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| User Info | Recovery? How, Given THIS? in forum [Ticker] | |||
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Genesis Posts: 71431 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/1535-R....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-10-22 18:06:29
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Moniteyes Posts: 2400 Incept: 2008-11-28 ny
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Another reason to pay the entire balance in 20 days each month.
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2009-10-22 18:14:23
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Mangoelvis Posts: 250 Incept: 2009-07-11 
Las Vegas, NV
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So what happens when all their good customers transfer their accounts to small banks and credit unions....and their "bad" customers just stop paying and default?????? More bailouts????
---------- A Venus Fly Trap is one of the only organisms that can be cannibalistic and vegetarian at the same time.
2009-10-22 18:17:17
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Xorbe Posts: 41 Incept: 2009-06-23 Bay Area, CA Online
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"Interest back", what a term! I love it.
2009-10-22 18:22:47
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Abn0rmal Posts: 2320 Incept: 2009-01-10
DFW Online
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Even credit unions are doing this. I found out about a week ago that my 7.9% credit card will become a 17.9% credit card as of January. At least they gave me the option to opt out of the new rate by closing the account and paying it off at the existing rate.
2009-10-22 18:25:04
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Lowcarb Posts: 80 Incept: 2009-06-30 
The Real Bay Area
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This whole thing has become 2-tier: good credit users who can get good interest rates because they actually pay their obligations and bad credit risks who can only get a high-interest cc because they can't qualify for anything else. Card users who use PenFed or other reputable institution's credit card will be viewed as a responsible credit user and those who use BofA/Citi/Chase cc will be viewed as an irresponsible credit user. Its come down to that. Sort of like which side of the train tracks do you live.....which credit card do you carry. Can I say this: a PenFed card is the new Amex Black Card....
2009-10-22 18:29:10
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Lowcarb Posts: 80 Incept: 2009-06-30
The Real Bay Area
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Jbyer: check out PenFed. They recently had a special promotion of a 4.9 percent interest rate for new cc accounts. I think that window has closed, but you could call them and see if they have any specials coming up. Right now they have some sort of special offer on new auto loans for 3.99 percent. https://www.penfed.org Last modified:
2009-10-22 18:34:59 by lowcarb
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Blackmane Posts: 69 Incept: 2008-03-07
Rocklin
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Quote:If the previous interest rate on those cards was around 20% and is now 29%, the average family with a balance (about 44% of all households) was paying $3,600 in interest charges previously, but now will be paying $5,220, and increase of $1,620 a year or $135.00 a month. After checking the numbers again, wouldn't the final hit to disposable income be $82.6 billion, not $187 billion? Because you don't use all households in the number to calculate the per household hit, but just the households carrying a balance. (116 million households * 44% balance carrying households) Or did I miss something? Last modified:
2009-10-22 18:38:05 by blackmane
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Abn0rmal Posts: 2320 Incept: 2009-01-10
DFW Online
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Quote:check out PenFed. They recently had a special promotion of a 4.9 percent interest rate for new cc accounts.Canceling the account doesn't actually change any aspect of my spending behavior. I've already stopped using it and am just paying it off at the existing interest rate. It's just annoying to get that kind of a letter after years of good behavior. Last modified:
2009-10-23 07:12:18 by jbyer
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Slyace Posts: 1061 Incept: 2007-10-02
Dallas
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Even at 20%, there is no way the vast majority would ever be able to climb out of the hole. Whatever caused them to have credit card debt in the first place (spending more than they make) would prevent them from paying off the debt EVEN AT a reasonable rate. I assume they are only doing this to customers who carry balances. I use Citi for both personal and business because of the miles. Frankly, now that I think about it, even if they increased my rate to 30% I would still use them because I never carry a balance. I noticed the other day that my Citi work card has a credit limit of something like 60k and a cash advance limit of more than 40k, both with pretty high rates (maybe 18% and 22%). In my opinion, having these limits is extremely stupid on Citi's part because the ONLY scenario under which they would get used is where the customer is about to go under. My monthly business charges average 5-6k and have probably never gone over 12k, so why would they give me 60k in credit?
2009-10-22 18:43:41
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Bicycle Posts: 685 Incept: 2008-09-05
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---------- The Coming Collapse of the Middle Class http://www.youtube.com/watch?v=akVL7QY0S.... the government comes for the regular people first http://www.youtube.com/watch?v=nFY0HBkUm....
2009-10-22 18:45:22
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Future_shock Posts: 1141 Incept: 2007-10-16
Texas
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Why doesn't the FED buy some credit card securities? Why focus just on mortgages?
2009-10-22 18:50:32
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Arrack979 Posts: 1271 Incept: 2008-07-15
Blue State Hell
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Just wait till this **** hits the mortgage market. BOOM!!! Game over. ---------- Cash IS a position, just like fetal and reverse cowgirl
2009-10-22 18:51:05
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Genesis Posts: 71431 Incept: 2007-06-26
KD^2
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Tanks for the catch on the GDP number - the first one (interest only) missed a divisor, but the "total impact" figure did not.
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-10-22 18:57:50
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Jstanley01 Posts: 2571 Incept: 2008-07-30
San Antonio, Texas Online
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Revolving credit has always been a scam. The only thing the pigmen are loaning you money for is your first purchases, up to your limit. Afterwards you're forking over money to them, to keep your balance in check, which you would have otherwise had in your back pocket to make your followup purchases WITHOUT INTEREST. Welcome to the debt slavery game. You don't have to pay if you don't play.
