A new law was passed, and now credit card companies are going to be charging a minimum of 4% of your balance as the minimum payment due. This was inacted to help people actually pay off there credit card bills, instead of barley paying off interest.

That's great in theory; but if you already were paying more than the minimum; but not 4%, then this new law is really going to suck! I've already seen my new bills for January and lets just say paying those bills is going to make life very interesting. This new law may have had good intentions; but it's not going to help those already in debt.

This law should only apply to new accounts, not old ones.

I stand by what I said. Yeah, Chase can "legaly" charge me ridiculous amounts over and over and over for a mistake that was made months ago, but it is "not" ethically right. Just because something is legal, doesn't make it ethical. It's called theft. And is most certainly a punishment far in excess of the harm I caused the company.

Let me give you an example. Your kid gets in trouble for cheating in school. Ok, you ground him. Ok, now his time is up and he has changed his ways and no longer is cheating in school anymore. But you want to make sure your kid "learns" his lesson even though he has allready changed his ways and you keep grounding your kid over and over and over. Is this fair to your kid?

To the person here who told me to "be responsible," "read the agreement" or something like that. You think it's right, good, then take my $1200 minimum and you pay it and get nothing in return, except an overpriced way to help improve your credit.

This economy is based on trade, ideally, fair trade. I give you $100 then I get $100 worth in services and/or merchandise. I have never gone to the store and paid $100 for a pack of chewing gum.

All I'm saying is that there has to be a point where a credit company steps in and says, "You know Jim is paying a consistent and fair payment, lets work with him so he can pay his bill down." Agreements should not be used in a way that excessively punishes the customer, i.e. "It says here we have the right to charge you......"

I spoke the other day with my bank, where I have a checking account, about Chase. The lady I was speaking to knows about Chase and how they will not budge and keep sticking you and sticking you with charges. She agreed that this was not fair. This comes from another bank! And I have had other creditors that have worked with me to get my bill paid down.

Troy

It may not be ethical, in fact I think it is quite unethical, capitalists--by definition-- will exploit anything they can within the realm of the law in order to obtain profit. If you don't think the consequences in the contract you signed are ethical then why did you sign the contract?

Originally posted by dollmonster

Owing several thousand dollars to five separate credit cards, my New Years resolution is to turn over my debt to a nonprofit credit consolidator.

I dont understand legalaties of most thing like this,i would like to offer my oppinion on credit cards tho.

As like anyone, i`ve seen personally and heard of people being finacially crippled by credit cards.Firstly if you have a debt with them do what ever legally possible to clear that debt,cut up the card and if you want to buy something in the future simply save for it.

Personally i refuse to live in debt,and without going into my details do quite well,the bank i make pay me not the other way around.

Don`t stamp your feet because of something you allowed to happen.

Get in front of the eight ball first.

Hey man, I've been there. Heavily in debt and with credit cards and a few other bills that went unpaid. Eventually I paid them off and I've been credit card-free for almost 4 years.

So I feel for you. Your post, it sounds like you feel like there is no hope of ever paying off the card you have. It may seem unfair. However, you have to take full responsibility for getting yourself in your situation. When you signed up for the Chase card, you agreed to the bank's terms of service. The penalties for non/late payment are harsh for a reason - for Chase to profit from a card user's own inability to pay or lack of financial self-discipline. You must admit that yes, according to the legally binding credit card agreement you signed, you do owe Chase for every late fee and additional interest.

How can you overcome your current situation? Hopefully you have family or friends who would either be willing to help you raise the money to pay off the Chase card in full ASAP. And you will at least be able to pay your helpers out interest-free. Or you could sell as many non-essential possessions you have, whatever those might be (TV, electronics, etc.) This is painful to do but ultimately less painful than spiraling into further debt.

If you'd like to learn how to get out of and stay out of debt, I recommend getting Dave Ramsey's Financial Peace Planner. He also has a nationally syndicated radio show. Perhaps call-in and ask his advice.

Best of luck.

I used to work for a credit card company and I have worked inside a branch as a teller as well.

I dont remember the ins and outs like I used to but here it goes;

A credit card isnt secured by much. Simply put, its secured by your credit. Its secured by your signature. Since they cant repo those things, all they can really do is blow your phone up and send you letters that they hope make you shake in your boots.

They *WILL* blow up your phone. They will use skip trace tactics if they want to get a hold of you bad enough.

Pay something each month. Anything. It shows effort on your part. Not much effort but it shows effort all the same.

Dont try to be cute and send a penny a month. They notice pranksters.

There are afew things they can do to you.

They can sue you. Not likely but it depends on the amount of the debt and how it hit the account.

