 AM

I've been a cardholder for Chase/Manhattan for a while, with a Wal-Mart card. Got it in 1997, when I was 20. It was my first card. Got it at 12.99% APR, and didn't use it but a few times in the first year, paying it off every month. Sometime after that, I needed an item, and since it was a phone order thing (Crutchfield), I paid by credit card. Figured to pay it off the next statement. Next statement came, and I noticed a minimum payment of $10, for my $180 purchase. Yeah, you can figure out the rest of it. I didn't do too badly though, really, until just a few years ago. I had racked up about $4500 on the thing. We came in to good money in a bad way, but paid it almost all the way off. Had about $450 left on it...no big deal.

Then, I had an accident, almost immediately after spending the good money, in ways that it DID need to be spent. Not much was wasted...honest. Maybe $850 of $12,000. The accident cost me my job. We had a kid, and Heather was working a little, but nowhere near enough. We had long distance doctor visits, which cost money for fuel, and other standard living exenses. So...guess what got used? Yup. Not by choice, this time...we had to. So, now guess what? Yup, I'm in deep again. I don't make enough to make $250/mnth payments on it...the minimum is $94, I pay $110. It's the most than I can do. It will be gone about the time I die. I'm 27.

We have come across a home refinancing prospect that looks VERY good, and we have persued it and are awaiting the final decision. It would eliminate ALL the credit card debt, and the two charge offs that we have. I supposed that's contrary to my subject title, but not everyone can do this sort of thing. Now, I will provide you with the link and text to a story about Capital One. As far as I'm concerned, it should apply to ALL credit card companies, as they all tend to practice the same way. I remember being told when my interest rate ran up to 27.49% due to some late payments that in a year, they could work with me. Now, they say they can't because the account is closed. I told them, it was closed when you raised it, please lower it, too. They won't. Anyways, here's the link:

http://www.msnbc.msn.com/id/6781155/

Here's the text:

Quote:

Minnesota AG says ‘fixed rate’ ads are misleading
By Bob Sullivan
Technology correspondent
MSNBC
Updated: 4:40 p.m. ET Jan. 3, 2005

The Minnesota state attorney general’s office has sued one of the nation's largest credit card issuers, claiming it is misleading consumers with promises of “fixed“ interest rates, then hiking their rates as much as 400 percent.

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Capital One and its subsidiaries are using bait-and-switch sales tactics, according to Attorney General Mike Hatch. While the firm markets credit cards as having the nation's lowest “fixed rates,“ rates can and often do change, the lawsuit alleges. In fact, 40 percent of Minnesota residents who've signed up with a Capital One card thinking their rate is fixed have hit a “tripwire,” causing an overnight rate hike, Hatch said.

“(They are) changing the English language,” he said. “Fixed rates don't mean fixed at all.”

A Capital One spokesperson said the firm couldn't comment on the litigation, but offered a general statement.

“Capital One has cooperated fully with the investigation and believes it has acted properly and in full compliance with the law,” said Tatiana Stead. “We regret the attorney general has chosen to proceed with the lawsuit, but we intend to continue to cooperate with (his) office.”

Capital One's well-known “no-hassle card” television advertisements feature crowds of assaulting Vikings, representing high-interest rates chasing after consumers as they are about to make a credit card purchase. The lawsuit says the TV ads are “simply false.”

It also claims other Capital One marketing tools, such as direct mail solicitations, break Minnesota's laws prohibiting false advertising, consumer fraud and deceptive trade practices. The lawsuit seeks an end to the marketing practices, and a return of any profits the firm has garnered as a result of misleading advertisements.

People surprised by 'penalty rates'
Consumers are often surprised by the tripwires that can trigger a “penalty rate,” Hatch said. The lawsuit claims such tripwires are myriad, and are only mentioned in small print that appears for a few seconds on television advertisements, or at the bottom of direct mail solicitations. Late payments to Capital One — or other creditors — can trigger a chain of events that lead to rate increases, he said.

“Capital One aggressively markets its brand image as the credit card company with the nation's lowest fixed rates,” Hatch said. “But that image is false. If you do something as simple as pay a day late, your rate with Capital One can skyrocket overnight.”

The firms' credit card business is booming. According to its most recent SEC filings, Capital One's domestic credit card loans totaled $46.1 billion as of Sept. 30, 2004 — earning the firm a quarterly income of $414.4 million, a 50 percent increase from the same period in 2003. Capital One spent $827 million on marketing from January through September of this year, and claims it has 46 million customers.

According to the lawsuit, Zimmerman, Minn. resident Nicole Bourgeois signed up for a Capital One card in July 2003 after seeing a TV ad. She directly asked if her 4.9 percent rate would stay the same for the life of the card, and was told it would. In March 2004, she was notified that her rate had jumped to 14 percent. Bourgeois contends she always paid her bills on time. Another consumer, Robert Stein of Walker, Minn. said his rate went from 4.99 to 6.99 because he made one payment that was two days late.

Evasive telemarketers
The firms' marketing tactics are intentionally misleading, Hatch said. In one direct mail solicitation, Capital One describes its 4.99 percent interest rate as “low” 13 times and as “fixed” 17 times. Then, when consumers contact Capital One to apply for the card, Capital One telemarketers are prepared with scripts designed to evade a direct response to the question “What does fixed mean?”

In one script, phone operators are told to answer, “Unlike most credit card companies, Capital One's fixed rate is not variable and will not go up and down as interest rates change.”

“Only if a consumer 'probes' another two times does Capital One concede that it cannot guarantee that its rates will stay the same forever,” according to the attorney general's office.

In fact, consumers who qualify for a 4.99 percent interest rate can end up with a 20 percent “penalty rate,“ according to the lawsuit. Other consumers with higher initial rates can see penalty rates of up to 26 percent. Such increases apply to the consumer's entire balance, even if earlier purchases were made when the consumer believed a lower rate applied.

Other rate-hike practices irk consumer advocates
Another Minnesota resident, Patsy Trusty, complained to Hatch's office that her credit limit was lowered by Capital One without prior notification, and as a result, she was hit by late fees and ultimately a higher interest rate. The limit was lowered because her credit score had dropped, according to the lawsuit.

