Have a credit card? You need to know this!

[Dan Forman]

Here is some real eye opening information about how credit card companies make their money, and it's not from your normal interest rates. A Harvard Law Professor who has testified before congress on abusive lending practices by credit card companies lays it all out. Even if you pay off your total bill each month, there are ways they can get you. Well worth the listen.

http://www.npr.org/templates/rundowns/rundown.php?prgId=13&ps=h1

Dan

[Karl Laustrup]

Thanks Dan. Well worth the time to listen.

Karl

[Belinda Barfield]

Thanks Dan. Ditto what Karl said.

[Jim Becker]

I listened to Terry Gross's piece on this yesterday when driving home from a customer briefing. It's really disturbing about how the financial institutions issuing cards literally prey on their customers and constantly manipulate things to make it way too easy for people to fail...with a huge cost to individuals and society in general. And to think that even with all that gibberish in the card agreements, it basically comes down to (paraphrased), "We reserve the right to change anything at any time." And they do.

[Eddie Watkins]

And they really prey on young people who are the most vulnerable. As soon as a person turns 18 or starts college/graduates high school they start receiving credit card offers constantly, all pre-approved. Of course, the interest rates are off the charts.

Eddie

[Mark Pruitt]

Yup, I have a particular card that had a program where you get points for the money you spend with it, and the points translate into discounts. The catch is, participation costs something like $30-40 a year. So I opted out. You guessed it--about a year later they re-enrolled me without my consent and billed me the fee. I called and complained, they dropped the fee and un-enrolled me. The next year, you guessed it--they re-enrolled me again. It so happened that that year I was going to be purchasing some big appliances so I stayed in and probably netted about a hundred dollars. I have now called them to once again "un-enroll" myself. If, no, when, they pull this stunt again I'm kissing them good-bye. I would just go ahead and do so now, but hearing what was said near the end of the NPR clip it seems that it is better to keep the card and just not use it than to cancel it.

[Ken Garlock]

Life is not fair.

If you can't afford it, don't buy it.

The consumer is responsible for what he does, not the CC company or the government.

Sympathy is in the dictionary.

[Keith Starosta]

Life is not fair.

If you can't afford it, don't buy it.

The consumer is responsible for what he does, not the CC company or the government.

Sympathy is in the dictionary.

LOL!! Guess that 'bout sums it up.

[Dan Forman]

Life is not fair.

If you can't afford it, don't buy it.

The consumer is responsible for what he does, not the CC company or the government.

Sympathy is in the dictionary.

Ken and Keith---Just curious, did you actually listen to the interview, or is this just a global judgement? Your first two statements are correct, won't argue with that. But are you that comfortable with letting the industry intentionally burden you with bogus charges because they know that only a certain number of people will catch them, or will have the tenacity to work for months to have the charges removed because the industry purposely ignores the attempts of the cardholder to correct the situation?

Is it not the responsability of the industry to be fair and honest, and the job of government to insure that they are?

Dan

[Mark Pruitt]

Sympathy is in the dictionary.
So is greed. And malice. And dishonesty. And a host of other behaviors that may not be innately criminal but nonetheless indicate pond scum.

I agree that people are responsible for their actions; and that it is utterly stupid for a young couple, for example, to use credit to build up a huge debt for the sake of acquiring things they could live without. But the difference between an honest, upright businessman and a greedy shark is that the former will deal forthrightly with his clientle and not dilerabately lure them into a situation that he knows will be harmful.

Some day the pendulum's gonna swing, and when it does....

[Ken Garlock]

I listened to about 5 minutes of the interview. Just past where the good professor talked about the discounting of the payment to the vendor. I pay one dollar, the vendor get 98 cents(?).... That has been true has long as CC have existed.

I don't know about you, but my CC statement shows exactly what the interest rate if for both purchases and cash advances. Neither one impact me since I don't borrow from the CC company, or carry a month to month balance.

The simple fact is if you can't afford to buy it, don't buy it. It seems that many people can't understand that. I have little to no sympathy for them.

I have had two disputed charges on my CC, one for $4800, and another for under $300. Both were resolved in a reasonable period of time, less than 30 days.

Should the CC companies be taken to task? Only that the maximum APR should be set at some number like 3 times the 'prime rate.' Otherwise, they are in business to make money for their stock holders, while at the same time operate within the existing laws. If people did not use the CC companies, they would dry up. It is to the advantage of the CC company to operate within a window of what the consumer will tolerate.

Finally, if you want to complain about something, ask Bank of America why they started issuing credit cards to Illegal Aliens, who by their status are criminals. Maybe BoA is part of the mob?

