Banks increase monthly amount due on credit cards

prepare for more homeless. more death and poverty..add this on to the bankruptcy bill being sacked. People will not be able to survive.

when we DO get a job, they will garnish us up the wazoo.

we wouldn't have this problem. Remember when interest on credit card debt of deductible on your Federal income tax returns? But thanks to the tax "reforms" and "cuts" under the Reagan administration these deductions were done away with and the threshold on allowable medical deductions was raised for 3% to 7% which meant that most people would never be able to claim medical deductions.

I hope those Red-staters who love RW politics and politicians who bought the "deregulation" Kool-aid are happy now!

this little wrinkle will bite some folks in the ass.

bite the right folks, imho. If Congress had to live by the same rules as everyone else, this never would have passed.

...once they pass the bill, Herr Busch will sign it pretty quickly. The bill will not become effective until six months after Herr Busch signs it into law.

With the increase in CC payments causing more bankruptcies and the new law restricting what you can write off the middle class will take it up the wazoo. The rewriting of this bill back to pre 2005 repug act should be a priority for any dems running for congress in 2006 and if necessary 2008. Any dems that voted for this bill should be burned at the stake or at least defeated in their primary by a real dem.

the CC companies and banks are behaving in ways that position themselves to be protected.

since people won't have the money to pay them no matter WHAT the monthly minimum amount is?

CC's generate tremendous return, forcing a customer to pay back money faster would seem disadvantageous to the companies...

So, being completely ignorant of what is going on, I wondered under what circumstance would a lower yield be better?

Well, I thought if it allows you to recover from a potentially poor investment and move to another...so what would make high interest yielding investments in dollars a poor investment...well a devalued dollar...as might occur in a depression. So maybe recovering an investment an getting into Euros would be better, which is to protect your capital.

The bankruptcy law just made it harder for a consumer to be free of repayment... and that seems like protection, too.

you an announcement in big bold letters, right) So if you have a direct draft or online payment set up for $30 and they go to $60 - or you can't afford the new payment - BAM, max out on the interest rate, fees for late, underpayment whatever and you can't file bankruptcy now. How ironic that they just passed the one, then we get this announcement.

They wind up with a huge new cash stream. And the way companies report things, amounts due but not paid probably wind up making them look good to the stockholders somehow, the directors take their options while the values are hyped up, then cash out!

isn't that a coincidence? This is going to put many people right out of business. If they do this to my sister, she might as well jump off a bridge. She's up to her neck in debt and can only afford to pay the minimum each month now. I fear for her.

before the new bullshit draconian anti-consumer bankruptcy laws kick in within the next six months or so. She needs to get out from under and to do so under the current laws. Otherwise, she really may as well just jump off a bridge.

Though I would simply recommend that she speak with a bankruptcy attorney to see what her options are. I think liberalhistorian just might do bankruptcy work, but I don't practice in this area, so I always make sure people speak to those who do. Good luck to her.


And I'd recommend that ANYONE who even remotely thinks this may happen to them in the future at least seek counsel before it is too late.

This was a subject on the Dolan's Show on CNN this morning. They are convinced that this was part of the deal with Congress to get the break in the bankruptcy bill. They believe it was something like "OK Cr Card Companies, we gave you a big break through the bankruptcy bill, now you need to do something in return."

As I understand it, they aren't increasing the payment by very much, and yse it will halp people pay off their balance a little sooner (thereby giving the CCC's a little less in intrest payments, but it's not really enough to make a substantial difference to consumers.

CCC's make MOST OF THEIR $$ on interest, not on the merchant fees. The sooner the public really recognizes that, and really how much they are paying for "that nice dinner last night" the better off they'll be.

Who (but the suckers) makes minimum payments unless they have to? If medical debt is up to 10K, that extra $400/mo would really hurt.

of the balance. That's NOT DOUBLE! I have not read the actual proposal, and am strictly stating what I heard.