The controversial tactic is called “universal default“ by credit card issuers. Credit card firms pull consumer credit reports as often as once a month to see if there’s a late payment or other event that lowers a consumer's credit score. According to the industry, any late payment — even to an unrelated creditor, such as an auto loan issuer — makes a consumer a higher risk, and gives the credit card issuer the right to raise interest rates. Credit bureaus have specific products designed to catch consumers who are late with any bill.

The practice irks consumer advocates, who think late payment to one lender shouldn't impact interest rates charged by another — and believe the practice is simply designed to give credit card firms an excuse to raise rates.

“Consumers don't realize that there's no such thing as a truly fixed rate anymore,“ said Liz Putnam Weston, personal finance columnist for MSN.com and author of the recently-released Your Credit Score. “They discover the truth when they get a statement and find their rate has skyrocketed. Sometimes the rate hike resulted from something they did, like sending a payment in late, but other times it's because the credit card company simply changes its policy.“

Capital One's Stead said that while universal default is a standard industry practice, Capital One doesn't engage in it. She said the firm does not raise interest rates based on consumer payments to other lenders. But Hatch said the firm does lower credit limits based on lower credit scores, which can result in effectively the same thing — and the practice isn't fair.

“It's a misrepresentation,“ he said. “People are not aware you can adversely effect your relationship with one lender because of a transaction with an unrelated party.“

Robert Manning, author of “Credit Card Nation” and a frequent critic of the industry, said consumers are often at the mercy of lenders, which give themselves the right to change the terms of their member agreements at any time.

“The contracts are one-sided. The consumer has to honor whatever the industry offers, but industry doesn't have to offer anything in return,“ Manning said. Manning said consumers should be given a 60 to 90 day grace period before interest rates are raised so they have a change to either pay off the debt or shop for a better rate from another lender. Consumers should also be told what they have to do to get back to their original low rate. “I have yet to see a single credit card (issuer) do that,“ he said.

Not a level playing field
While Capital One couldn't comment on Stead's case, the firm maintains any interest rate increase is solely the result of consumer payment history with Capital One.

Either way, any rate increases to so-called “fixed rates“ is unfair to both consumers and other lenders, Hatch said. Lenders must compete for business based on interest rates. Allowing firms to misrepresent low rates as fixed rates is unfair to firms that offer true fixed rates, Hatch said. Hatch's office is investigating other credit card issuer marketing practices, he said.

“It's not a level playing field,“ he said. “There's tremendous incentive for bankers to engage in this kind of practice.“
© 2005 MSNBC Interactive

Now, y'all discuss. I want to hear your thoughts on this...and what you're doing to get out of credit card trouble.

Dawson70 · 01-15-2005, 04:56 PM

Hmmmm....makes me want to cut up my Capitol One Card.
But...they all suck!. I was "scolded" by AMEX Corp for NOT using my card. Can you believe that? They threatened to discontinue services to me if I didn't use it. I always kept it for emergencies, but never used it. (4 years). I cancelled the card.

roderickpsu · 01-15-2005, 07:34 PM

can you borrow from anyone to pay this off?....sometimes parents will lend the money knowing they will most likely never see it back...but you need to try something

DEI37 · 01-15-2005, 07:43 PM

I did get some help from my dad already to get in to our house. Hopefully, the refinance deal will take care of it. Tax time is here, too, and that's good news for us. Healthy returns are routine here.

Obtuse · 01-16-2005, 03:52 AM

First off, jacking up the rate because of late payments is nothing new. Most credit card companies have that policy. I don't quite understand why such a big deal is being made of it in this lawsuit. "Fixed-Rate" cards are simply cards that will have one interest rate for as long as the card-holder doesn't somehow screw up. As opposed to "Introductory-Rate" cards that have a low rate for 6 months or a year, then a higher rate. Unless there is something more to this story than is being mentioned in that article, the Capitol One hasn't done anything wrong; at least not with regards to its interest rates.

As for how to get out of debt. Try getting a new card with a low rate and transferring the entire balance of your old card to the new one. Short-term this isn't a whole lot of help, but it will save you some cash in the long run. Oh and be sure to pay your bill on time, otherwise you'll find yourself right back where you started.

ziadel · 01-16-2005, 11:09 AM

I just caught this the other day on fark and it was disturbing to say the least...

http://www.pbs.org/wgbh/pages/frontline/shows/credit/

I especially like the interview with andrew kahr, I learned a lot from that one..

the credit card industry is certainly an odd one, but the jacing of interest rates is pretty fucked up, but to be honest, I can see why amex bitched about you not using their card, its a business, not a charity, they're in it to make money, and if you dont use the card, they dont make any... but it was your right to shitcan your account, I woulda done the same thing

and I find all this business about capital one disturbing, I wish I could cut up my card, but they were the only ones to offer to extend me any credit (my first card), so I'll tough it out until some of the prime cards make me offers, then I'll toss the damn thing down the garbage disposal

p.s. andrew kahr is the asshat that came up with universal default....

intecel · 01-17-2005, 11:54 AM

I love it... you can't make your payment, so they jack up your interest rate even more so you're completely f'ed. Gotta love the world we live in .

asshopo · 01-19-2005, 11:24 AM

I was really dumb about using my credit cards from the ages of 19-21. I am about $8,000 in debt + $8,500 owed on my Ford Escort ZX2. The neverending payments are horrible and I have 2 accounts that the companies won't charge off and have served me papers over. Some credit accounts have raised interest, continued to charge interest after the account was closed, etc and some accounts have gone from a measley $1,000 to over $2,500-3,500!

I tried the re-fi thing with my house. They took out insurance and taxes. The plan was to lower my house payment for roughly a year in order to take the extra money to pay credit. Well, that hasn't happened because there isn't enough money coming in in a month to pay everything the way it should. My credit score didn't boost enough from what I had when I re-fi'ed last April and now I have to find money to pay off credit in order to boost my score to re-fi again. Meanwhile, my taxes are overdue and my home insurance is coming up in April '05. Another $2,500-3,000 I don't have just laying around.