If I were worrying about something, I would much rather worry about the nearly untraceable identity theft that is going on. Reference last nights Dateline program.

[Jim Becker]

Ken, et al...I also have to suggest that the point of the piece was well beyond the common sense of not buying what you cannot afford. It's about the apparently legal abuse that the credit card companies are doing when folks do make poor choices. Most of those folks want to pay and do pay, but the continually changing rules keeps whacking them back to where it's nearly impossible to pay off the debt.

For the record, I sincerely agree that credit cards should be used for convenience to purchase things one actually can afford or at least when there is pre-planning for a short term pay-off or an emergency, such as the health care costs that so many folks are stuck paying out of pocket. I don't feel overly bad for people who routinely abuse their credit; but I do feel for those who make clear effort to put things right and are unwittingly taken advantage of way beyond what they originally signed up for...or thought they signed up for based on what was in place at the time. Again, the key is that little "feature" so common in the fine print..."We reserve the right to make any change to these terms at any time we want to for anybody." That's a heck of a contract provision...

[Greg Cole]

Notice the mailing address for most CC Companies is SD or DE.... the 2 states with basically wide open doors for the above mentioned manipulations.
As the family saying goes back in little old Vermont where I am from..."If you can't pay cash for it, ya don't need it bad enough". Works for me, except for a vehicle & home... own 2 cc's & can't even remember the last time one was used except for a hotel & air reservations.

[Mark Engel]

The credit card companies now also routinely have text in their cardmember agreements that states that, if you have a dispute which cannot be resolved, the cardmember must agree to binding arbitration. They also state that the cardmember is not allowed to sue the credit card company or join in on any class action law suit against the credit card company.

How's that for covering your rear end.

[Dennis Peacock]

Good thread and for many good reasons. I, all to well, understand how long it can take to pay off a credit card. The LOML and I "just had to have a few things" after only being married 4 years. We just paid that credit card off in December of 2006....19 years after the purchases!!!!!!

There is a lot of money to be made in lending others money...thus the credit card companies step in and fill that desire. Notice that I didn't say "need".??!

The consumer is so powerfully driven to have "things" that they will resort to being a slave to the lender just so they can have it "now". Been there and wore out 19 years worth of T-Shirts just to pay for my "gotta have it now" persuasion back in 1987. :o :mad:

It's really tough to get out of debt. We have to stop spending on things and start paying down the bills we owe in order to make that happen. Many people just don't have what it takes to stop the spending and stick with the paying off the bills. I mean....on the other foot, life happens and sometimes an emergency takes place and we whip out the CC once again and start the vicious cycle all over again. Out plans to fix that? Build up and "emergency fund" to handle just such things as life's little emergencies. Yes, it's going to take time, discipline, and dedication to stick with the plan....but If I don't plan where I want my money to go? It will go where it wants to go and not where I need it to go. :D

[Mark Engel]

Let's all hope that the tactics used by the CC companies don't spread to other lenders.

How would it be if Ford Motor Credit or GMAC started to do the same things to their customers.

I know, if you can't afford to buy a car, you can just walk! :rolleyes:

[Rob Russell]

Dennis,

Now - go back and look at what you bought 19 years ago and figure out what it really cost you.

I heard the story on NPR also. They gave an example of a young couple like Dennis. They said assume the couple buys $5000 of baby stuff - crib, car seat, etc. and charges it on a credit card. The couple pays the minimum every month. The baby would have graduated from college, married and had kids of his/her own before the parents were through paying off that original $5K purchase.

One of the interesting clauses they discussed was the "universal default" clause. That clause says that, if you default on ANY payment to ANY creditor, the CC company can raise your interest rate to the "default" rate on their account even if you have never been late with them and have paid all minimum balances.

[Mark Engel]

They can (and do) also review your FICO score and if it goes down below some magic number they can (and will) raise your interest rate.

I check my FICO score regularly and it can fluctuate by as much as 15-20 points in one month, based soley on the time of the month at which they decide to check my balances, etc. If they happen to check it a day or 2 before a payment gets posted, that will lower the FICO score.

[Dennis Peacock]

I know, if you can't afford to buy a car, you can just walk! :rolleyes:

ROFL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I would say that you "could" just ride a horse...but then, you'd have to have the money for the horse, feed, shoeing, barn, hay, saddle, bridle, vet bill, and the list grows from there.

Of course you could just walk....but then you'd have to buy socks, shoes, and something to keep your feet healthy. :rolleyes: :D

[Mark Engel]

Yup.

And look at my location. I would need lots and lots of layers of pants, shirts, socks, etc., etc., etc.