If they are doubling the payment, that would be insane! I doubt they would be doubling the payment requirement though, as they would have to realize that would be a physical impossibility for most card holders.

snip>
She said the change from 2 percent of the balance to 4 percent of the balance would translate into the monthly amount due for a client with $9,000 in debt going from $180 a month to $360. snip

But for those who might be more overextended with $20,000 in credit card debt, that monthly payment will change from $400 a month to $800 a month.

this is supposed to be helpful to the little guy? In the eyes of the rich fatcats in DC who put the deal together, the "payback" to consumers woudl be to force them to cough up more money up front each month? HOw about forcing them to lower interest rates?

www.cafepress.com/showtheworld

This will be a disaster for those on the edge. And there are plenty of them.

Yes, we can sit and judge them all we want for having put themselves in that situation, but the fact is, a lot if it isn't from "that nice dinner last night."

LOTS of people are charging groceries and other basic living expenses on their CC because they have recently lost their jobs.

The decline of our country is fast-tracking downwards. Already receiving crap from 10 years back in the mail.

Is there no end to our protection? I live in the State of Confusion...

They should just change the red white and blue, while their at it, to big corporate greed logos.

from 10 years back?

www.cafepress.com/showtheworld

It can cost an arm and a leg in interest.

However, there are times when that's all one can do and it's not fair that the rules are changed after someone has incurred a debt assuming a certain minimum payment. I'm sure the banks have secured the right to make such a change in the fine print.

Yup, they always have. Nobody really reads the Credit Agreement attached to their cards, and the banks know this.

Increasing the minimums is actually one of the few responsible things they can do, despite the pain it will cause existing borrowers.

The current minimums are so ludicrously low, they encourage people to buy those sweaters and CDs and finance them at mortgage-length payoff schedules.

Now, if our useless Congress would only address the rest of the predatory lending practices, we'd be getting somewhere. I'm not holding my breath, though.

Hardly.

They could charge moral interest rates. They could disconntinue the pratice of soliciting new accounts from people without promice to pay them back. They could grandfather in this new policy.

This is not a responsible action.

But they should also make minimum payments that truly reflect a reasonable payment schedule, not dragging out routine purchases as if they were 30-year mortgages. This is one thing that would make people think more than just twice before they took on crippling debt for the long term.

I agree that there are many facets to predatory lending practices; setting arbitrarily low minimums has been one of their favorite sucker plays for decades.

I'd like to see a law that prohibits charging interest on anything but purchases and cash advances. No compounding. No interest charges on late fees. No interest charges on annual subscription fees.

Credit cards 90 days in arrears should be suspended immediately, by law, until the balance is zeroed. The failure of the companies to suspend the cards merely encourages continued debt increases.

Then we need to re-establish usury ceilings.

"Ahh ......Usury...?"

Gotta sent those congress critters back to their funk & wagnall's every once in awhile.

My son, a Marine, financed a laptop through Dell while he was at MOS school last summer. He had just turned 20 and this was his first credit experience. He had already gone through with it by the time he told me about it. The interest rate was over 29 percent!!!!

I strongly advised him to pay that off as quickly as he could but nearly a year later, he owed just as much as he borrowed due to late charges incurred during his transition to Japan. In the meantime, he had obtained a credit card through his credit union. I advised him to call and see what kind of rate he could get on a balance transfer and they gave him a 5.9 percent rate until January of next year. I then explained to him that his previous balance will sit and accrue interest (that rate is 12.9 percent) until the transferred balance is paid off so he still needs to pay it off quickly and then throw everything he can at the previous balance, but it's still a better deal for him than the Dell account.

a letter and tell them I'll NEVER buy another one of their computers and WHY I'll never buy another one.

I had emergency surgery last year and was laid up for months...was late making a couple of payments. Not only was I charged late fees, but someone with a strange accent called me demanding payment. I asked her where she was located. India. India? Oh, so now Dell is outsourcing their personnel?

They wanted me to give them my checking account information... Oh yes, I'm going to give my personal checking account information to someone in India! I received daily phone calls until my check hit their office.

