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  (#1 (permalink)) Old
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Obama to take aim at credit card abuses - April 20th 2009, 12:05 AM

Obama to take aim at credit card abuses

White House top economic advisor Summers says administration will crack down on deceptive practices that have saddled consumers with debt.

April 19, 2009: 5:49 PM ET
WASHINGTON (Reuters) -- WASHINGTON (Reuters) - President Barack Obama plans to crack down on deceptive credit-card industry practices that have saddled U.S. consumers with huge debts and soaring interest rates, U.S. officials said Sunday.
Top White House economic adviser Lawrence Summers said Obama would be "very focused in the very near term on a whole set of issues having to do with credit card abuses."
"We need to do things to stop the marketing of credit in ways that addict people to it," Summers said in an interview on the NBC television talk show "Meet the Press."
Summers, director of the White House National Economic Council, said the administration is concerned about practices that result in consumers being "deceived into paying extraordinarily high rates that they wouldn't have paid if they knew they were getting themselves into."
Summers and other officials are scheduled to meet Thursday at the White House with top executives of credit card companies.
The meeting comes as lawmakers in the Democratic-led Congress have vented anger that banks with big credit card operations charging high interest rates and fees are the same institutions getting government bailouts from U.S. taxpayers who use these credit cards.
The House and Senate are considering a credit card "bill of rights" that would limit the ability of credit card companies to raise interest rates on existing balances and require greater disclosure of terms.
Federal Reserve Chairman Ben Bernanke has spoken out against complexity in consumer lending practices that is designed to confuse customers and drive up lending fees.
The Fed tightened rules on credit-card practices in December, but the proposed legislation would take that further.
White House spokeswoman Jen Psaki said credit-card abuses were a priority for Obama, who highlighted the subject during his campaign last year. "We look forward to working with Congress on these issues," Psaki said.



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http://money.cnn.com/2009/04/19/news...n=money_latest
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Re: Obama to take aim at credit card abuses - April 20th 2009, 12:17 AM

People need to learn how to use a credit card.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 12:54 AM

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People need to learn how to use a credit card.
That's all you have to say about banks specifically making everything complicated and trying to screw over people? The majority of the people in the world are not finance majors therefore there is no way for most people to even know that a bank is trying to screw them over.
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Re: Obama to take aim at credit card abuses - April 20th 2009, 01:00 AM

It's not just the people, it's the companies too. They should know that at a certain point, raising interest levels too high will make payment almost impossible.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 01:13 AM

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It's not just the people, it's the companies too. They should know that at a certain point, raising interest levels too high will make payment almost impossible.
Well what they do is try to get as much money out of the people and then sell the debt to collectors. Those guys will then call you every day and make a profit.
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Re: Obama to take aim at credit card abuses - April 20th 2009, 01:16 AM

That's why I don't misuse my credit card I don't spend more then 20$ at a time.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 01:40 AM

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That's why I don't misuse my credit card I don't spend more then 20$ at a time.
Why would it matter if you spend more? I've spent 1000 dollars once on a purchase. I just make sure to pay everything off at the end of the billing cycle so I don't get hit with interest rates.
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Re: Obama to take aim at credit card abuses - April 20th 2009, 02:12 AM

Thats why people have massive debt which they cant pay off.



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Re: Obama to take aim at credit card abuses - April 20th 2009, 02:44 AM

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Thats why people have massive debt which they cant pay off.
Then why don't I have debt even though I've charged thousands onto my credit cards?
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Re: Obama to take aim at credit card abuses - April 20th 2009, 02:55 AM

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Then why don't I have debt even though I've charged thousands onto my credit cards?
Because you pay off the balance right how many americans only pay off the minimum amount which causes interest and if they are late in payments they get late fees.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:02 AM

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Because you pay off the balance right how many americans only pay off the minimum amount which causes interest and if they are late in payments they get late fees.
But do you realize that most Americans do not understand how the interest rates and late fees work? That is why Obama is pissed. The credit card companies are creating ridiculous interest rates and late fees that makes it impossible for people to pay off credit card debt.
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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:08 AM

I think this is mostly to get out of the recession, no? And then people can work on learning how to use credit cards and so forth. Obama just doesn't want them taking advantage of us.