Now, with tax time coming, I have to decide what credit accounts to pay off to boost my credit score enough to get the proper loan-to-value in order to pay off the car, allowing me to pay off the rest of the debt. If I can't pay off the car somehow, it's basicly pointless to try (not that I will give up, I will end up loosing the house and car) to do anything with my situation.

Either all that or rob a bank :-/.

I know it sounds like I'm complaining about credit card companies and expecting my house value to fix my problems, but I do realize that I started this mess. It's just once your in the mess, you don't know how to get out.

Cynthetiq · 01-19-2005, 02:10 PM

The frontline show was really eye opening... I don't believe in credit cards but the wife has forced me to use the loyalty cards for our basics (gas, phone, groceries, commuting) and they are paid off each and every month 100%.

I have always thought that the credit card industry learned how to intimidate and run the juice on people all from the mob. There's just no broken bones and dead people, just trashed lives.

LLL2 · 01-19-2005, 06:13 PM

That's why I don't have an credit card though.I use my debt card when I need to buy something off the internet,all they do is take it outta my bank account.But that's because i knew someone that's has the same problem like yours,and thought I better not get a CC.But I really have no bills see how I live at home still.Also my credit probably sucks see how I have no monthly bill. Oh well.

Rinndalir · 01-21-2005, 02:09 PM

I hate credit cards, but they're almost impossible to avoid. I only use them if I can get a 0% rate, typically the best way to do this store cards like Sears or Firestone. Such as, I had to replace both my oven and my washing machine at the same time last year, total bill was much more cash than I had onhand at the time. However I was able to talk the salesman at Sears into giving me 0% APR for a year on the purchases. Same thing at Firestone with a set of new tires for my truck when 2 of them blew in a week, 0% for 90 days. Got the stuff I needed, was able to split it up into manageable payments, and in the end no interest so I win.

Of course it would be so easy to not pay for the grace peroid and buy more stuff, the trap is you usually don't have to make a payment during that time. You forget about it then BAM 30% interest on your total balance.

I plan on teaching my kid how evil credit cards are, just like my dad taught me, so hopefully that will be one less statistic added to the $10k per household credit card debt average.

Hardknock · 01-21-2005, 10:52 PM

I think that you just have to control yourself. I personally have over $25,000 in plastic right now. Does that mean that I go out and charge till I drop? Fuck no. You have to exercise a little self control when you have that plastic in your pocket. For me, I live by the philosophy, if you don't have it then don’t spend it. That keeps me out of trouble.

Demeter · 01-22-2005, 06:45 PM

A bank loan, with a decent interest rate is the best answer to pay off higher interest credit cards. I had to do that when my husband died & left me with debt & no insurance to cover his bills. There's a big difference between 7% and 27%.

Nunquam_Idem · 07-19-2005, 02:12 PM

I used to think I had credit cards under control, but I've lost that control.

Our total credit limits (not debt, just the limits of all of them put together) is over $45K that I am aware of.

We had been living within our means, then we bought a house and a bunch of appliances and remodeling later, now we're neck deep in debt. I thought it would be worth it to have the house nice and livable up front rather than later when I actually had the money for it, now that I can't make all the payments, I'm regretting the debt.

I think we found a decent way out through a debt consolidation company. They apparently contact the creditors and get them to lower the rates and put us on a plan to pay them off. For instance, they can get places like Chase and Discover to lower their percentages from 21% down to 10%. I called last night and could only get Discover to go down to 17% for me, so they do seem to have something special.

AmEx is charging 6% on a big balance ($9K) and they get whacked down to an effective 0% until paid off.

It will take a couple years, but we'll pull out of it. Just have to tighten up...

Xazy · 07-20-2005, 03:47 AM

I would call the state attorney general, make a report, they will change their toon quick. This is why I was upset by the new bankrupcy law (not sure if it passed, but pretty sure it did), that dealt with disallowing bankrupcy to remove credit card debt, but not putting limits to the % of interest credit cards can charge.

pghboy · 08-15-2005, 03:24 PM

The only thing a debt consolidation company did for me was to open my eyes. After going through the whole application (and breakdown of expenses) they found that I still had $500 on hand each month after ALL expenses including $200 in savings. I am 24, single, recent college grad making a good salary.
After running a few numbers, I called all 4 credit card companies and arranged short term payment plans. Note: at a point, I had all 4 cards maxed totalling about $15000 in debt. 3 months later I have 3 cards below the limit and 1 on its way next month. Whats more, Citicards who controls 2 of 4 cards called me to tell me that they will be reopening my account next month.
On the other hand, if I had gone with debt management companies, TRUE that they would have arranged for lower interest rates - but apparently that looks really bad on the credit report - not being able to manage your own debt. Plus, I was told that during the 3 years of debt management, all 4 cards are closed and one has no operating credit. I prefered to pay a little more in interest and get credit operation back. Its going ok now, and I am watching every penny I spend including maintaining a detailed spreadsheet of expenses.
In July when I got a bonus, I put 75% of it towards debt payments - figured, I hadn't planned for it so might as well spend it towards past indulgences.

FngKestrel · 08-15-2005, 04:52 PM

Quote:

Originally Posted by LLL2

That's why I don't have an credit card though.I use my debt card when I need to buy something off the internet,all they do is take it outta my bank account.But that's because i knew someone that's has the same problem like yours,and thought I better not get a CC.But I really have no bills see how I live at home still.Also my credit probably sucks see how I have no monthly bill. Oh well.

I thought like that for a long time until I tried to get a cellphone recently and was turned down. No credit is about as bad as bad credit. To get a card, I had to open an account with Wells Fargo, and get a secured credit card with them. I'm only using it to pay off bills and building up credit slowly.

It takes time to build up credit and time to get rid of bad credit. Good luck.

Catdaddy33 · 08-16-2005, 06:18 AM

We had about 60K on credit cards and it took us 4 years to pay them all off. We closed all the accounts and during the "payback" phase we made min payments on all but 1 and threw money at that one till it was paid. We would get calls all the time offering to reopen and drop the interest rate, made the mistake once of telling one bank our plan, and they offered to "consolidate" some of our other cards by upping our limit, we didn't. We did miss a payment or 2 here and there and got slammed with fees and more interest.