I'll never buy another computer from Dell.

within 30 days i'll be free from them forever, and they will never get another dime from me

Unfortunately I owe $2000 and have given myself a year to get out of their clutches. Was it painful for you, did you give up anything to pay the f**kers back?

www.cafepress.com/showtheworld

and i cut back on some monthly luxuries (cable, cell phone, PS2 games, and some others)...nothing i couldn't live without...

but i just decided to really accelerate my payment plan...(about 14 months ago, i had about $6000 is CC debt...now it's $270 come april 1).

what helped was paying the bill online...I stopped trying to hold back $$$ to send them a big payment each month; since I was getting a weekly paycheck, each friday night when i did my budget the FIRST thing i would do was make a weekly payment online each week---I would figure out the MAXIMUM i could use to pay off the debt and still live....not always fun, but paying off a cc at 20 percent ASAP is it's own reward, and frees up your money for other things (in my case, student loans...yeck)...

Some will suggest transferring to zero percent interest promotional cards...a good idea, but don't overuse it by trying to transfer balances every couple of weeks (and make sure you read the fine print on those promotions). If your interest rate is sky high (20+ percent)and the card is in good standing, you can also call them to request a lower interest rate (they usually give it).

just don't wait for the monthly statement to come in the mail each month to make a payment--that is exactly what the CC companies want...if you pay online weekly, or biweekly, or whenever you have some spare $$$$ after expenses, you would be shocked at how fast the balance can melt away...good luck

but my sense is that the majority of Americans with excessive debt like that, probably had health care costs that made it possible. it'd be nice if we could turn this into a debate about healthcare.

combined with youthful stupidity which i am still paying the price for 4 years later...

it is VERY easy for people that are not shrewd with their money (especially the younger set) to get suckered in, since the CC companies dole out $10 grand credit lines like they were breath mints....many people don't realize what goes into paying off a big balance, especially once that zero percent promotion ends, and even worse if you ever incur late fees or overcharges.

and true to their nature, they make it VERY hard to climb your way out--the methods i've been talking about in post# 32 have been slowed because MBNA only allows 4(!) online payments per billing cycle.

just like student loans, before you know it, they have got you for life (or at least the majority of your prime earning years)!! In essence, you end up working 9 to 5 for them, and the money you earn is theirs, not yours, since you're so far in debt that they already own a chunk of your paycheck (after taxes, of course). These people want indentured servants that mindlessly live and consume beyond their means, and end up worth more dead than alive.

if anyone else was doing this, and if the CC companies haven't made so many billions and owned so many senators, these 'business practices' would be called what they are: Predatory Lending, and they would be dealt with accordingly.

"just like student loans, before you know it, they have got you for life (or at least the majority of your prime earning years)!! In essence, you end up working 9 to 5 for them, and the money you earn is theirs, not yours, since you're so far in debt that they already own a chunk of your paycheck (after taxes, of course). These people want indentured servants that mindlessly live and consume beyond their means, and end up worth more dead than alive."

Debt peonage. Serfs to the owning class.

I used my recent tax return to pay off 98% of what I owed those criminals.

Woot

Hardly a day goes by that I don't get a credit card solicitation in the mail, probably like most of you. I always just throw them out, but I do look at them to see what usury they're practicing.

One of the recent wrinkles in these agreements is that if you're late on a payment, they increase your interest rate to something like 35% or 40%. In fact, I think one of my own credit cards sent me a "change of terms" in the mail not too long ago with this clause. Thankfully, I never carry a balance on my cards.

This sounds like the banks are trying to nudge some of their customers into arrears so they can increase their interest rate to a predatory (or outright criminal in the good old days of usury laws) rate of interest, which the victim (cardholder) can't escape thanks to the new law the banks paid for.

and SHRED THEM GOOD

They clearly want people on the edge to transfer their balances to other credit cards--ones w/ lower monthly minimums. Think about it. If a consumer is heading toward bankruptcy, the card co's can get its initial outlay back asap.

for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. --That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. --Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government......."

Please, everyone, tear up your credit cards if you have any. Buy as little as possible, preferably from a non-major corporate source, or buy used goods whenever possible. Start now if you haven't already.

We are very, very close to becoming a slave nation.

DU's economic activism forum:

http://www.democraticunderground.com/discuss/duboard.php?az=show_topics&forum=255

any cards, and I never, ever will again. I love tearing up all the pre-approved offers I get each week and sending them back with a note telling them to fuck off because they're never getting me under their economic slavery thumb ever again.

