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Credit Cards: Are you kidding?
Are you hearing the industry's reasons for not wanting any more limits imposed on credit cards?
Here's from TheStreet.com:
"I think people are recognizing that the dilemma of credit card companies is that if they don't charge a certain rate, they'll go out of business," said Jim Cramer on Thursday's "Stop Trading!" segment on CNBC.
What, they can't make money unless they have things as they are? The prime interest rate is 3.25 percent but the average variable-rate credit card is charging 10.78 percent. That's not enough room for a little profit? And who, frankly, is paying that average rate? A lot of people are paying more, much much more.
The veiled threat from the industry: Rein us in and we'll cut your credit.
I have a few choice responses to that. What's yours?
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Harriet Johnson Brackey, the personal finance writer for the Sun-Sentinel, has been an award-winning business...
Comments
There's validity to the statement simply because the good payers have to pay for the slugs.
I don't care what the credit card companies charge as far as a rate, provided you know ahead of time. But these cards are not considered variable rate when you sign up for one and they should NOT be allowed to change without a justifiable reason.
Posted by: KCK | April 24, 2009 12:02 PM
I also think the way credit scores are calculated needs to be re-thought.
It's not right that a credit card company can affect your score, again for no justifiable reason. For example you owe $2500 on a $5000 limit and have always paid on time and suddenly they lower the limit to $2500. Well they just dumped on your credit score because you now have a maxed out card. Don't get mad, pay the card off and stuff the card in a drawer and not use it either.
Posted by: KCK | April 24, 2009 12:07 PM
I heard from a reader whose limit was cut, overnight, from $10,000 to $1,000. You're right, KCK, it's the changing of the deal without warning and using unfair metrics, that is as infuriating as the high rates.
Posted by: Harriet Johnson Brackey | April 24, 2009 12:31 PM
The government should not have helped the banks with bail-outs unless the banks were willing to, in turn, help the people in this country by lowering interest rates to 5 or 6%, instead of the 18, 25 and even 30% that they now charge. Obama needs to broker a better deal with the banks for "we the people".
Posted by: JZ | April 24, 2009 3:13 PM
heres where we all take the personal bailout..
Posted by: antibarby | April 24, 2009 5:08 PM
All credit card companies are evil. These people who keep sticking up for them are either shills or extremely naive.
Some recently showed that the "mob" charged less interest than the CC companies.
Go back in time when there were MANY individual credit cards offered by department stores, oil companies, etc. Their interest rates were reasonable. Now, the major CC's BOUGHT all the CC business from other card offerers. What used to be reasonable is now part of a scheme to make money essentially illegally (because the laws are either non-existent or were written by the industry via payoffs to lobbyists/politicians).
This cartel-like gang of criminals needs to be smashed/crushed.
Posted by: Jake | April 24, 2009 6:36 PM
Interesting. Thank you for sharing this.
Posted by: Die Cut Business Cards | April 30, 2009 2:05 AM
Hi there --
I'm Diane Lade, a consumer reporter here at the Sentinel and Harriet's co-worker. I am doing a story today (Thursday) and intersted in talking to people who have had the credit card limits raised or their rates hiked unexpectedly. Interested? Please give me a call at 954-356-4295.
Posted by: Diane | April 30, 2009 1:39 PM