I like my remote starter and heated seats, thank you. Put that purchase on my credit card. SHould have it paid off any month now! :D

[Ken Garlock]

Before we get into a battle of philosophy, people just need to read the article if they choose. There are people here that have strong opinions on this issue, and perhaps it is time to back off and just say that things could be better.

Basically I support free enterprise with a minimum of government interference, and there are those of you that lean toward close government oversight. That is OK with me, and I defend you right to hold that opinion. Neither of us is right all the time. Just remember, however flawed you might regard things to be we still live in the best country ever established in recorded history. So when you get up in the morning and go to the job of your choice, be happy that you can go to that job, or choose to take a different one.

This is still a darn good place to live.:)

[Mark Pruitt]

Basically I support free enterprise with a minimum of government interference...
Ken, I agree wholeheartedly with you on that. But such a system only serves the good of the public when businesses operate by a set of ethics that disallow the kind of behavior that CC companies are documented as exhibiting in the NPR story. A generation or two ago, such behavior was not even considered by law abiding citizens. Today it's every man for himself and screw anyone who suffers on account of someone else's desire to get rich. I honestly think that such behavior is going to drive this society to a boiling point someday.

BTW, Ken, the guest on NPR said something toward the end of the story that was almost identical to your statement I've quoted above, FWIW.

[Jim Becker]

Mark, I equate this to what I call the "Wall Street" mentality that is pervasive in business today. It's all about bigger and bigger profits per share almost no matter how you get there. I think your mention of ethics is spot-on. It used to be that only the folks who "enjoyed" being in default got hit hard...now we are all at risk even with squeaky-clean credit reports and high credit scores. It only takes one simple momentary lapse/mistake to really cause problems...even a mis-directed payment by one's bank.

[Dan Forman]

The whole point in posting this was to point out just how far out of control the industry has gotten. The majority of those who listened to the entire interview will most likely agree. Those who only listened for a few minutes won't know the entire picture.

Perhaps it comes down to whether one is more concerned about being protected from big government, or from big business. I fall into the latter camp. There are many things that are more important than the almighty dollar.

There is a lot of moralizing going on here about how one should live within their means, a notion with which I fully agree. However, shouldn't the industry be held to the same moral standards? Should we condone that which may be legal but is also ethically reprehensible? Maybe it wouldn't be necessary for govenment to step in if big business operated with a modicum of morality.

Dan

[Jeff Kerr]

What a great thread! I know that anytime finances, religion, or politics come up in discussion there will differing opinions. That's cool. We are have our own value systems and beliefs.

That being said, the Lobbying for financial and CC institutions is working very hard to persuade state and federal legislators to set the laws in their favor. It is part of their business model. Not saying it is good or bad. It just is. If you think that you can beat them at their game, you are mistaken. That is like saying you can go to Las Vegas and always beat the house. Look at the money they both have, the rules are in their favor.

Jim made a great point about folks who fall into the trap of these firms. There are abusers of the system and there are those who are trying and get caught in the trap. Then when things go against them just like this where do they turn? They go out and go to a payday cash advance store. Do the math and you will see that the working poor or struggling are paying effective interest rates that are so steep that there is no way out.

I switched 2 years ago for my own reasons to a debt free life. I haven't borrowed one dime nor have I used a CC since. (I don't even have a CC). I am still paying off the previous debt to this day, but I have a plan and I will be debt free this year.

Don't think for a minute that you have to have a great credit score to get thru life. It is a marketing ploy. If you pay cash for everything you don't need a credit score. Now before I fire up the debate again, you can get a home mortgage without a credit score. What you need is a good mortgage banker that is willing to do the old fashion loan qualification. They still exist.

For me, I paid cash for my car. Yea it is old, but it is paid for. My home loan will be the only thing that I will carry a loan for.

It is amazing what you can do with your financial life when you do not play their game. I didn't create this plan on my own. It came from a guy that is smarter than me. He wrote a few books. I don't want to violate any rules of SMC so I won't endorse him here. If you want to know more about what I did, send me a PM. I'll tell you his name and such. (I don't make anything from this. I am living proof that the best way to win is not to play.)

Many of you are like me and we are in a income situation that doesn't grow faster than inflation. According to the Consumer Price Index, Over the last 75 years inflation has averaged 4.2%. Unless you are getting raises greater than that, you make less money every year. Piling on debt makes it worse. Having the ability to save and pay cash keeps you out of trouble.