After that exercise, we decided to never open a credit line again, if we can't pay cash then we can't afford it. We've entertained the idea of getting one for hotel or car reservations, since most places will put a hold on debit cards, but we've been ok so far..

Stiltzkin · 08-16-2005, 10:11 AM

Quote:

Originally Posted by Catdaddy33

if we can't pay cash then we can't afford it.

This is the lesson my father preached to me since I was a young lad. A good lesson, I would have to say.

Merlocke · 08-19-2005, 10:53 PM

guys - the whole if you miss a payment thing by accident is written all over the contract you have to sign. (I just applied for one)
If I never miss a payment to them, then I shouldn't have to worry. Setup pre approved chequing - whatever the hell you need to get it done but in Canada that 4.9% rate it the lowest it gets.

forcards.com is a nice site that just gives info on the lowest card rates.

HOWEVER if I miss a payment elsewhere and they raise my rates - there will be hell to pay. AND if they keep bringing up my credit report, there will be more hell to pay if I lose points on them just checking in on me.

Marvelous Marv · 08-20-2005, 10:14 AM

I just got a "refinance" offer in the mail. These turds knew the total of my mortgages, the remaining balance of my car loan, and my credit cards.

I'm going to find out who ran my credit without my permission.

I have a ton of credit card debt, but it's "good debt." Business equipment and the like. I've been switching it from one 0% interest card to another for three years now. I could pay it if necessary, but since it's zero, I just pay it at a convenient pace.

I make sure I'm not late on payments anywhere, though. I highly recommend on-line payments so your check doesn't get "lost in the mail" like Bank One, which is now Chase, did to me once. They were really rude about THEIR mistake, too.

One other cautionary note: You can reverse a CC payment for phone and internet orders. You can NOT do that with debit cards.

So be careful who you're dealing with in regard to the debits.

zakool21 · 08-29-2005, 06:59 PM

Quote:

Originally Posted by Hardknock

I think that you just have to control yourself. I personally have over $25,000 in plastic right now. Does that mean that I go out and charge till I drop? Fuck no. You have to exercise a little self control when you have that plastic in your pocket. For me, I live by the philosophy, if you don't have it then don’t spend it. That keeps me out of trouble.

At my age (19), a statement like yours has given me a pretty strong reason to avoid getting a credit card for another 5-7 years at the minimum.

I'm paying off a $5,500 loan for my car and have my own insurance policy (roughly $100/mo), so I am gaining credit in this regard. I can't find a single other solid reason to get a credit card, other than the fraud security (almost matched by that of my check card) and maybe cash dividends for my purchases.

IC3 · 08-30-2005, 05:46 AM

Quote:

Originally Posted by zakool21

At my age (19), a statement like yours has given me a pretty strong reason to avoid getting a credit card for another 5-7 years at the minimum.

Good Idea

I got a mastercard when i was about 19 or 20, I used it for things that needed to be done (Car repairs ect) but i also used it for things i really didn't need, But i wanted them

I don't think that i'm badly in debt, It bugs me though. I just recently got a 10 thousand dollar credit line through another bank, The plan is to transfer my creditcard debt to this credit line..The interest is way lower.

With this new credit line, That put's me at about 20 thousand dollars credit..Not in debt lol.
I sit here and think about that kind of credit, And it's scares me..What if i wake up one day and want a new car

I have learned my lesson though, And i am itchin to start paying off this debt.

aswo · 09-06-2005, 03:10 PM

There are no such things as fixed rated with credit cards, and the dishonest thing about it is the credit card companies will advertise that they are fixed

Catdaddy33 · 09-09-2005, 06:36 AM

Just an observation...

When I started college in 1985 I couldn't get a credit card to save my life, my Dad had to co-sign. The only reason he did was to establish credit and was only to be used in emergencies (and under threat of death it was never used). When my wife started college in 1988, part of the "welcome" package was a credit card application from Citibank, that guaranteed a credit card for 18 yr old college students, with no job. It was only a $500 limit but that could increase as long as you never were late. Soon other banks started and the credit card push into massive debt was underway...

zakool21 · 09-09-2005, 09:17 AM

Interesting story Catdaddy33, I thought it was more recent that they started giving them out like they were candy.

I went into the bank yesterday (BofA), and despite what I said in my above post, I ended up applying for a student Visa card. I really don't want to use it, but I figure I can use it for my larger purchases ($1000 limit) when I actually make them.

testangel · 10-01-2005, 07:59 AM

A European view:

Banks and credit card organizations are there to make money. And they "shave you" as much as they can.
Before your "larger purchase" even might be written off you still will have to pay for the credit, interest, fees etc.

Knowing this why

- don't you s a f e the money until you can pay for the car ore whatever you need so badly to purchase (exptions from this rule are investments like houses etc.)?

- buy a smaller car or a cheaper second hand one instead of using a credit?

This way one never gets into trouble and will be able to buy all the nice things and even more - only a little later - and certinly without any headaches how to repy loan in future.

Marvelous Marv · 10-01-2005, 02:27 PM

Quote:

Originally Posted by aswo

There are no such things as fixed rated with credit cards, and the dishonest thing about it is the credit card companies will advertise that they are fixed

It works the other way too. I had a 0% rate on a card, and then used it for a recurring monthly $7.95 purchase.

Then I noticed a $.50 charge each month, even though I was paying a lot more than the minimum monthly payment. It's because of their little kicker that payments are applied to "old debt" first, then "new debt."

So I paid it off, and called to cancel the card. That got me turned over to two different people, both of whom offered me their "such a deal" interest rate if I wouldn't cancel the card.

So if you're in a position to cancel a card, you might try that. They can adjust your rate to whatever they want, both higher AND lower.

oberon · 10-01-2005, 03:04 PM

Personally, I think credit cards are only useful for Internet purchases and establishing credit. As a rule, I don't buy anything I can't pay off within the month.

Debt is useful and appropriate for only two things, in my opinion: education and a home. I have and will only buy vehicles, electronics, furniture, etc. outright.

