Credit Card Companies

[mlbrowninwa]

I don't know about anyone else, but all these companies that we are helping out sure have it out for us good credit risk people. My wife and I both have over 700 credit scores, have never in 17 years of marriage missed or had a late payment on anything! We have some debt that we are paying down and entering the year we were using about 38% of our available credit between cards and bank lines of credit. Most of the time we pay more if not double the minimum. We both have good long standing jobs and make good money.

Over the last six months, the banks and card companies have cut all our available credit to where now i'm using close to 90% of my available. They have cut off 10's of thousands. Way to put a shot in the old economy by choking off any possibility of me buying anything big. The more they do it, the more i stop buying anything and continue to save every dime. This really doesn't hurt my family, but it could hurt others. It really makes me mad to see what has happened to this country over the last few months.

[Maxel]

Your treatment at the hands of the credit card companies reminds me of a story from my personal life:

There was a man in my ward growing up who also had outstanding credit. His frugality was superb; he never missed a payment on anything- including his credit cards. Because his company offered a rewards program, and he never missed a payment (therefore never having to pay the exorbitant interest rates), it actually cost the company to continue to let him use his credit card. The company was continually pressuring him to cancel his card. This was about 2-3 years ago.

It made me think: what kind of business capitalizes on the irresponsibility of its patrons? Then I realized that it wasn't just this one company: the entire credit card industry thrives on irresponsible men and women overspending and getting in debt. Another way that, economically, America shot itself in the foot.

[Traveler]

What most people do not realize is that there has been a great shift in credit over the last 50 years and credit has become one of the major sources of revenue in business. Currently banks and credit companies make over 80% of their profits through various fees and charges - not including the charging of interest (that use to be the major source of profits in the credit industry). Most consumers to not understand that when they take out a loan they are talked into “locking in” a rate that results in a fee charged against the loan – this is in addition to origination fees that are charged.

It is important for banks to create ways for home loans to be refinanced every 5 years as a minimum in order to meet quotas to justify multi-million dollar bonuses at the executive level. The so-called interest bubble is not really a bubble based on interest in the credit industry – it became a problem because banks were leveraging additional capitol based on turnover of loans. And it does not take a brain surgeon to see the flaw in leveraging virtual capitol.

Even though we know such profits cannot be sustained the banking industry is being given “stimulus” that is nothing more than the largest rip-off or involuntary transfer of wealth to have ever taken place in human history. Please note that both Democrats and Republicans are involved in this swindle. If anyone ever wanted proof that Satan controls the treasures of the world and will use those treasures to buy up governments, militaries and religions – just watch as scripture and prophesy is fulfilled.

The Traveler

[pam]

I was talking just recently to a customer that comes into my store every day. He is the general manager of a large car dealership in the area. I asked him if I could get a better deal on a vehicle if I paid cash. He kind of chuckled and so no...I would probably get a much worse deal paying cash as they rely on credit to maintain business profits.

How funny that just a few years ago..they would have taken cash in an instant and given you a much better deal to have the money upfront.

[rameumptom]

I applaud the credit card companies for finally becoming responsible. There are only 4 reasons a person needs credit: buy a home, start a business, finance college/trade, and MAYBE buy a car.

For that, you need a good credit score. Credit cards are only for developing a good credit score. This means you don't continually carry over large amounts of debt on it from month to month. If you are at 90% of the total credit limit amount they are giving you, reality is you are probably a bigger risk than you think (at least in this economy).

Credit cards should be used only to improve your credit score, by making planned purchases (something already planned in your budget). Ease of purchase is fine, as long as you promptly pay off the card afterward.

We have to get away from the idea that credit is a form of income, which is what society has taught us for the last 25 years. It never was and it never will be.

Get out of debt. Pay off your debts. Release yourself from bondage.

[bytor2112]

i'm using close to 90% of my available

That probably lowered your credit score as well.......

[Churchmouse]

I applaud the credit card companies for finally becoming responsible. There are only 4 reasons a person needs credit: buy a home, start a business, finance college/trade, and MAYBE buy a car.

For that, you need a good credit score. Credit cards are only for developing a good credit score. This means you don't continually carry over large amounts of debt on it from month to month. If you are at 90% of the total credit limit amount they are giving you, reality is you are probably a bigger risk than you think (at least in this economy).

