Obama has definitely walked into office with a lot of things on his plate, and consumer credit debt has to be one of the top priorities.As a society, Americans are pretty deep in credit card debt, and once you fall even one payment behind, you are asking for big trouble. While the current recession has led to banks bringing in fewer dollars, it has also been a golden chance for them to be abusive to loyal customers.
Miss one payment, and then on your next bill see that your interest rate just shot up a few points. The higher the rates, the longer you are going to be in debt for the exact same amount of money that you already owed. Obama is hoping to change that.
Another topic that is being discussed is the way payments are applied. In not all circumstances are payments set up so that they are applied to the highest interest balance. Of course, this once again results in debts having a longer life period. Obama is hoping to make sure this is changed as well.
Possibly as early as next week there is going to be legislation hitting the house floor on a new bill that hopes to deal with these and other potentially abusive practices. As more and more Americans start to feel the pain of the current recession, it becomes even more vital we don't let more people get buried by their credit cards.
Credit card companies should be helping their customers avoid getting in over their heads. The plan hopes to put limits on penalties and fees, and aims to give consumers the ability to demand limits lower than were initially offered to them.
It's a pretty nasty cycle. Once you fall behind a bit, you get put into fair or poor credit status, and once there, it gets harder and harder to get out of the hole.
Companies could help that if they wanted, but perhaps what they really want is for us to get behind? Doesn't that make them more money in the long run?
The only way to really answer that question is to look at how credit card companies have reacted to the current bill that is heading for the house next week. So far, it has been lobbying with Republican Senators against the bills passage.
Interesting. It really makes you wonder what the credit card companies ultimate goal is. Helping us, or making it harder and harder to break free of them?
It would be hard to argue that credit card companies are actually out to help us, but if you disagree, let us hear about it. Also, if you have a credit card company that you really love, feel free to share with others.
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Reader Comments (Page 1 of 1)
4-23-2009 @ 6:18PM
Sandy said...
Kudos President Obama!
It is about time we Americans get a break
from the bilking we have been getting.
Sandy from Missouri
4-23-2009 @ 7:35PM
Al Nelson said...
Finally a President with courage. The GOP only enabled them to steal more and then prevented people from using bankruptcy to get out from under them. Since the Supreme Court decision in 1976 that allowed the state to choose it's own usary law this has been one lie after another and one scam after another foisted on the lowest classes in the public sector
4-23-2009 @ 10:26PM
Bob said...
The truly sad thing about the credit card companies and their tactics is this. You can be a completely loyal customer for literally dozens of years. Whether it be from financial stress, or purely by accident, if you miss a payment - there is no doubt your credit card company is going to zap you very hard with a high late fee penalty, and most are just looking for any reason to increase your interest rates.
What makes it much worse though, is that as soon as your late payment is reported to the credit bureau's, this lowers your credit scores. Then your other creditors see the change in your credit scores and they automatically increase their interest rates too because you have suddenly become a higher risk customer.
Hence, since more than one creditor starts to jump at the opportunity to increase your interest rates, if you did not have financial difficulties to begin with - you surely will after they all start to adjust your terms negatively for little to no reason whatsoever.
Credit card companies deserve the right to increase their rates to adjust for proper risk, or to adjust the amount of available credit to a borrower. However these adjustments should be for proper reasons and with just cause. I bet most consumers would feel that them making adjustments to the terms of their credit cards is done though with the greatest desire to increase the banks income rather than trying to be the least bit fair to the consumer.
The only good thing from all of this is that as the credit card companies continue these type of tactics, when all of this recession and financial difficulties recedes and hopefully consumers get back on their feet, when the card companies start needing paying customers once again - I sincerely hope every customer cuts up their offers and severely affects their credit card usage, and these banks profits forever.
4-24-2009 @ 6:12AM
al coholic said...
Local loan sharks and the mob are kinder lenders than credit card companies. We have been indentured servants to them for far too long.
4-24-2009 @ 8:42AM
LFunchesC21 said...
The story is simple - Credit card companies are essentially banks; and banks make money by charging as much interest as they can get on the money they loan out. For years we have needed a cap on the rates these banks can charge and we need to eliminate all of the extras and add-on chrges they soak people with. The proper business of government is to protect the people, not big business. Maytbe we finally havea President who understands this principle.
As far as credit is concerned all of the entrys on the credit bureaus are automated and completed without any review by a human being. This also needs to stop. Computers should not be nmaking decisions that will adversely impact thie lives of millions of people.
5-27-2009 @ 10:15AM
Ana Banana said...
The worst CC company for me is definitaly US AIRWAYS MASTERCARD!!!!!!!!!!!!!!!!
they have the worst customer service i have ever dealt with!
and the highest interest rate i have ever dealt with!