As a result, other people owe me money, instead of the other way around.

Marvelous Marv · 10-01-2005, 03:49 PM

Quote:

Originally Posted by oberon

Personally, I think credit cards are only useful for Internet purchases and establishing credit. As a rule, I don't buy anything I can't pay off within the month.

Debt is useful and appropriate for only two things, in my opinion: education and a home. I have and will only buy vehicles, electronics, furniture, etc. outright.

As a result, other people owe me money, instead of the other way around.

And business equipment.

Not a bad philosophy, but you can get hurt when other people owe YOU money, too.

BigBlueWrecking · 10-04-2005, 11:54 AM

Credit Card companies are scum, but I have a hard time blaming them for other people charging debt. I have plenty of friends that have done it, and I feel for my friends, but it is 100% their fault. Either they did not read about it and ran the card up, of they knew they didn't have the money.

Point of the matter is this, if you don't have the money to pay something off right away...DON'T BUY IT.

Using credit cards to buy things that you pay off immediately can be a great idea, but only if you pay it off right away!

Xazy · 10-06-2005, 08:49 AM

It is simple, credit cards are good for free points and crap, and that is it!! I use mine all the time for everything. Rule is simple must pay it all off, every month!

Cynthetiq · 12-21-2005, 09:29 AM

I dunno how it's going to be beatable anymore...

Quote:

Banks raise credit card payments
By Kathy Chu, USA TODAY
In case you weren't spending enough this holiday season to buy gifts and heat your home, you may have to take another hit: higher credit card payments.
Nearly three years after regulators said minimum monthly payments should let you pay off debt in a "reasonable period of time," some banks are finally acting.

Most of the top 10 credit card issuers have raised their minimum payments this year. And in most cases, they've done so this quarter. (Story: Digging deeper to pay credit minimums)

Regulators urged banks to adjust their minimum payments by the end of 2005. The banks' delayed response to the guidelines issued in January 2003 means millions of people are being hit with higher credit card bills this holiday season.

The increase comes just as energy bills are soaring and a new bankruptcy law has made it harder to erase debt.

"It's quite simply disappointing that banks have waited and have not increased the minimum gradually but are doing it during the holidays," says Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group.

Banks say it takes time to update systems to accommodate the regulators' instructions. "These are not simple changes," says Alan Elias, a spokesman for Washington Mutual.

Still, "with a few exceptions, we expect them to be in compliance by year's end," says Barbara Grunkemeyer of the Office of the Comptroller of the Currency, one of the agencies that issued the guidelines.

Regulators didn't require minimum payments to rise by a fixed amount. But they said payments should cover fees and finance charges, plus 1% of principal. Until now, some minimums didn't even cover the interest owed, so debt would just keep growing.

Some card holders could see their minimum payment double, to 4% of the balance from 2%. On a $10,000 balance, the payment could jump to $400 from $200.

In the long run, the change is healthy for consumers: It means they'll pay off their credit cards more quickly. But at least at first, the higher payments could create financial hardship.

John Penn of the American Bankruptcy Institute expects more filings from low-income consumers who can't handle higher credit card payments. "If one of your bills doubled, it won't knock you out of the game immediately," Penn says. "You'll be late on some other bills, and you'll scramble, and it'll catch up to you eventually."

Yet it may not be feasible for some to declare bankruptcy.

"If (issuers) had done this a year ago, consumers who were underwater may have considered bankruptcy," but they may think twice about doing so after the stricter bankruptcy rules have taken effect, says Chi Chi Wu, staff attorney at the National Consumer Law Center.

I use a loyalty card for all my purchases and pay it off every single month.

I think that it is horrendous that people who are already "working poor" overstretched past their limits and just paying minimum payments now makes them even more "indentured servants."

Xazy · 12-21-2005, 10:04 AM

Pay off every month, and get points baby!

Jimellow · 12-21-2005, 10:27 AM

My parents always stressed the importance of buying only what I could afford, and not going into debt; and I haven't.

I do use a credit card for all gas and grocery purchases, thus getting 5% cash back throughout the year, but I never carry a debt, and pay the balance off in full each month. I have, and continue, to buy everything I own outright, and not through credit and periodic payments. It also helps that I am pretty frugal by nature.

Credit cards can be rewarding if used intelligently, but otherwise they are an easy way of putting oneself in a lot of trouble, for a lenthy portion of their life.

Personally, I find that using, and paying off, a credit card each month gives me a feeling of responsibility and also comfort, because it's an indication to me that I am handling my finances well, not getting in over my head, and also being rewarded lightly for doing so.

Aside from that though, a credit card would be the last thing I turned to in case of emergency, strictly because it will ultimately only extend the emergency/fallout for many years down the road.

Emergencies can't be prevented, but their fallout can be controlled; and to me using credit cards specifically with an emergency, is a sure way of causing long term fallout.

Also, I am not concerned with a high APR%, due to it being motivation for me not to go into debt. Low APRs make it much more tempting to run up a high balance, so in a way I kind of prefer having a high APR rate to sway me from even considering going into debt in the first place.. Cash rewards cards seem to have higher APRs by nature, and thus, I consider such a card ideal for me on all levels.

NeoSparky · 12-23-2005, 01:06 PM

every 6 months to a year my rates get jacked up to the 16-20% range. All I do is call and ask for the retention specialist department. (aka, "I"m going to cancel my card" ) and once there they have the power to do anything to keep you as a customer. I've just did this again recently and dropped my rates from 13-15% down to some with 0% for a year and others with 3% for a year. It does help i've had the same 2 accounts for nearly 9 years in excellent standing (aka, i pay something every month) and for about 4 years of that I had the balance paid in full, but going back to school extended me beyond my means.

yotta · 01-06-2006, 09:35 AM

I have three credit cards, one of which is my mail credit card, and the other two each have a small utility autopayment on them each month. Those two I pay off every month. My 'main' card I sometimes keep a small balance on (but always small enough that I can pay it off within a week or two). I'm careful to always pay on time, and am a strong beliver of the 'the best way to aquire wealth is to not aquire debt'. I'm 21. Credit cards are to be treated with extream caution, but I like them for two reasons.