---------- ...so in short, my fellow Texans, we must secede. "For the children..." --Me
2009-10-22 19:05:17
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Steelhead23 Posts: 388 Incept: 2008-09-09 Portland OR Online
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Ho-Ho-Ho Merry Christmas, Merry Christmas. There's going to be a lot of coal in the stockings this Christmas. This is gonna kill retail - dead as a doornail. Oh, and that 8.9% growth in China? It's coal for them too. On Dancer. On Prancer .... Dash away, dash away home.
---------- short em all - let God sort em out!
2009-10-22 19:09:51
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Financeguy Posts: 4946 Incept: 2007-08-10
Charlotte Online
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What ever happened to usury laws? How nostalgic....
---------- "Granted, if you are not into Barbara Streisand and creme brulee, South Beach could be a tad lonely." Eleua
2009-10-22 19:16:15
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Arw Posts: 68 Incept: 2009-03-02
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"Dear John," Did you make that up?
2009-10-22 19:17:40
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Cjworkman Posts: 5615 Incept: 2007-08-22
Online
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Karl, Look at COF's report; 70% of their revenue came from CC's. Mostly from increased gross margins on them. Most likely from the same thing Citi is doing. At the same time though,... Credit card deliquencies rose 54 basis points in one quarter. From 4.99% to 5.53% in 3 months.. That's likely to only compound as more interest piles up on new charges. ---------- Ben is going to create an equity bubble from excess liquidity that tops at 1200... and bottoms at 300. A bubble inside of bearish economic conditions, so that it never reaches new market highs and crashes far below the lows. - me
2009-10-22 19:17:57
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Arw Posts: 68 Incept: 2009-03-02
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From the wiki (use at your own risk)... "Each U.S. state has its own statute which dictates how much interest can be charged before it is considered usurious or unlawful. If a lender charges above the lawful interest rate, a court will not allow the lender to sue to recover the debt because the interest rate was illegal anyway. In some states (such as New York) such loans are voided ab-initio[21] However, there are separate rules applied to most banks. The U.S. Supreme Court held unanimously in the 1978 Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp. case that the National Banking Act of 1863 allowed nationally chartered banks to charge the legal rate of interest in their state regardless of the borrower's state of residence.[22] In 1980, due to inflation, Congress passed the Depository Institutions Deregulation and Monetary Control Act exempting federally chartered savings banks, installment plan sellers and chartered loan companies from state usury limits. This effectively overrode all state and local usury laws.[23][24] The 1968 Truth in Lending Act does not regulate rates, except in the cases of some mortgages, but it does require uniform or standardized disclosure of costs and charges.[25]"
2009-10-22 19:22:14
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Dji Posts: 720 Incept: 2009-04-21
Fleming Island
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More proof the TBTF big Banksters are insolvent . Can we now call them worse than the MOB?
---------- What goes up Must come Down- Alan Parsons Project THE TRUTH HURTS! -Dji
2009-10-22 19:23:48
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Ralf Posts: 49 Incept: 2009-07-11 USA
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I don't understand the argument that GDP will contract because of the increase in interest being paid. The money is going into the hands of the banks - it isn't disappearing. How that money gets spent will determine it's effect on the GDP. Certain sectors will contract while others may expand. I don't disagree that it will have a disruptive effect on the economy.
2009-10-22 19:24:31
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T! Posts: 36 Incept: 2007-12-03 Nevada
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I got two of these letters from citibank yesterday on my credit cards. I have two of their cards with really small balances. prior interest rate was 13.9%- same letter saying its going to 29.9. i have had these cards for many, many years. they rarely have much of a balance and are always paid on time. when i called to opt out, I explained that the loan shark down the street (guido is his name, i think) gave me a better rate... they told me it's because it costs them more for money...lol (oh, they did say they were sorry to lose me as a customer)
2009-10-22 19:26:13
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Jstanley01 Posts: 2571 Incept: 2008-07-30
San Antonio, Texas Online
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Quote:The 1968 Truth in Lending Act does not regulate rates, except in the cases of some mortgages, but it does require uniform or standardized disclosure of costs and charges.Gee Barbie. You mean you didn't read your credit card agreement? 
---------- ...so in short, my fellow Texans, we must secede. "For the children..." --Me
2009-10-22 19:26:34
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Fred_flintstone Posts: 5128 Incept: 2008-04-15
Online
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A lot of this is prompted by the new credit card laws that went into effect in May. Because banks are more strictly regulated in how and when they can charge fees, raise rates, etc., they are basically slashing risk by cutting back open lines, and jacking rates in advance as high as they can within the framework of the new regs. Perfect example of Congress + banks in action, net result consumer is screwed. Here is a guide to the new laws: http://www.creditcards.com/credit-card-n.... The way I think if it is, previously banks extended way too much credit to high risk people, but made it up on late fees, surprise rate increases, etc. Now with tighter regs and even higher default rates, they are methodically doing what they have to do to maintain profit margins. I personally never carry a monthly balance and would advise others to do so only under dire circumstances. And if those circumstances were dire enough I'd just run up the highest balance possible and default. They are in fact increasing the likelihood people do exactly this with these usurious policies. I mean **** these people. Last modified:
2009-10-22 19:28:52 by fred_flintstone
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