For example, right now I am not to happy with my career. Thanks to the lifestyle I live now, I am giving thought to leaving this career and taking a pay cut for my sanity/peace of mind. That is a awesome feeling. 2 Years ago, there is no way I could have done that. :)

[Gary Keedwell]

Jeff, I know what you mean. 2 1/2 years ago we sold our house (just in time) and we "downsized" and paid cash for a new place from the profits. For the first time in over 20 years we have no mortgage or CC dept. I left my job of 15 1/2 years and now I do "contract" work. My wife is also self employed.
We still have our normal bills, but I cannot begin to tell you what it is like to be dept free. It's like we dropped out or something. I am not under the constant stress and I smile more often. We can save alot of money, but if we really want something we PAY for it. You would be surprised at how much thought goes into purchases when you have to pay cash and not whip out the plastic!!!

Oh, I still use the plastic for convenience, but it is paid in full at the end of the month, without fail!!! I am in my fifties and I no longer worry about my golden years like I used to. People who haven't seen me in awhile can't get over how good I look so I guess my new "life-style" agrees with me.
Sorry I'm rambling...just wanted to share.......
Gary K.:)

[Dennis Peacock]

Gary,

Thanks for the encouragement..!!!!! I appreciate that greatly and that's the ray of hope I've been looking for. Now....scuuz me while I saddle up and buckle down to money matters. ;)


Jeff, I know what you mean. 2 1/2 years ago we sold our house (just in time) and we "downsized" and paid cash for a new place from the profits. For the first time in over 20 years we have no mortgage or CC dept. I left my job of 15 1/2 years and now I do "contract" work. My wife is also self employed.
We still have our normal bills, but I cannot begin to tell you what it is like to be dept free. It's like we dropped out or something. I am not under the constant stress and I smile more often. We can save alot of money, but if we really want something we PAY for it. You would be surprised at how much thought goes into purchases when you have to pay cash and not whip out the plastic!!!

Oh, I still use the plastic for convenience, but it is paid in full at the end of the month, without fail!!! I am in my fifties and I no longer worry about my golden years like I used to. People who haven't seen me in awhile can't get over how good I look so I guess my new "life-style" agrees with me.
Sorry I'm rambling...just wanted to share.......
Gary K.:)

[Rich Engelhardt]

Hello,
I listened to about 10 min of the link.
Not much - if anything - I wasn't already aware of.

My wife - when she's not "murdering" one of my tools ;) - can best be described as a *Credit Card Super Predator*. Trust me here, the female of the species is indeed the most deadly..:D

She literally preys on CC issuers.
I'm told on a weekly basis, what card I sould use, and almost on a daily basis, how much I'm "allowed" to put on it, and on a constant basis = what card I should use for each type of purchase.
(eg. Gas = Murphy on the WalMart card for the $.03 discount, but only if I'm not able to make it to Get-Go which = Discover (for the 2%) & the Giant Eagle discount recpt.)

This is no lie. I have seen her *attack* a CC company on the phone for over an hour over a dispute of only a dollar or two.
Honestly, as much as she complains about it,,, I think she really enjoys it,,
Me?
When she goes on the warpath, I run and hide :D

[Belinda Barfield]

However, shouldn't the industry be held to the same moral standards? Should we condone that which may be legal but is also ethically reprehensible? Maybe it wouldn't be necessary for govenment to step in if big business operated with a modicum of morality.

Dan

Dan,
I have been following this thread with great interest. IMVHO, one either has morals, or one doesn't. As Plato said, "Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws."

It is by choice (and sometimes necessity as pointed out by others) that we take on debt. It is by choice we abide by credit card company policies. The only thing that will change CC company practices is non profitability of said practices.

[Mark Pruitt]

If I may throw one more comment into this, only somewhat related to the OP but still relevant:

Mention was made in the NPR interview of an increase in CC solicitations by mail. One way I deal with this at times is to take the postage paid envelope, seal it with nothing but blank paper in it, and mail it back. I need to start doing that more consistently, and I wonder what would happen if everyone did it.;)

[Ken Garlock]

As one of the '5 minute listeners,' I went back and listened to the program and found it to be an indictment of the CC industry. A nice quiet discussion of a particular persons point of view prefaced with the statement that 'she is a Harvard Professor', and therefore knows everything. A PBS/NPR liberal prospective that I pay for via income tax. I am waiting for the other side of the story from Citi Bank or Chase Bank. I feel safe in saying that you will never hear it on NPR.

My goodness, 90 billion profit, not likely. Now 90 billion in accounts receivable, could be. The accounts receivable as the name implies, is what is owed to the company by the CC user. In addition, professor didn't note that the CC company has already paid the vendor.

One point I will agree with is that the near 30% interest rate is absurd, and punitive.

The professor would have Darwin repealed, and Barnum made politically incorrect .