1) In contrast to using my banks visa debit card, I do not 'lose' my money if someone rips off my credit cards. In theroy, it shoud be far less painful to deal with, and will not immediatly put me in a bad financial situation.

2) I am building credit. My credit score is currently around 750 after less then 2 years of credit history.

01-15-2005, 04:56 PM	#2 (permalink)
Dawson70 Here to Help My Fellow TFP'er Location: All over the Net....(ok Wisconsin)	Hmmmm....makes me want to cut up my Capitol One Card. But...they all suck!. I was "scolded" by AMEX Corp for NOT using my card. Can you believe that? They threatened to discontinue services to me if I didn't use it. I always kept it for emergencies, but never used it. (4 years). I cancelled the card. __________________ "I Finally Finished My Goal....You Can Too! Yippie Ki Ya...

01-15-2005, 07:43 PM	#4 (permalink)
DEI37 Go faster! Location: Wisconsin	I did get some help from my dad already to get in to our house. Hopefully, the refinance deal will take care of it. Tax time is here, too, and that's good news for us. Healthy returns are routine here. __________________ Generally speaking, if you were to get what you really deserve, you might be unpleasantly surprised.

01-16-2005, 03:52 AM	#5 (permalink)
Obtuse Upright Location: Ominous, I'm In Us	First off, jacking up the rate because of late payments is nothing new. Most credit card companies have that policy. I don't quite understand why such a big deal is being made of it in this lawsuit. "Fixed-Rate" cards are simply cards that will have one interest rate for as long as the card-holder doesn't somehow screw up. As opposed to "Introductory-Rate" cards that have a low rate for 6 months or a year, then a higher rate. Unless there is something more to this story than is being mentioned in that article, the Capitol One hasn't done anything wrong; at least not with regards to its interest rates. As for how to get out of debt. Try getting a new card with a low rate and transferring the entire balance of your old card to the new one. Short-term this isn't a whole lot of help, but it will save you some cash in the long run. Oh and be sure to pay your bill on time, otherwise you'll find yourself right back where you started. __________________ Truth cares not for knowledge.

01-16-2005, 11:09 AM	#6 (permalink)
ziadel Myrmidon Location: In the twilight and mist.	I just caught this the other day on fark and it was disturbing to say the least... http://www.pbs.org/wgbh/pages/frontline/shows/credit/ I especially like the interview with andrew kahr, I learned a lot from that one.. the credit card industry is certainly an odd one, but the jacing of interest rates is pretty fucked up, but to be honest, I can see why amex bitched about you not using their card, its a business, not a charity, they're in it to make money, and if you dont use the card, they dont make any... but it was your right to shitcan your account, I woulda done the same thing and I find all this business about capital one disturbing, I wish I could cut up my card, but they were the only ones to offer to extend me any credit (my first card), so I'll tough it out until some of the prime cards make me offers, then I'll toss the damn thing down the garbage disposal p.s. andrew kahr is the asshat that came up with universal default.... __________________ Ron Paul '08 Vote for Freedom Go ahead and google Dr. Ron Paul. You'll like what you read. Last edited by ziadel; 01-16-2005 at 11:13 AM..

01-19-2005, 11:24 AM	#8 (permalink)
asshopo Insane Location: Michigan	I was really dumb about using my credit cards from the ages of 19-21. I am about $8,000 in debt + $8,500 owed on my Ford Escort ZX2. The neverending payments are horrible and I have 2 accounts that the companies won't charge off and have served me papers over. Some credit accounts have raised interest, continued to charge interest after the account was closed, etc and some accounts have gone from a measley $1,000 to over $2,500-3,500! I tried the re-fi thing with my house. They took out insurance and taxes. The plan was to lower my house payment for roughly a year in order to take the extra money to pay credit. Well, that hasn't happened because there isn't enough money coming in in a month to pay everything the way it should. My credit score didn't boost enough from what I had when I re-fi'ed last April and now I have to find money to pay off credit in order to boost my score to re-fi again. Meanwhile, my taxes are overdue and my home insurance is coming up in April '05. Another $2,500-3,000 I don't have just laying around. Now, with tax time coming, I have to decide what credit accounts to pay off to boost my credit score enough to get the proper loan-to-value in order to pay off the car, allowing me to pay off the rest of the debt. If I can't pay off the car somehow, it's basicly pointless to try (not that I will give up, I will end up loosing the house and car) to do anything with my situation. Either all that or rob a bank :-/. I know it sounds like I'm complaining about credit card companies and expecting my house value to fix my problems, but I do realize that I started this mess. It's just once your in the mess, you don't know how to get out. __________________ Patterns have a habit of repeating themselves.

01-15-2005, 07:34 PM	#3 (permalink)
roderickpsu Crazy Location: State College, PA	can you borrow from anyone to pay this off?....sometimes parents will lend the money knowing they will most likely never see it back...but you need to try something

01-17-2005, 11:54 AM	#7 (permalink)
intecel Psycho	I love it... you can't make your payment, so they jack up your interest rate even more so you're completely f'ed. Gotta love the world we live in .

01-19-2005, 02:10 PM	#9 (permalink)
Cynthetiq Tilted Cat Head Administrator Location: Manhattan, NY	The frontline show was really eye opening... I don't believe in credit cards but the wife has forced me to use the loyalty cards for our basics (gas, phone, groceries, commuting) and they are paid off each and every month 100%. I have always thought that the credit card industry learned how to intimidate and run the juice on people all from the mob. There's just no broken bones and dead people, just trashed lives. __________________ I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not. What's the best nation in the world? DO-NATION!

01-19-2005, 06:13 PM	#10 (permalink)
LLL2 Crazy	That's why I don't have an credit card though.I use my debt card when I need to buy something off the internet,all they do is take it outta my bank account.But that's because i knew someone that's has the same problem like yours,and thought I better not get a CC.But I really have no bills see how I live at home still.Also my credit probably sucks see how I have no monthly bill. Oh well.