Credit cards should be used only to improve your credit score, by making planned purchases (something already planned in your budget). Ease of purchase is fine, as long as you promptly pay off the card afterward.

We have to get away from the idea that credit is a form of income, which is what society has taught us for the last 25 years. It never was and it never will be.

Get out of debt. Pay off your debts. Release yourself from bondage.

Thats good advise, but doesn't apply to most people. They come after the young and inexperienced. When my daughter was in college she received card offers every day. By the time these young people realize what they are into they may be thousands of dollars in debt.

And then the company will raise your interest rate on current balances. Congress passed a law to stop that but it doesn't take affect until 2010. As Sen. Chuckie( Schumer) said. "By then everyone will be at 23%." They are working now to fix that.

Cards are a necessary evil. If you want to reserve a rental car or hold a motel room you must supply a card number. I always do that but then pay cash when I settle up. Unfortunately, most do not. That's how these banks build those skyscrapers.

Edited May 5, 2009 by Churchmouse

[Palerider]

I was talking just recently to a customer that comes into my store every day. He is the general manager of a large car dealership in the area. I asked him if I could get a better deal on a vehicle if I paid cash. He kind of chuckled and so no...I would probably get a much worse deal paying cash as they rely on credit to maintain business profits.

How funny that just a few years ago..they would have taken cash in an instant and given you a much better deal to have the money upfront.

They don't like it when you pay cash because they won't make any money off of financing....they will then try to sell you everything while you are closing on your car, thats their last chance to make money from you. The finance person you are talking with usually only makes a commission from what they sell you. If you pay cash they don't make any money from the deal. They will if you buy gap insurance, extended warranty etc.

[mlbrowninwa]

That probably lowered your credit score as well.......

Exactly. As they continue to lower the credit limits that I have had for 10 years and this in turn pushes up my amount of credit in use, it will lower my credit score. No reason for it to be lower, but it will be as a result of their manipulation, nothing that I have done. But if that is the game they want to play, I will be more than happy to play it. It will be their loss and my gain as my days of doing business with these companies will soon be over! Not that they care.

[mlbrowninwa]

They don't like it when you pay cash because they won't make any money off of financing....they will then try to sell you everything while you are closing on your car, thats their last chance to make money from you. The finance person you are talking with usually only makes a commission from what they sell you. If you pay cash they don't make any money from the deal. They will if you buy gap insurance, extended warranty etc.

This is true. A friend of mine is a finance manager for a Cadillac dealer. The dealership doesn't really make anything on the new car sale compared to the extended warranties, financing, etc. These things are where they make their money. They make money on the financing as they are basically buying credit from the banks at one rate and selling it to you at another rate for the banks. They get a kick back based on the difference in the rate. The last new vehicle i bought i called him and asked him what the buy rates were before going in the dealership(different one as i didn't want a Cadillac). Should have seen the face of the finance guy I was dealing with when i told him what the buy rate for my bank was and that I thought he could get me a better rate.

[Palerider]

I use to work at Car Dealerships...and when I purchase a car you should see the look on thier face when they offer to sell me an extended warranty and I ask them which one we are talking about. When they tell me which one its usually the one I know that delaers love to sell because they make more money from it and they get a kick back. I always tell them I would never have that warranty even if they gave it to me.....

Then we talk about the other warranties they have and I get this one warranty that is my personal favorite....

[hordak]

Cards are a necessary evil. If you want to reserve a rental car or hold a motel room you must supply a card number.

Sad but true. I wonder how much is ligament (I.E. If they trash the car we will charge them) or if there are kickbacks involved like with auto dealers?

[pam]

I don't own even one credit card..yet I am able to rent a car and reserve a hotel room using my Visa check card. I have done it numerous times.

[rayhale]

President Obama said that he wants to reform credit card companies, he said that he wants to change how credit card companies hide charges in 'fine print', and force them to make the language of credit card applications to make it easier to read. I have to see it to believe it, since the government has punished the 'Joe the Plummer' Americans, for the someone else's mistakes. Like bailing out Wall Street, but not Main Street.

[mlbrowninwa]

We had a customer come into our auto service business yesterday to pick up their car. Their bill was just over $700. They pulled out the Bank of America Mastercard to pay for it and it was declined. They called the bank from the office and found out that their credit limit had been drastically lowered with no prior warning. This is has been happening to me for no reason. It is not right and for my part i am exploring legal means to correct it.