Screw the Banks and Charge Card Companies: Let Them Go Under

Two charge card companies wrote to me. The interest rates on my charge cards are going up.

That is the thanks I get for borrowing money and paying it back, making on-time charge card payments, and supporting the bailout.

I got a letter from one company today that said, "we are changing your Card Agreement...(your APR) is 15.99%.

The old APR was 8.99%

Another company wrote, "We are making changes to our card products in response to the challenging environment and the increasing costs of doing business..."

They took me from 9.49% to 12.49%.

Challenging? I'll show you creeps challenging. While you are sending money to the US Chamber of Commerce to elect right-wing Senators and reactionary state Supreme Court Justices, honest Americans are losing their homes.

That is the thanks I get for paying my bills. That is the thanks I get for supporting the bailout for companies that awarded millions billions in bonuses to executives that cannot mange their way out of a paper bag.

They could make money on $40 charges for overdrawn checks, $4 on ATM withdrawals, and outrageous usurious interest charges but could not make a cent through honest work.

Ungrateful thugs.

To protect the innocent, let me disclose that neither of these companies is based in Wisconsin.

Comments

[Mgm]

We agree for once! Useless corporate leaders and bureaucracies are as bad as useless public leaders and bureaucracies.

[antpoppa]

Don't you worry 'bout a thing, baby. Ol' Uncle Larry Summers is back. Why, with his IMF connections and Ideological Third World Austerity measures and, of course, more punitive and financial sacrifice on your part, we should be able to support the Kelptocrate class structure in the manner it has grown accustomed to under President Bush the Silly.
Oh, and remember as we invest billions of dollars into financial landfill, "Money is Ownership."

[Rich Preston]

Your post is a great analogy for smaller government and lower taxes. Merely substitute increased taxes for increased interest rates; and substitute the government for credit card companies.

Thanks for making a great arguement for smaller government and lower taxes.

[Mike Basford]

Four words, Paul: Join a Credit Union.

[elliot]

I'm a big believer in free markets, but there is nothing "free" or fair about credit card companies.

Name me another business that can change the terms of your agreement whenever they feel like it?

I became completely credit-card-debt free about a year ago and it was one of the best days of my life.

[Irwin Fletcher]

Paul,
If you pay your bills every month then your interest rate is 0%. It doesn't matter what the interest rate is. Unfortunately, to many Americans lived beyond their means and spent money they didn't have and now we are all paying for it.

[anon]

I suppose the next post will be that goverment should issue charge cards...

[Paul]

Odds and ends: The borrower gets the use of the money in return for paying interest. The use of the money is certainly not worth over 9%; I doubt if it is worth that much.
For the taxes we pay we get snow removal, public schools, protection against infectuous disease. That is worth something.
I do not have balances on these cards; one of them even had a limit of $20,000. The point is that they would raise the interest rates. It is the principle of the thing.
We should get into a discussion about these paycheck places which charge as much as 300% interest.

[Katrina]

The credit card companies are out of control, I agree. I have a credit card that gives me back 1% on what I spend. That's great as long as I pay it off every month, and I do. Unfortunately, I know people who have been out of work, or have no cash reserves to handle emergencies. They get into trouble when they need to use credit cards to pay for necessities. It is an easy loan with interest that is not regulated. It is wrong to take advantage of people when they are most vulnerable.

Credit card companies must be regulated to control what they can charge in interest. Maybe someone else knows the history of high interest rates. I seem to remember that at one time, interest rates on credit cards were controled.

[antpoppa]

I remember reading, during my perusal of international news, that Britain is suing the credit card companies of that state for usury. Apparently giving the option of play fair or get out of the country. Anyone else remember seeing this?

[irwin Fletcher]

Katrina, No one NEEDS to use a credit card. People CHOOSE to and that is there choice. Unfortunately many Americans have no idea as to how to handle their personal finances and end up over their heads. So lets look at options. Start by cutting back, getting rid of cable\internet, cell phones is a start. Stop sucking down $5 Starbucks and eating out. If someone is out of work or has no emergency reserve they need to cut back to the bare minimum in order to build their own safety net. TAKE RESPONSIBILITY for their lives and dont depend on or expect a government handout and dont blame the banks for your own mistakes. It is to bad that that peolpe continue to blame others for their shortcomnings. Last time I checked you can say NO!

[Anon]

"We should get into a discussion about these paycheck places which charge as much as 300% interest."