01-21-2005, 02:09 PM	#11 (permalink)
Rinndalir Insane	I hate credit cards, but they're almost impossible to avoid. I only use them if I can get a 0% rate, typically the best way to do this store cards like Sears or Firestone. Such as, I had to replace both my oven and my washing machine at the same time last year, total bill was much more cash than I had onhand at the time. However I was able to talk the salesman at Sears into giving me 0% APR for a year on the purchases. Same thing at Firestone with a set of new tires for my truck when 2 of them blew in a week, 0% for 90 days. Got the stuff I needed, was able to split it up into manageable payments, and in the end no interest so I win. Of course it would be so easy to not pay for the grace peroid and buy more stuff, the trap is you usually don't have to make a payment during that time. You forget about it then BAM 30% interest on your total balance. I plan on teaching my kid how evil credit cards are, just like my dad taught me, so hopefully that will be one less statistic added to the $10k per household credit card debt average.

01-21-2005, 10:52 PM	#12 (permalink)
Hardknock Republican slayer Location: WA	I think that you just have to control yourself. I personally have over $25,000 in plastic right now. Does that mean that I go out and charge till I drop? Fuck no. You have to exercise a little self control when you have that plastic in your pocket. For me, I live by the philosophy, if you don't have it then don’t spend it. That keeps me out of trouble.

01-22-2005, 06:45 PM	#13 (permalink)
Demeter Psycho	A bank loan, with a decent interest rate is the best answer to pay off higher interest credit cards. I had to do that when my husband died & left me with debt & no insurance to cover his bills. There's a big difference between 7% and 27%.

07-19-2005, 02:12 PM	#14 (permalink)
Nunquam_Idem Tilted Location: On the 'Mostly Harmless' planet Earth	I used to think I had credit cards under control, but I've lost that control. Our total credit limits (not debt, just the limits of all of them put together) is over $45K that I am aware of. We had been living within our means, then we bought a house and a bunch of appliances and remodeling later, now we're neck deep in debt. I thought it would be worth it to have the house nice and livable up front rather than later when I actually had the money for it, now that I can't make all the payments, I'm regretting the debt. I think we found a decent way out through a debt consolidation company. They apparently contact the creditors and get them to lower the rates and put us on a plan to pay them off. For instance, they can get places like Chase and Discover to lower their percentages from 21% down to 10%. I called last night and could only get Discover to go down to 17% for me, so they do seem to have something special. AmEx is charging 6% on a big balance ($9K) and they get whacked down to an effective 0% until paid off. It will take a couple years, but we'll pull out of it. Just have to tighten up... __________________ Oh no, not again.

07-20-2005, 03:47 AM	#15 (permalink)
Xazy People in masks cannot be trusted Location: NYC	I would call the state attorney general, make a report, they will change their toon quick. This is why I was upset by the new bankrupcy law (not sure if it passed, but pretty sure it did), that dealt with disallowing bankrupcy to remove credit card debt, but not putting limits to the % of interest credit cards can charge.

08-15-2005, 03:24 PM	#16 (permalink)
pghboy Upright	The only thing a debt consolidation company did for me was to open my eyes. After going through the whole application (and breakdown of expenses) they found that I still had $500 on hand each month after ALL expenses including $200 in savings. I am 24, single, recent college grad making a good salary. After running a few numbers, I called all 4 credit card companies and arranged short term payment plans. Note: at a point, I had all 4 cards maxed totalling about $15000 in debt. 3 months later I have 3 cards below the limit and 1 on its way next month. Whats more, Citicards who controls 2 of 4 cards called me to tell me that they will be reopening my account next month. On the other hand, if I had gone with debt management companies, TRUE that they would have arranged for lower interest rates - but apparently that looks really bad on the credit report - not being able to manage your own debt. Plus, I was told that during the 3 years of debt management, all 4 cards are closed and one has no operating credit. I prefered to pay a little more in interest and get credit operation back. Its going ok now, and I am watching every penny I spend including maintaining a detailed spreadsheet of expenses. In July when I got a bonus, I put 75% of it towards debt payments - figured, I hadn't planned for it so might as well spend it towards past indulgences.

08-16-2005, 06:18 AM	#18 (permalink)
Catdaddy33 Psycho Location: TN	We had about 60K on credit cards and it took us 4 years to pay them all off. We closed all the accounts and during the "payback" phase we made min payments on all but 1 and threw money at that one till it was paid. We would get calls all the time offering to reopen and drop the interest rate, made the mistake once of telling one bank our plan, and they offered to "consolidate" some of our other cards by upping our limit, we didn't. We did miss a payment or 2 here and there and got slammed with fees and more interest. After that exercise, we decided to never open a credit line again, if we can't pay cash then we can't afford it. We've entertained the idea of getting one for hotel or car reservations, since most places will put a hold on debit cards, but we've been ok so far..

08-19-2005, 10:53 PM	#20 (permalink)
Merlocke Location: Canada	guys - the whole if you miss a payment thing by accident is written all over the contract you have to sign. (I just applied for one) If I never miss a payment to them, then I shouldn't have to worry. Setup pre approved chequing - whatever the hell you need to get it done but in Canada that 4.9% rate it the lowest it gets. forcards.com is a nice site that just gives info on the lowest card rates. HOWEVER if I miss a payment elsewhere and they raise my rates - there will be hell to pay. AND if they keep bringing up my credit report, there will be more hell to pay if I lose points on them just checking in on me. __________________ -=[ Merlocke ]=-

08-20-2005, 10:14 AM	#21 (permalink)
Marvelous Marv Cunning Runt Location: Taking a mulligan	I just got a "refinance" offer in the mail. These turds knew the total of my mortgages, the remaining balance of my car loan, and my credit cards. I'm going to find out who ran my credit without my permission. I have a ton of credit card debt, but it's "good debt." Business equipment and the like. I've been switching it from one 0% interest card to another for three years now. I could pay it if necessary, but since it's zero, I just pay it at a convenient pace. I make sure I'm not late on payments anywhere, though. I highly recommend on-line payments so your check doesn't get "lost in the mail" like Bank One, which is now Chase, did to me once. They were really rude about THEIR mistake, too. One other cautionary note: You can reverse a CC payment for phone and internet orders. You can NOT do that with debit cards. So be careful who you're dealing with in regard to the debits. __________________ "The problem with socialism is that you eventually run out of other people's money." Margaret Thatcher

09-06-2005, 03:10 PM	#24 (permalink)
aswo Crazy	There are no such things as fixed rated with credit cards, and the dishonest thing about it is the credit card companies will advertise that they are fixed __________________ People who love people

09-09-2005, 06:36 AM	#25 (permalink)
Catdaddy33 Psycho Location: TN	Just an observation... When I started college in 1985 I couldn't get a credit card to save my life, my Dad had to co-sign. The only reason he did was to establish credit and was only to be used in emergencies (and under threat of death it was never used). When my wife started college in 1988, part of the "welcome" package was a credit card application from Citibank, that guaranteed a credit card for 18 yr old college students, with no job. It was only a $500 limit but that could increase as long as you never were late. Soon other banks started and the credit card push into massive debt was underway...