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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:09 AM

Yes I understand people don't understand how credit works but I don't get why people use credit on luxury items.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:14 AM

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Yes I understand people don't understand how credit works but I don't get why people use credit on luxury items.
Why wouldn't you do that? If you have a 10k limit why wouldn't you buy a computer or a tv with your card?
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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:17 AM

I don't need a new computer or tv I just bought a new tv a month ago. I only use my card for minor purchases to build up credit not debt.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:20 AM

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I don't need a new computer or tv I just bought a new tv a month ago. I only use my card for minor purchases to build up credit not debt.
But you CAN use a credit card to buy a tv. And credit card companies want you to make monthly payments because that is how they make money. The people that cannot pay everything off are their bread and butter.
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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:29 AM

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Why wouldn't you do that? If you have a 10k limit why wouldn't you buy a computer or a tv with your card?
How about because you don't have enough money to pay it off. It's pretty simple. You make x amount of money, so you can't spend more than x. Anyone who can't grasp that concept really shouldn't have a credit card.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:31 AM

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I don't need a new computer or tv I just bought a new tv a month ago. I only use my card for minor purchases to build up credit not debt.
Erm, that's great you don't need a new television?

In the case that you did need a new television would you walk around with 1k in cash in your pocket? O.o



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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:33 AM

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How about because you don't have enough money to pay it off. It's pretty simple. You make x amount of money, so you can't spend more than x. Anyone who can't grasp that concept really shouldn't have a credit card.
I agree with this 100%!


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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:37 AM

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How about because you don't have enough money to pay it off. It's pretty simple. You make x amount of money, so you can't spend more than x. Anyone who can't grasp that concept really shouldn't have a credit card.
Then why do the credit card companies push the idea of minimum payments, to use a credit card to buy things you can't buy and instead pay it off over time?

And yes if anyone that can't grasp that idea shouldn't have a credit card but credit card companies still target people that can't pay off their bills. They also target people that went into bankruptcies. That is their bread and butter.

They push credit cards onto college kids that they KNOW don't have the money to pay off their bills. But they do know that their parents will bail them out. Hell, I've gotten so many credit line increases even after not using my credit card for a year. Why the hell do I need a credit line increase?
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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:42 AM

Because they try and get you to max out.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:45 AM

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Because they try and get you to max out.
Exactly. Therefore it is not just the people screwing themselves over. It is also the credit card companies trying to screw over people in order to make a profit. Obama wants to prevent that.
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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:50 AM

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Then why do the credit card companies push the idea of minimum payments, to use a credit card to buy things you can't buy and instead pay it off over time?

And yes if anyone that can't grasp that idea shouldn't have a credit card but credit card companies still target people that can't pay off their bills. They also target people that went into bankruptcies. That is their bread and butter.

They push credit cards onto college kids that they KNOW don't have the money to pay off their bills. But they do know that their parents will bail them out. Hell, I've gotten so many credit line increases even after not using my credit card for a year. Why the hell do I need a credit line increase?
The credit card companies obviously are just out to make money. You don't have to be very intelligent to figure out how a credit card works, and how you're gonna end up in debt. All it takes is common sense and reading the contract you sign, perhaps a bit of simple math here and there too. Nothing very difficult. People are just too impulsive and trusting. I don't have an ounce of sympathy for them!


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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:53 AM

That's how they make money people don't pay off the debt.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:55 AM

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The credit card companies obviously are just out to make money. You don't have to be very intelligent to figure out how a credit card works, and how you're gonna end up in debt. All it takes is common sense and reading the contract you sign, perhaps a bit of simple math here and there too. Nothing very difficult. People are just too impulsive and trusting. I don't have an ounce of sympathy for them!
Not possible when the US currently has a sh!tty primary education system and the contracts are ridiculously complicated that most people do not understand them. They are made specifically to be confusing.

That is why Obama is trying to stop the credit card companies of screwing over people that they KNOW don't understand how credit cards work or those that are in dire economic situations.

For example: People will medical bills rely on credit cards and then they go bankrupt. The credit card companies keep offering them credit because they know they are easy targets.
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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:56 AM

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Exactly. Therefore it is not just the people screwing themselves over. It is also the credit card companies trying to screw over people in order to make a profit. Obama wants to prevent that.
Maybe a better method of prevention would be improving the education system so that everybody knows how to do the simple calculations to figure out how much money their going to pay with the percentage of interest on their credit card. The government's job is not to baby the population. If people get themselves into trouble for acting like a moron, then they deserve it.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 03:56 AM

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That's how they make money people don't pay off the debt.
Well it would be impossible to pay off a lot of the debt now too. The interest rates and fees are really bs and the companies know this but they don't care. All they want is the profit, it doesn't matter if the person goes bankrupt.

Quote:
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Maybe a better method of prevention would be improving the education system so that everybody knows how to do the simple calculations to figure out how much money their going to pay with the percentage of interest on their credit card. The government's job is not to baby the population. If people get themselves into trouble for acting like a moron, then they deserve it.
That takes time to accomplish. At the same time we need to make sure the companies stop taking advantage of people.