[Jeff Craven]

If I may throw one more comment into this, only somewhat related to the OP but still relevant:

Mention was made in the NPR interview of an increase in CC solicitations by mail. One way I deal with this at times is to take the postage paid envelope, seal it with nothing but blank paper in it, and mail it back. I need to start doing that more consistently, and I wonder what would happen if everyone did it.;)Or you could just opt out. Every CC solicitation had the Opt Out phone number on the back. I haven't received any of that junk mail since I opted out last year.

[Jim Becker]

The best way to opt out of the glut of CC solicitations is to do so via the credit reporting system...then, you'll only get them from folks you already have a business relationship with unless their privacy policy ALLOWs you to opt out of receiving them. (Not all do)

[Dan Forman]

A PBS/NPR liberal prospective that I pay for via income tax. I am waiting for the other side of the story from Citi Bank or Chase Bank. I feel safe in saying that you will never hear it on NPR.


The reason you won't hear the industry speaking up on this, on NPR or anywhere else, is that they don't WANT you to know about their practices. Recall the hypothetical couple that ran up a $5000 charge on their card in order to outfit the nursery. To pay that off at the minimum payment would take over 30 years.

There was a proposal to require CC companies to have a line on the bill which would inform the average user how long it would take to pay off their bill at the minimum monthly payment. Seems like a good idea, a person could themn make an informed decision on how rapidly he wanted to pay off the debt. Industry lobbiests had that struck down. They don't want people to know that information, just like the tobacco industry didn't want people to know how dangerous their product is.

I'm sure Enron was just about to go on the national media and explain to the American people just how they ran their company before the story broke.

I have a credit card, and use it responsibly, pay it off in full each month. To their credit, so far my current card company has not pulled any shenanigans on me that I am aware of. But there are certainly outfits out there that do. Just because I haven't been bitten, doesn't mean that I should turn a blind eye to the abuses that others are being subjected to.

In the legal system, if an officer encourages someone to commit a crime, that's called entrapment, and if the defendant can prove that happened, the case will be thrown out of court. What we have here, is an industry that is consciously going after the most vulnerable people, and encouraging them to spend more than they can pay back....the hook is baited. Then, the due dates are manipulated, mail misdirected, generating late a fee, which as a result ratchets up the interest to 30%. Hook set! This results in more late fees...credit rating plummets. So the person is looking around for another job, but since emplyers are now looking at credit ratings before they hire, our "fish" can't find another or better paying job because his cretid rating has slipped. The credit card company is raking in a nice profit, and the fish is out of luck.

Looks a lot like entrapment to me. Granted the victim should have been wiser, but that doesn't justify the practice.

I carried a pretty high cc balance for a few years after using a card to finance a home business venture that never got off the ground. During that time, I got MANY offers from various card companies. I eventually got that paid off, and for the last few years have not carried a balance at all. Kind of funny that now that I am solvent again, I hardly get any offers in the mail. Guess I'm not vulnerable enough to make a good fish.

Dan

[Dan Forman]

I went back and listened to the program and found it to be an indictment of the CC industry. A nice quiet discussion of a particular persons point of view prefaced with the statement that 'she is a Harvard Professor', and therefore knows everything.

Well, don't we want a certain amount of credibility from a speaker? Who better than a professor of law from probably the most prestigious law school in the country? Since you have brought up the notion of bias, I am left wondering if you would have been more receptive had the messenger been Rush Limbaugh?

You are correct that it is basically an indictment, but not of the industry itself, just the preditory practices that are becomming incresingly prevalent.
It is the excesses that are being exposed in her discussion.

There is certainly a place in a civil society for a credit card industry with well banlanced business practices. I am very glad to have a credit card, it makes my life easier, I can do business over the phone and internet. I assume that businesses will pass on the cost of using the card to me, and that is fine. If I would choose to pay the card off over time (never again) rather than all at once, I would be fine paying the interest rate that I had agreed to when I accepted the card. The Professor took the same view.

What is not fine, are all of the other things that she is exposing, the dirty underbelly so to speak. Is there anything wrong with cleaning that up, making it presentable again?

Dan

[Ken Garlock]

Rush, heck NO. I think he is at best a buffoon.

If NPR has indeed asked for the CC industry position, which I seriously doubt, and if they were then refused, where is the NPR reporting of the refusal? My point is that you will not get both sides of the story on NPR.

The real disaster is that the news media, both print and TV, are reporting only those things that fit their agenda. The New York Times should change their motto from 'all the news that is fit to print' to 'all the lies and half truths we can fit in one edition.'

[Mark Engel]

Rush, heck NO. I think he is at best a buffoon.

If NPR has indeed asked for the CC industry position, which I seriously doubt, and if they were then refused, where is the NPR reporting of the refusal? My point is that you will not get both sides of the story on NPR.