When I lost a job five years ago, I only had two card that had only about $400-500 balance each. By the time I was able to pay anything on them again, several months later, the balance on each was over two THOUSAND dollars due to all of their fucking late fees, penalties, charges, etc., etc., etc. I got a small inheritance and managed to pay them both off and will NEVER have cards again. The cc banks/companies can all go fuck themselves from here to hell and back.

And they actually consider people who pay the full balance on time each month to be deadbeats, can you believe that? They make money off of interest, so it actually costs them money when you pay the full balance on time, despite all of their whining about how much it costs them when we don't pay on time. Economic fascists is what they are.

I have a couple of cards with no balance for emergency use. One recently increased my interest rate from 12% to 16% and the other one from 12% to 13%. I assume my credit worthiness has deteriorated because of my deadbeatedness. :-)

I don't take much comfort in the fact that I have no credit card debt, this is disastrous for so many people I know who are barely making ends meet. :mad:

for homeowners there are now? They intend to make the middle class indentured servants via the ol home equity loan bit.

The ultra rich are vampires and will not be satisfied until every thing anyone else owns is theirs. Am expecting the laws denying the sale of human organs will be changed pretty damned soon too. People will be made that desperate.

it still has to make it through the house, right?

Whenever you receive a solicitation from a CC company that contains an envelope with pre-paid postage, and drop a note inside that says "FUCK OFF" or something like that, and mail it to them. :+

great idea, siliconefreak. i'm onboard with that. i wish we could all stop being consumers and start being citizens.

Make them pay even more.

I am not sure but I think all the envelopes are bar-coded with information that can be tracked back to the sender? Not sure though?

Don

I WANT them to know who's sending them sticks and stones.

people with a lot of credit card will be driven into non-bankruptcy banklruptcy sooner.

Here we go, next up debtors prison.

How many people are living on credit because they simply cannot
make it?

a few year ago, I was reading veja, which is a Brazilian magazine (combination of newsweek and people) and there was an ad for a visa card...at the bottom of the ad, the introductory interest rate was something like 27.99 percent!! i wonder how many people would jump at the chance to join with THAT rate...ironically, i never understood why companies offer rates next to nothing to new customers, and jack up the rates for the loyal, established customers...shouldn't that be the other way around?

Very nice of them, do not use their cards.

:kick:

In the long run, it will force people to have less revolving credit. As a matter fact, I believe I saw a Frontline where consumer groups were advocating for a higher monthly payment for this same reason.

We have the new bankruptcy laws, which will ruin many.

We now have credit card companies forcing customers to pay back hundreds of dollars more each month.

We have interest rates rising, which will affect those low-interest ARMs that so many took out at 4.5 percent.

We've got gas prices inching toward record levels.

The dollar is in trouble.

The BushCo budget will obliterate the safety net for many of America's poor and disadvantaged. So, those who will suffer--due to all of the above mentioned--will have nowhere to turn.

What if you want to better yourself? Sorry. Job training programs are being cut. The Perkins Loan program is being nixed completely and Pell Grant amounts are decreasing.

Frightening...truly frightening.

<nt>

we've already been sold down the river:-(

bank cancelled my sister-in-law's card for her due dilligence!

the payback amounts for higher rates.
2%/month means that if interest rates (plus the addition of fees) go over 24%, loans go into negative amortization. (the interest piles on faster than it's paid)
Are there any limits on credit card interest?

in practice this usually means delaware or south dakota.

i don't know for sure, but my guess would be 36% apr as a maximum legal interest rate.

I guesss when you have all of the Republicans AND the supposed leader of the Democratic opposition- Herry Reid in your pocket, there's not much incentive to act reasonably or responsibly!

Now, whenever a new law goes affects corporate interests, it usually takes a good long while before it's binding. Sometimes years.