Last edited by Gram Negative; April 20th 2009 at 03:57 AM. Reason: Multiple posts have been merged automatically.
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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:00 AM

Which we go back to responsiblity of using the cards. Spend only what you can pay back.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:00 AM

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Not possible when the US currently has a sh!tty primary education system and the contracts are ridiculously complicated that most people do not understand them. They are made specifically to be confusing.

That is why Obama is trying to stop the credit card companies of screwing over people that they KNOW don't understand how credit cards work or those that are in dire economic situations.

For example: People will medical bills rely on credit cards and then they go bankrupt. The credit card companies keep offering them credit because they know they are easy targets.
If people don't understand the terms of a credit card then they shouldn't get one! Would you play a high stake card game if you didn't know how to play the game? Of course not!

Medical bills are one exception, because obviously if you need an operation you need an operation. You don't need a tv, computer, or sports car though. On a side note, I find it appalling that people have to go into debt to pay their medical bills, and I very much hope that Obama implements universal health care into the US.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:04 AM

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If people don't understand the terms of a credit card then they shouldn't get one! Would you play a high stake card game if you didn't know how to play the game? Of course not!
But what if they read it and see them it seems reasonable and then find out it's all bs? That is the whole point, to make it seem like it's a good idea except in the long term is screws people over.

Quote:
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Medical bills are one exception, because obviously if you need an operation you need an operation. You don't need a tv, computer, or sports car though. On a side note, I find it appalling that people have to go into debt to pay their medical bills, and I very much hope that Obama implements universal health care into the US.
Actually half of the bankruptcies in the US are caused by medical bills. And credit card companies target these people. So people start using their cards for rent, food, medicine, etc. Then they are screwed. And the credit card companies keep offering them credit even though they KNOW they can't pay off the credit card, lol.
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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:04 AM

People don't read contracts they just sign and collect.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:04 AM

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Which we go back to responsiblity of using the cards. Spend only what you can pay back.
And what happens when you are in an emergency and have to buy something?

Quote:
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People don't read contracts they just sign and collect.
And companies know that most people don't understand them. That is the whole point. Don't you think it's better to make them more clear?

Last edited by Gram Negative; April 20th 2009 at 04:05 AM. Reason: Multiple posts have been merged automatically.
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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:13 AM

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That takes time to accomplish. At the same time we need to make sure the companies stop taking advantage of people.
Maybe people just need to learn their lesson the hard way.


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But what if they read it and see them it seems reasonable and then find out it's all bs? That is the whole point, to make it seem like it's a good idea except in the long term is screws people over.
Most people don't even read it. They skim it at best. They also don't ask for clarification on things they don't understand. I don't know what the contracts are like exactly, but it's not like they are allowed to lie or change anything. People need to realize that credit card companies are there to make make money, not to help them.


Quote:
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Actually half of the bankruptcies in the US are caused by medical bills. And credit card companies target these people. So people start using their cards for rent, food, medicine, etc. Then they are screwed. And the credit card companies keep offering them credit even though they KNOW they can't pay off the credit card, lol.
That is pretty disgusting, but that's also business I guess. That's why every country should have universal health care (in my opinon).


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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:15 AM

I define an emergency as life and death situtation not I need a mercedes or bmw.... as far as contracts people should READ the contract. again [READ] before signing the dotted line. The Terms of contract. If they have Questions ask the Company don't just sign without understand what overlimit fees are or what interest percentage means.


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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:20 AM

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Maybe people just need to learn their lesson the hard way.
Except you do realize that is irrelevant when a lot of people are screwed for life? And then the companies continue to target more people over and over.


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Originally Posted by Khadra View Post
Most people don't even read it. They skim it at best. They also don't ask for clarification on things they don't understand. I don't know what the contracts are like exactly, but it's not like they are allowed to lie or change anything. People need to realize that credit card companies are there to make make money, not to help them.
Well actually they are allowed to change parts of the contracts over time and can increase interest rates on debt in a jiff. So once you are in debt they increase your interest rate which makes it practically impossible to pay off your debt. Why would they do this?



Penalty Fees, Interest Rate Hikes, and Misleading Contracts Await Credit Card Shoppers

http://www.consumeraffairs.com/news0...dit_cards.html
Quote:
Originally Posted by Khadra View Post

That is pretty disgusting, but that's also business I guess. That's why every country should have universal health care (in my opinon).
So shouldn't we prevent them from targeting people that they KNOW cannot pay off their debt?

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Originally Posted by EDGE View Post
I define an emergency as life and death situtation not I need a mercedes or bmw.... as far as contracts people should READ the contract. again [READ] before signing the dotted line. The Terms of contract. If they have Questions ask the Company don't just sign without understand what overlimit fees are or what interest percentage means.
What about food, rent? medical bills? life saving medicine?