The real disaster is that the news media, both print and TV, are reporting only those things that fit their agenda. The New York Times should change their motto from 'all the news that is fit to print' to 'all the lies and half truths we can fit in one edition.'

While I agree with (almost) everything you say in this post, I don't see how it really has anything to do with the current topic. There is ample evidence of the predatory practices being employed by the credit card companies. Having NPR or anyone else report on 'the other side of the story' will not change the facts. The credit card companies are targeting those that should not have a credit card and their cardmember agreements are designed to punish anyone that ever violates 'the rules'.

I have recent personal experience dealing with these issues.

[Gary Keedwell]

I don't blame the CC companies for anything. I blame the teacher's union at our government schools and their agenda. They should be teaching kids how to handle money and have them prepared for the real world.
Now, after you stop shaking your head and writing me off as some right-wing whacko, just think what the government schools are really "teaching" our kids. Do you really think they need instruction on how to put a condom on a banana? Yes, I know that is one of their extreme clases, but there are so many things that they could be instilling into their young minds.
They could be teaching them about individual responsibility. They could also tell them that there are times when you win and times when you lose instead of making them "feel good about themselves" which will lead to a certain pratfall. Also, I might add, that they can tell them to look in the mirror sometimes when something goes wrong instead of always blamming "the other guy".
They could also get back to teaching them about our Constitution and our government. Also there is history that is important to understand how and why we have what we have and why most people take it for granted.
They could also teach the kids about compound interest and how that could make them rich and how lottories will make them losers.
Anybody who borrows alot of money and only pays the minimum payment, has only himself to blame.
Gary K.

[Mark Engel]

I don't blame the CC companies for anything. I blame the teacher's union at our government schools and their agenda. They should be teaching kids how to handle money and have them prepared for the real world.
Now, after you stop shaking your head and writing me off as some right-wing whacko, just think what the government schools are really "teaching" our kids. Do you really think they need instruction on how to put a condom on a banana? Yes, I know that is one of their extreme clases, but there are so many things that they could be instilling into their young minds.
They could be teaching them about individual responsibility. They could also tell them that there are times when you win and times when you lose instead of making them "feel good about themselves" which will lead to a certain pratfall. Also, I might add, that they can tell them to look in the mirror sometimes when something goes wrong instead of always blamming "the other guy".
They could also get back to teaching them about our Constitution and our government. Also there is history that is important to understand how and why we have what we have and why most people take it for granted.
They could also teach the kids about compound interest and how that could make them rich and how lottories will make them losers.
Anybody who borrows alot of money and only pays the minimum payment, has only himself to blame.
Gary K.

None of which has anything to do with the credit card companies and their predatory business practices.

[Gary Keedwell]

All I'm saying is there are alot of things out there that can hurt us: Buyer Beware still is the best defense against companies like CC.:rolleyes:

[Mark Engel]

Unfortunately, buyer beware doesn't work with the credit card companies. They use bait and switch. Bait and switch trumps buyer beware almost every time.

The next time you get a credit card offer for one of those really great rates, or 3% cash back, or airline miles, or whatever, read through the offer. One thing that every one of them says is (I'm paraphrasing), "Just because we are making this offer to you does not mean that is the offer you will receive. We will determine what it is you deserve from us and we then reserve the right to change that any time we want for any reason we want. Please sign here".

That is a legal form of bait and switch because they told us up front that there is a tiny chance in hell that we will get what they offered to us.

[John Schreiber]

I don't blame the CC companies for anything. I blame the teacher's union at our government schools and their agenda. . . .
With respect, I have to ask how much time have you spent in "our government schools" recently. There are many problems there, but if you had spent time in the schools, you would know that your description has nothing to do with reality.

On the other hand, I see advertising for credit cards and other consumer products everyday which give the most corrosive message about our society imaginable. Teachers unions aren't paying those ads, big corporations are paying.

By the way, I plan to pick up my credit card agreement tonight and read it. If I can understand it I'll let you know.

[John Schreiber]

If NPR has indeed asked for the CC industry position, which I seriously doubt, and if they were then refused, where is the NPR reporting of the refusal?
This was not an NPR News program, this was an interview on a show called Fresh Air.

I just listened to the show. Did the person being interviewed say anything false?

What I see are corporate employees who are probably ethical as individuals being warped by a system which rewards only profit into becoming what used to be called usurers or loan sharks.

I apologize if my understanding of morality comes off as a political statement and while I do not want to offend anyone, on occasion I do feel the need to respond to what others say.


Sincerely,

[Dan Forman]

Rush, heck NO. I think he is at best a buffoon.