Isn't that a good example of how stupid some people are? We all can make decisions that turn out to be stupid when we're dealing with uncertainity, but these people are doing stupid things knowing the certainity.

[Katrina]

Dear Irwin,
I too have led a lucky life in which I never had to borrow to get by. Others are not so lucky. People get sick, they lose their jobs, they make mistakes. Sure, you can argue that they could say NO but in some cases they think they are on solid ground when the s___t hits the fan. Things snowball in hurry. As for cutting back, there are so many people in this day and age who have given up those things you suggest. Some do end up over their heads in debt due to a desire to have it all now. Others are just plain unlucky. Even those who have saved hard all their lives end up in financial straights when they lose their pensions or spouses benefits.

I have been a landlord for a long time and I have seen a lot of tenants who are smart and on their way up lose everything when they are in accidents or lose their jobs. To bridge what they think will be a short gap they use credit cards to buy groceries and gas. The alternative is go hungry while looking for a job. You are probably a person who worked hard and made good and lucky choices. That's great but you have to be careful when you judge others by what your life has been like.

[Paul]

Katrina: thank you for your follow up comments. Irwin obvioulsy is not aware that there are many people, perhaps becausee of lack of education, perhaps because of unfamiliarty with what we refer to as 'fiancial literacy', perhaps becauase of simple bad luck who find themselves making horrible decisions.

Most of the people who are victims of 19% interest rates are not shopping at Starbucks, don't own a computer, use pay phones if they can find them and don't need a lecture on responsibility. What they need is job training and education, tranportation that does not take 3 buses to get to work, and some decent health care.

[neaguy]

antpoppa, you are right to highlight the role of Larry Summers, a man who would never be appointed to any position by an actual Democrat.

Paul, you can complain all you want, but your man Obama is in charge now and he has just handed over the levers of power to many of the criminals---for they did commit crimes--- who created the current capitalist crisis.

So much for change.

[Irwin Fletcher]

Paul and Katrina,
Before you judge me as a person who doesn't get it, let me share with you what I see everyday. I am a Certified Financial Planner whose job is to help people try to get their financial houses in order. I see everyday how people's expectations are and I have to explain to them what reality is. I will site two examples:
1) Young couple, 5 children. The purpose of our meeting was to discuss the fact that he had no life insurance and if something were to happen to him his family is screwed. Our meeting was interupted as he had to put on the Disney Channel in HD on his 46 inch Sony Bravia LCD tv for the kids. He told me he could not afford the premiums of $25 per month for a $1M term life policy. $25 per month!! I suggested scaling back on the $179 per month he spends on cable and he said that was a non starter.
2) Young couple, income $120K per year, Expenditures of $168K per year. $44K in credit card debt. Told them to scale back and sell their boat and third car. They did n't like that idea. BOAT AND THIRD CAR!

I am a firm believer that the social safety net is for those in need. I will help anyone who comes to my door and is truly in need. I volunteer my time to help people who are in serious financial trouble and there are many social programs available to help with education, shelter, clothing and so on. But I have no sympathy for a person who believes that life owes him/her cable, internet, cell phones and the NFL package as a baseline for life. That is what I see more and more. People who are to lazy to take responsibility for their fiancial lives, make the changes needed to get back on their feet and think that they are owed something. They are angry when I tell them to scale back to the bare walls until they are back on their feet and act like working someplace, anyplace as a stop gap is below their status.

I have made good choices in my life. I paid my way thru Marquette U and have sacrificed so my children can get a good education. I am not going to apologize for it. Anyone can do it, it takes a work ethic and that is truly missing today.

[Katrina]

Irwin,
Apologies, I did judge you. We are talking about different problems and different people. The clients you describe need to grow up, I agree. The people I describe just need a decent job and a second chance without the high interest rates that can be piled on when you can't pay your bills. The social safety net seems to help only families. Life can be a real challenge for single people.

[Lou]

If you pay off your credit card and use it sparingly, Citi Bank will take away your credit card. My 89-year-old father only has two credit cards. He's had his Sears card (now owned by Citi Bank) since 1961. Over the years, he's used it for appliances, TVs and such. The last purchase was about a year ago. He bought a TV and paid it off in three months. Last week, he received a letter from Citi Bank that they canceled his card because he didn't use it enough. That's what consumers get for using credit responsibly.

You are just blogging that to seem liberal, i think it matters to you that you come off as liberal now that you have made your millions.