Contract?

Penalty Fees, Interest Rate Hikes, and Misleading Contracts Await Credit Card Shoppers

http://www.consumeraffairs.com/news0...dit_cards.html

Last edited by Gram Negative; April 20th 2009 at 04:21 AM. Reason: Multiple posts have been merged automatically.
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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:28 AM

LOL how hard is it to sit down and read the contract. If it takes you a few hours so be it. Take the time to understand the above reasons. Don't just sign the line without reading!


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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:33 AM

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LOL how hard is it to sit down and read the contract. If it takes you a few hours so be it. Take the time to understand the above reasons. Don't just sign the line without reading!
Did you read the article?

"Too many credit cards are designed to get you in debt and keep you there."

"It also finds that current fee disclosures are difficult to understand, bury important information, and often fail to convey to cardholders when late fees would be charged and what actions could result in penalty interest rates."
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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:38 AM

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Originally Posted by Gram Negative View Post
Except you do realize that is irrelevant when a lot of people are screwed for life? And then the companies continue to target more people over and over.
But that is their own fault! They should be more careful.


Quote:
Originally Posted by Gram Negative View Post
Well actually they are allowed to change parts of the contracts over time and can increase interest rates on debt in a jiff. So once you are in debt they increase your interest rate which makes it practically impossible to pay off your debt. Why would they do this?
The contract states that they can increase your interest rate. They can't actually change the contract itself.


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Originally Posted by Gram Negative View Post
Penalty Fees, Interest Rate Hikes, and Misleading Contracts Await Credit Card Shoppers

http://www.consumeraffairs.com/news0...dit_cards.html
I read the entire article and there is really nothing unexpected there. It's a business. Of course they are going to do those things. I really don't think it's that deceptive.

Quote:
Originally Posted by Gram Negative View Post
So shouldn't we prevent them from targeting people that they KNOW cannot pay off their debt?
People shouldn't have to go into debt over medical bills period. The credit card companies are there to make money. They are not a charity. I think it's horrible and that's why I could never be a business person, but they aren't doing anything illegal so I don't see why the government has the right to get involved.

Trust me, I'm not saying what the credit card companies are doing is right. I just think people need to take more responsibility for their actions. I know more than a few people who have gotten themselves into ridiculous amount of debt over frivolous things. We live in a world of "buy now, think later" and that needs to end.

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Originally Posted by Gram Negative View Post
And what happens when you are in an emergency and have to buy something?
People should never have to use credit cards for emergencies (rent, food, doctor). Goverment agencies should provide those kinds of things in emergencies (and actually they do in Canada).


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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:45 AM

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Originally Posted by Khadra View Post
But that is their own fault! They should be more careful.
You were talking about how they learned their lesson. That is not a lesson learned, that is their life screwed with no way of fixing it.



Quote:
Originally Posted by Khadra View Post
The contract states that they can increase your interest rate. They can't actually change the contract itself.
"It also finds that current fee disclosures are difficult to understand, bury important information, and often fail to convey to cardholders when late fees would be charged and what actions could result in penalty interest rates."



Quote:
Originally Posted by Khadra View Post
I read the entire article and there is really nothing unexpected there. It's a business. Of course they are going to do those things. I really don't think it's that deceptive.
It is deceptive... That is what many financial professors at harvard, yale, etc. have said.

They are literally acting like loan sharks... do you know what a loan shark is?


Quote:
Originally Posted by Khadra View Post
People shouldn't have to go into debt over medical bills period. The credit card companies are there to make money. They are not a charity. I think it's horrible and that's why I could never be a business person, but they aren't doing anything illegal so I don't see why the government has the right to get involved.
They wrote the laws to make it legal. Bush allowed the bills to pass. Now Obama is trying to reverse all the bs.

Quote:
Originally Posted by Khadra View Post

Trust me, I'm not saying what the credit card companies are doing is right. I just think people need to take more responsibility for their actions. I know more than a few people who have gotten themselves into ridiculous amount of debt over frivolous things. We live in a world of "buy now, think later" and that needs to end.
And the companies keep pushing the idea of using credit for things you can't pay off. There are even studies that do research into convincing people to buy certain things, buy more, use credit cards, etc. That is f@cked up.

Last edited by Gram Negative; April 20th 2009 at 04:48 AM. Reason: Multiple posts have been merged automatically.
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Re: Obama to take aim at credit card abuses - April 20th 2009, 04:51 AM

That's funny I am not in debt. why? I handle my credit cards responsibly.


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