If NPR has indeed asked for the CC industry position, which I seriously doubt, and if they were then refused, where is the NPR reporting of the refusal? My point is that you will not get both sides of the story on NPR.

The real disaster is that the news media, both print and TV, are reporting only those things that fit their agenda. The New York Times should change their motto from 'all the news that is fit to print' to 'all the lies and half truths we can fit in one edition.'

Ken--- Hallelujah, at least we agree on Rush!!! :D

As to NPR, I often listen to NPR's "All Things Considered", their afternoon new show, and many times they have have representatives from both sides of an issue, particularly political ones. In fact, that is the norm. There are also many times when reporting on questionable practices of a company, I have heard them say that they had contacted the company involved, but that company had declined to comment. The show this interview was aired on "Fresh Air with Terry Gross" is more of a general interest program than news specifically. She was interviewing the professor as an author, not as a news reporter, so I imagine there is a different standard of "fairness" there.

As a regular NPR listener and member, I don't get the whole bias argument. As I said earlier, in political stories, they nearly always have a representative from each side of the aisle. Both sides are treated respectfully, both are asked tough questions, and the listener is left to make up his or her own mind. It's certainly more evenhanded than the FOX network, or Rush and the radio posse.

Maybe the problem isn't so much that the media only reports what they want to based on their agenda, but that the consumer only accepts those things which conforms to his own beliefs, and rejects all else. As Anias Ninn states in her diary, "We don't see things as they are, we see things as WE are." Pretty much human nature when it comes right down to it.

Dan

[Dennis Peacock]

Ladies and Gentlemen,

While this is a most excellent thread, there are some waivering off into various topics. Let's not go there and let's keep this thread on topic.

I only have one thing to add to all the previous discussions....teaching children about money is the responsiblity of the parents that gave life to those children and accepted the responsibility to raise those children.

Now....CC companies do what they do and the American public likes to use the funding via CC to make purchases. I agree with what was said earlier: If you make a purchase with a CC and you only pay the montly minimum??? Shame on you. :)

Off soapbox now. :rolleyes:

[Gary Keedwell]

Ladies and Gentlemen,

While this is a most excellent thread, there are some waivering off into various topics. Let's not go there and let's keep this thread on topic.

I only have one thing to add to all the previous discussions....teaching children about money is the responsiblity of the parents that gave life to those children and accepted the responsibility to raise those children.

Now....CC companies do what they do and the American public likes to use the funding via CC to make purchases. I agree with what was said earlier: If you make a purchase with a CC and you only pay the montly minimum??? Shame on you. :)

Off soapbox now. :rolleyes:
I beg to differ Dennis.....In the early sixties i took a 6 month business course in my 2nd year in High School. I learned to balance a checkbook, type, the stock market, saving etc. With all those hours those kids sit in those government schools, you telling me that they can't dedicate a few of them to teach the students about practical things that will help them in adulthood?
And to answer someone's incendiary comment about the radio and a certain tv station; I am just glad that there is something out there to counter the liberal bias that calls itself news.
And no, I haven't spent any time in government schools lately. But I know alot of parents, teachers included, who have pulled their children out of said schools and installed them in private or parochial schools.
Now don't get me wrong, there are alot of communities, mostly affluent who have fine schools, comparatively speaking. But any institution that doesn't have competition, will suffer. And you know who is against school vouchers, right.
Gary K.

[John Schreiber]

By the way, I plan to pick up my credit card agreement tonight and read it. If I can understand it I'll let you know. This is scary, I can't find my cardmember agreements. All I can find is small print which says that whatever the company says in advertising or other publications does not matter, only the cardmember agreement matters. The cardmember agreements are not available on-line anyplace I can find them either, and I looked quite thouroughly.

If you apply for a card, you can't see the cardmemeber agreement until after you have been accepted. They send you the agreement with the card. If you don't like the agreement, you can return the card.

I was going to quote some of the scary language which are part of the terms of use for the website, but it said that I may not reproduce the information in the agreement except for personal use or I would be in violation of said agreement.

Tomorrow I'll see if the company will send me a current copy of my cardmember agreement.

[Dan Forman]

#1. I don't blame the CC companies for anything.

#2. Do you really think they (children in public schools) need instruction on how to put a condom on a banana?

#3. They could be teaching them about individual responsibility.

#4. They could also tell them that there are times when you win and times when you lose instead of making them "feel good about themselves"

#5. Also there is history that is important to understand how and why we have what we have and why most people take it for granted.