09-09-2005, 09:17 AM	#26 (permalink)
zakool21 Upright	Interesting story Catdaddy33, I thought it was more recent that they started giving them out like they were candy. I went into the bank yesterday (BofA), and despite what I said in my above post, I ended up applying for a student Visa card. I really don't want to use it, but I figure I can use it for my larger purchases ($1000 limit) when I actually make them.

10-01-2005, 07:59 AM	#27 (permalink)
testangel Upright	A European view: Banks and credit card organizations are there to make money. And they "shave you" as much as they can. Before your "larger purchase" even might be written off you still will have to pay for the credit, interest, fees etc. Knowing this why - don't you s a f e the money until you can pay for the car ore whatever you need so badly to purchase (exptions from this rule are investments like houses etc.)? - buy a smaller car or a cheaper second hand one instead of using a credit? This way one never gets into trouble and will be able to buy all the nice things and even more - only a little later - and certinly without any headaches how to repy loan in future.

10-01-2005, 03:04 PM	#29 (permalink)
oberon Quadrature Amplitude Modulator Location: Denver	Personally, I think credit cards are only useful for Internet purchases and establishing credit. As a rule, I don't buy anything I can't pay off within the month. Debt is useful and appropriate for only two things, in my opinion: education and a home. I have and will only buy vehicles, electronics, furniture, etc. outright. As a result, other people owe me money, instead of the other way around. __________________ "There are finer fish in the sea than have ever been caught." -- Irish proverb

10-04-2005, 11:54 AM	#31 (permalink)
BigBlueWrecking Psycho	Credit Card companies are scum, but I have a hard time blaming them for other people charging debt. I have plenty of friends that have done it, and I feel for my friends, but it is 100% their fault. Either they did not read about it and ran the card up, of they knew they didn't have the money. Point of the matter is this, if you don't have the money to pay something off right away...DON'T BUY IT. Using credit cards to buy things that you pay off immediately can be a great idea, but only if you pay it off right away!

10-06-2005, 08:49 AM	#32 (permalink)
Xazy People in masks cannot be trusted Location: NYC	It is simple, credit cards are good for free points and crap, and that is it!! I use mine all the time for everything. Rule is simple must pay it all off, every month!

12-21-2005, 10:04 AM	#34 (permalink)
Xazy People in masks cannot be trusted Location: NYC	Pay off every month, and get points baby!

12-21-2005, 10:27 AM	#35 (permalink)
Jimellow Junkie	My parents always stressed the importance of buying only what I could afford, and not going into debt; and I haven't. I do use a credit card for all gas and grocery purchases, thus getting 5% cash back throughout the year, but I never carry a debt, and pay the balance off in full each month. I have, and continue, to buy everything I own outright, and not through credit and periodic payments. It also helps that I am pretty frugal by nature. Credit cards can be rewarding if used intelligently, but otherwise they are an easy way of putting oneself in a lot of trouble, for a lenthy portion of their life. Personally, I find that using, and paying off, a credit card each month gives me a feeling of responsibility and also comfort, because it's an indication to me that I am handling my finances well, not getting in over my head, and also being rewarded lightly for doing so. Aside from that though, a credit card would be the last thing I turned to in case of emergency, strictly because it will ultimately only extend the emergency/fallout for many years down the road. Emergencies can't be prevented, but their fallout can be controlled; and to me using credit cards specifically with an emergency, is a sure way of causing long term fallout. Also, I am not concerned with a high APR%, due to it being motivation for me not to go into debt. Low APRs make it much more tempting to run up a high balance, so in a way I kind of prefer having a high APR rate to sway me from even considering going into debt in the first place.. Cash rewards cards seem to have higher APRs by nature, and thus, I consider such a card ideal for me on all levels. __________________ Desperation is no excuse for lowering one's standards. Last edited by Jimellow; 12-21-2005 at 10:32 AM..

12-23-2005, 01:06 PM	#36 (permalink)
NeoSparky Crazy	every 6 months to a year my rates get jacked up to the 16-20% range. All I do is call and ask for the retention specialist department. (aka, "I"m going to cancel my card" ) and once there they have the power to do anything to keep you as a customer. I've just did this again recently and dropped my rates from 13-15% down to some with 0% for a year and others with 3% for a year. It does help i've had the same 2 accounts for nearly 9 years in excellent standing (aka, i pay something every month) and for about 4 years of that I had the balance paid in full, but going back to school extended me beyond my means.

01-06-2006, 09:35 AM	#37 (permalink)
yotta Irresponsible	I have three credit cards, one of which is my mail credit card, and the other two each have a small utility autopayment on them each month. Those two I pay off every month. My 'main' card I sometimes keep a small balance on (but always small enough that I can pay it off within a week or two). I'm careful to always pay on time, and am a strong beliver of the 'the best way to aquire wealth is to not aquire debt'. I'm 21. Credit cards are to be treated with extream caution, but I like them for two reasons. 1) In contrast to using my banks visa debit card, I do not 'lose' my money if someone rips off my credit cards. In theroy, it shoud be far less painful to deal with, and will not immediatly put me in a bad financial situation. 2) I am building credit. My credit score is currently around 750 after less then 2 years of credit history. __________________ I am Jack's signature.