Frontline on the credit card industry

[donheff]

Did any see the Frontline documentary on the CC industry? It was pretty horrifying. I put everything on CCs and pay them all off on time -- I have for 20 years. So I pay attention to frequent flyer miles and fees but never pay attention to interest rates. Most people do carry a balance so the interest rates are important. I was stunned at how much leeway the CC companies have to "change the deal" on you. A day late on a payment and you can pop from a low 6% to 25% in a heartbeat. Most shocking is that most CC agreements have a clause allowing them to raise your rate if you are late on someone else's debt or if your FICO score changes for any reason. Heck, move from an apartment that was too expensive for you to a house with a mortgage you can afford and suddenly find your CC payment going up.

It is easy for us to say "don't carry a balance" but a lot of low income people get seduced by easy terms and then get their financial blood sucked dry by these vampires.

[Anansi]

But the CC companies are still paragons of virtue compared to the cash advance companies. Now there are some people who are really abusing the poorest and least educated. I don't want to suggest anything radical, but I do think they should all be taken out and shot.

[MasterBlaster]

That Frontline documentary is at least a year old.

And yes, taking on CC debt. or most any debt is a dance with the devil.

[mickeyd]

I remember seeing this about a year ago also and I noticed that it was on again last night. I watched it again and once again reaffirmed my notion that using a CC and paying it off each month is still the only way to beat the CC system, but the majority of my fellow citizens refuse to take advantage of it and prefer to pay the banks huge interest fees.

[brewer12345]

Quote:

Originally Posted by mickeyd I remember seeing this about a year ago also and I noticed that it was on again last night. I watched it again and once again reaffirmed my notion that using a CC and paying it off each month is still the only way to beat the CC system, but the majority of my fellow citizens refuse to take advantage of it and prefer to pay the banks huge interest fees.

Nah, the other way to beat them is to be a stoozer. And maybe to buy their stocks at the pit of the next market crash.

[LOL!]

I've seen the Frontline. Things are not as bad as the documentary makes them out to be.

Most families do not carry a balance. Something like 25% of families do not even have a credit card. I am thinking those are predominantly low income folks.

http://www.federalreserve.gov/PUBS/o...4/bull0206.pdf

From page A31:
"Many families with credit cards do not carry balances. Of the 74.9 percent of families with credit cards in 2004, only 58.0 percent had a balance at the time of the interview; ... "

That means less than 44% of famlies carry a balance. Does that mean stoozers are the majority?

[maddythebeagle]

yeah that is old....my favorite part is the interview with the stooge that invented 0% balance transfer offers...my hero…

[jazz4cash]

The one bit I found interesting was the confirmation that CC companies intentionally use payment due dates on weekends and holidays to increase late payment fees and trigger default rates. I thought I had noticed a lot of due dates on saturdays and so forth, but was not sure if maybe I just never noticed before I started paying online.

[LEX]

I use cash...it drives store clerks crazy and raises eybrows. I especially enjoy the ritual each one has to veryfy if the Franklins are real. There is a built in frugality when you can only spend the cash in your wallet. Helps me stay on budget, and gives me a small source of amusement at the check out stand.

[audreyh1]

Quote:

Originally Posted by jazz4cash The one bit I found interesting was the confirmation that CC companies intentionally use payment due dates on weekends and holidays to increase late payment fees and trigger default rates. I thought I had noticed a lot of due dates on saturdays and so forth, but was not sure if maybe I just never noticed before I started paying online.

Yeah, I remember this.

I also remember the due dates being moved sooner and sooner - in kind of a random "surprising" pattern. It sure seemed like this was another attempt to cause an accidental late payment.

Pretty stinky that! I quit using the card that seemed to be playing these "shenanigans".

Audrey

[Hydroman]

The few times I had a late fee on my Wells Fargo CC, all I had to do was call them up and ask them to remove it and they did. They did not even try to debate it. Might have something to do with my having an account with them for over 10 years or just fear that I would cancel the card and sign up with their competition. But I did not even have to threaten to do that. I pay off the balance every month.

[JustCurious]

I have seen credit card companies periodically change the address for bill payments. Of course they know that many people use online bill payment systems, and most people would logically assume that the address for last month's payment would be the correct address for this month's payment, and when it is sent to the wrong place, it is not posted on time.....and voila.... you have a late fee and interest charges. Pretty slimy.

[jazz4cash]

Quote:

Originally Posted by Hydroman The few times I had a late fee on my Wells Fargo CC, all I had to do was call them up and ask them to remove it and they did. They did not even try to debate it. Might have something to do with my having an account with them for over 10 years or just fear that I would cancel the card and sign up with their competition. But I did not even have to threaten to do that. I pay off the balance every month.

I think its pretty routine for most CC companies to waive a late fee....I presume its because they know how outrageous the terms are. I've noticed sometimes the fine print states "must be received by 1pm" on the due date rather than close of business or whatever. Anyway Sears told me they would only waive fee ONCE, so if Wells did it several times, good for you. Point is sometimes all you have to do is ask, as you stated.

[LEX]

I watched the Frontline Episode. "Tony Soprano" has more ethics in his loansharking racket than the major banks and their credit card divisions.

[LOL!]

Quote:

Originally Posted by LEX I watched the Frontline Episode. "Tony Soprano" has more ethics in his loansharking racket than the major banks and their credit card divisions.

Yeah, but I can't buy stock in any of Tony's companies and get my piece of the wealth like I can with banks and CC companies.

[brewer12345]

Quote:

Originally Posted by LEX I use cash...it drives store clerks crazy and raises eybrows. I especially enjoy the ritual each one has to veryfy if the Franklins are real. There is a built in frugality when you can only spend the cash in your wallet. Helps me stay on budget, and gives me a small source of amusement at the check out stand.

Yes, but I can understand why retailers are willing to give MC/Visa 3% of the action. Today I was trying (oh Lord how I did try) to buy an I bond for my first godchild (baptism tomorrow). The bank I normally deal with was out of the forms, so I hit the branch in the grocery store when I did the weekly shopping. They don't sell the bonds at all (sigh), but while I was standing there, a local off-duty cop was helping the banker-schlub look at a 2 inch stack of very crisp 20s. They were almost certainly counterfeit, but you had to look very, very closely to see the discrepancies (although the sequential ordered serial numbers was a bit of a giveaway). The schlub didn't notice and took the 20s. Fortunately, he also got a copy of the perp's driver's license (with photo).

[FinanceDude]

Quote:

Originally Posted by brewer12345 Yes, but I can understand why retailers are willing to give MC/Visa 3% of the action. Today I was trying (oh Lord how I did try) to buy an I bond for my first godchild (baptism tomorrow). The bank I normally deal with was out of the forms, so I hit the branch in the grocery store when I did the weekly shopping. They don't sell the bonds at all (sigh), but while I was standing there, a local off-duty cop was helping the banker-schlub look at a 2 inch stack of very crisp 20s. They were almost certainly counterfeit, but you had to look very, very closely to see the discrepancies (although the sequential ordered serial numbers was a bit of a giveaway). The schlub didn't notice and took the 20s. Fortunately, he also got a copy of the perp's driver's license (with photo).

Maybe you need a new bank.......the bank can download the forms off a website they have access to.........