Gary--- Believe it or not, there are some things upon which I agree with you. But first of all, I hope you are not suggesting in item #2 that they substitute the real thing for the banana! :eek:

Can you explain how, if you listened to the entire interview I linked to, you can reconcile statement #1 with statement #3? If a sense of personal responsibility is important, and I agree that it is, isn't it also important for the citizenry to also hold the business community to the same standard? Shouldn't everyone have to play by the same rules? The blanket statement that you don't hold the cc companies responsible for "anything", when they are clearly picking the pockets of honest, hard working citizens is like blaming the homeowner who forgot to lock his door and gets robbed, and giving the burglar a get out of jail free card. Things are not that black and white. Responsiblity is required by both sides.

On #4 I agree, to a degree, but again, doesn't have to be an "either/or situation". Nothing wrong with trying to instill a REALISTIC sense of self esteem in children, most need it in fact, but that doesn't mean they should be sheltered from the consequences of unskillful actions, losses, or failures. Character is built from sucessfully negotiating such things, but without a basic sense of self esteem, that's difficult to do. I work in the mental health field, and I can say with certainty there are at least as many children (and adults) out there who have been damaged by parents who beat (either literally or figuratively) the self esteem right out of them as there are who are suffering from the results of being raised by overly permissive parents.

#5 History, yes indeed! Very important. The history books are full of instances of industry taking advantage of it's workers: hiring thugs to murder and beat strikers back in the days when unions were first getting organized, sending coal miners to their deaths because it was too inconvenient and costly to the owners to maintain adequate safety standards. Not to mention child labor practices which still might be in place today had not the gevenment stepped in and made it illegal. The fact is, that government wouldn't NEED to step in if industry didn't behave is such a way that it becomes necessary.

History is still being written. Miners are still dying in unsafe mines, the good citizens of this country are still being exposed to unnecessary toxic waste and other unhealthy conditions in order that some companies can gain greater wealth for themselves and their shareholders. Any changes leading to the betterment of conditions for the worker or society at large, have been fought by industry tooth and nail. I doubt that will change anytime in the foreseeable future. The rights of the individual vs those of business are in a dynamic balance, will probably always have to endure an uneasy equilibrium. But without a watchful eye, they tend to move in the favor of big business.

It is pretty clear that the cc industry is no different. They will do whatever they want until something stops them. Professor Warren is trying to educate the public to exactly how bad things have gotten. Hopefull enough people will listen, and action will be taken. Isn't that how we do things in America?

History postscript: In the past it has fallen to government to restrain the forces of greed and avarice when the market is unable to. The problem we face today is that this administration is so enmeshed with big business that they are allowed to write their own legislation. With the pendulum swinging now, perhaps some ofthese things can be corrected. (Mods---this was part of the original interview, so presuming it's fair game).

The soapbox is now vacant.

Dan

[Dennis Peacock]

OK guys....It's all a debate now and not a discussion about the CC industry. It's time to let this one sleep. ok?

Gary, I know you learned some good stuff in school...so did I. But the very basics of money and finance should be a parental thing. This way there are real life situations with real life problems and solutions.

[Gary Keedwell]

OK guys....It's all a debate now and not a discussion about the CC industry. It's time to let this one sleep. ok?

Gary, I know you learned some good stuff in school...so did I. But the very basics of money and finance should be a parental thing. This way there are real life situations with real life problems and solutions.
That's your opinion and I respect that, but I do not agree.
Gary K.

[Greg Funk]

While I agree with (almost) everything you say in this post, I don't see how it really has anything to do with the current topic. There is ample evidence of the predatory practices being employed by the credit card companies. Having NPR or anyone else report on 'the other side of the story' will not change the facts. The credit card companies are targeting those that should not have a credit card and their cardmember agreements are designed to punish anyone that ever violates 'the rules'.

I have recent personal experience dealing with these issues.

NPR presented one side of the issue and claimed that the credit card companies were making excessive profits. Charging 18-30% will generate very high margins if you are lending to low risk clients. However, most people carrying a high credit card balance are, by definition, high risk customers with a higher than average default rate. So when someone with $50,000 in CC debt declares bankruptcy that $50,000 has to be paid back by the other clients. Without knowing the default rate I don't see how anyone can assert that their profits are excessive or unreasonable.

I've been using credit cards for over 30 yrs and wouldn't want to live without them. My card gets paid automatically from my bank account so I don't have to worry about forgetting to pay on time.

Greg

[Mark Engel]

I am going to take Dennis' advice and leave this subject alone.

[Dennis Peacock]

Yup me too.

Gary..I respect your opinion and will bow out. Peace to you my friend.

[Gary Keedwell]

Yup me too.

Gary..I respect your opinion and will bow out. Peace to you my friend.
You too, buddy. Have a great week-end.
Gary K.