Wonder how long consumers will get before bankruptcy changes take effect?

i just got a credit card for 0% through june 2006! i mean, free money, right? well if my minimum payment is 4%, then i'll have paid back nearly half of it by then, so it's not as much of a deal as i thought it was (still free money, just not as much of it, or at least, for not as long).

the money the collect via these increases will get lent out again, but at higher rates because the fed rate hike cycle means prime rate and then credit card rates go up, nearly in lockstep. so they're maximizing their money lent at the newest, highest rates by doing this.

in short, they make it harder to simply carry a balance at a lower rate.

...or are existing customers (with balances) also required to pay these new, higher monthly payments???

As I understand it--this would affect existing accounts and new accounts.

My husband is insisting that they can't do this, and no way could they change the rules for existing accounts.

I'm too tired to argue.

Can someone clarify?

I am not sure myself.

Don

the cc companies send you an insert telling you of the change. the change doesn't affect your past charges, but if you make any new ones, they are under the new rules. so, if you tear up the card now, you will still be under the old rules.

So many people today absolutely rely on credit to live from paycheck to paycheck that any move to increase monthly payments will not only stress them finacially, it will force them to spend less.

And what happens when they spend less? Ever hear of Consumer Confidence? Consumer spending? If consumer spending drops the entire economy will collapse. We have made the fatal error of pegging the entire economic health of the nation on consumer credit. It WILL come back to bite us in the ass.

TwoSparkles, you are absolutely right about the "perfect economic storm". I can't think of any way it could be worse if it was done intentionally. I don't believe it was intentional. It all revolves around greed. Each special interest wants everything it can get. And it all adds up.

I can remember when the marginal tax rate was 90% and I know quite a few people who made millions at that rate. Now we pay the lowest rate in the industrial world, and our intelligent citizens want it lower.

Maybe we deserve what's coming?

Now here's a question for you:

At what point will all those who will be in such economic pain turn things around on the predatory credit companies, and become the predators themseles? After all, corporations are nothing but people, and while you can't seek revenge on a corporation, you certainly can seek revenge on the people running it. Will it happen? Ask Marie Antoinette.

minimum payments. I read the article. It sounds as though it applies to current accounts, not just new accounts.

I know someone in the position of struggling so badly to meet his minimum payments that he recently accepted one of those CC offers through the mail. He used the new credit (all of it) to pay another credit card bill (one month's amount due). I thought that was bad enough. This will be an absolute disaster for him.

I hope everyone reads this thread.

Consumers have little hope of repaying a large credit card bill by paying the minimum. That's how they end up in bankruptcy court: charging a lot, then paying the minimum, not realizing how the interest will accumulate. This way, consumers will have to pay a larger portion of what they have bought, and this should keep the balances down (and the interest).

Because my payment just doubled ....
Going to sell my Jeep and use the
money to pay off my credit cards ...
Than I'll be debt free ...
Fuck 'em all ...

and it's all because of the bankruptcy change....we are FUCKED.

:eyes:

This is a very dire forecast for the future.
Vast numbers of people are going to be
absolutely destroyed by this turn of events.
Homelessness and crime are going to
sky rocket and there will be people driven to
acts of desperation in their struggle to survive.
I think it is time to learn how to use a gun.
Never thought I'd say that, but the most dangerous
society to live in is the society whose members
have nothing left to lose.
When the Trilateral Commission pointed out the
the standard of living for American's would have to decline
in order to balance the global new world order, this is
exactly what they intended.
America is about to have a very rude wake-up call.
BHN

Will the desperate ones turn on their fellow citizens like rabble, or will they seek revenge on those responsible for this economic meltdown?

I'm not very optimistic because I don't believe that most americans have the capacity to think rationally anymore. With our fascist media they have not even been told who to blame.

Are you kidding- the "libruls" are clearly to blame
for their misfortune.
Of COURSE they will turn on their fellow citizens.
I am signing up for a class at the local firing range THIS WEEK.
BHN

Good Gawd!!!

Fee revenue generates a lot of money for banks these days, and increasing the minimum payment seems like a way for them to pick up more of these fees. They'll probably generate more fees for NSF checks and late payments by raising the minimum payment.

people into bankruptcy and serfdom for
the rest of their miserable lives.
It's going to get ugly real fast.
BHN

how the hell can they afford to pay $360??? :wtf:

late. But watch out, this could really throw the economy for a loop and rather quickly!