If you have a zero balance and then you max it out in 30 days time, and you blow off the payments.......thats called fraud. You, the cardholder, performed the transaction but it appears strongly that your intent was to commit fraud. See you in court; have fun.

Lets say you assumed the debt over a period of time and all of the sudden crapped out on the payments. Instead of meeting the minimum of $900, you are making a good faith effort of $100.

They can report your account status to the credit agencies. That will effort your ability to finance a car or house. Unless you do it through your spouse. So it may or may not effect you.

In time (years), the debt will be written off and eater, it will fall off your credit history.

Make contact with the agency, give them a sob story, and see what they will do for you.

You should run your options by a lawyer.

Here is some advice though. If the account gets shut down, the credit history becomes frozen. Thats bad. Once you pay it off, leave it open. That allows the negative history to fall off, month by month.

FYI, I did *NOT* work in credit, disputes, or collections. But it gives you something to build on.

I have no clue what your annual salary is but if its under $25,000, increasing it by changing jobs is an option.

It takes time and effort but I did it and you can to.

Some advice on dealing with debt consolidation companies and credit card companies.........some smuck calls you on the phone. He says he is with the credit card company. How do you know. If you arent the one creating the contact, tell them you will call them back.

They will give you a number and they may have you repeat it to see if you really wrote it down. Entertain the guy but when you do call back, call the number on the back of your credit card.

Do you see the number to a debt consolidation company on the back of your credit card? No? Then why would you give them all of your personal information. Deal with the company that has your account. Dont let debt "helpers" make a fortune off of you.

Another thing.

You may feel desperate with your finances. You may see some info-mercial at 2:30am about how to go from rags to riches with their free product.

Turn the TV off and go back to sleep.

They will upsell your desperate rear end and in the end, you'll be worse then worse.

But thats a whole new thread.

Your already in debt and now your going to "use other people's money" to go from rags to riches? Dont kid yourself. If it were that easy, EVERYBODY would be doing it already and your broke self would be the last one to the party.

When your ready, call your credit card companies. Give them your boo-hoo story. But listen, dont answer questions they dont ask. Be friendly but dry as the desert. Dont volunteer ANY information, no matter how much they seem to care.

They dont care. You are just another tick on their tally sheet. In five minutes, they wont care about you anymore. They will go on break and laugh about you. They will share your account number with their coworkers so others can see it and understand the laugh even more.

Round and round your account number goes. Protect that account information as much as you can. Dont be volunteering it to 3rd party angencies unless you have to.

Hope this helps a bit.

Good luck.

They are not your friend and they really dont care. Do what you have to do to survive.

And preach to kids over and over and over in hopes they will listen.

EDIT-ADD ON:
If you cant pay 10% of your balance, put the charge off. Dont charge it.
Keep the card with the highest credit line empty. That way, you can call them and say "What do you have for balance transfer rates?" and you can move alot of it over at a decent rate. If time runs out, you move it to another card but you need one freed up to pull that off and if you dont have self control of your plastic, it wont work.

[edit on 12/30/2005 by Genfinity]

Here is a way to help you get out of debt. I learned this from a friend of mine who sold a financial discipline service and it can get you out of debt a lot sooner than you are supposed to be out of debt. And.. If you have the discipline to do it yourself you can avoid the fee that they charge you to set it up.

First lets start with some examples:

1. Car Loan, lets just say 400 a month at 5% interest for 5 years.
2. Student loan, Lets say 150 a month at 7.5% interest for 10 years.
3. Credit card debt, Lets say 100 a month at 20% interest for variable time.
4. Home loan, Lets say 1500 a month at 6% interest for 30 years.


Ok.. So the car loan has the least amount of time on it but it is at a low rate of interest so it will be the first to be paid off. although the credit card has the highest interest level, so you want to try to pay that off first.
If possible try to get a loan from your bank at a lower interest level to pay off the amount of the credit cards. (second mortgage, Personal loan, etc.)
You will still owe the money but it will at least be at a lower interest rate.

Ok so step 1. Take the payment that has the lowest amount of time on it, in this case it is the car loan at 400 a month, When it is paid off, take the 400 a month you were paying to the car and apply it to the next loan in line.
In this case it would be the student loan at 150 a month, But instead of paying 150 a month you are now feeding 550 a month toward that loan and accelerating the payoff date on it. (See where I'm going with this?)

Ok so now the car and the student loan are paid off freeing up 550 a month to apply to the next debt in line, in this case it would be the credit card at 100 a month so instead of paying the 100 a month, you would be paying 650 a month and accelerating that debt's payoff date.

Now when that one is paid off we go on to the home loan at 1500 a month but instead of paying 1500 a month you will add another 650 a month to that and pay 2150 a month and accelerate that debt's payoff date.

In the long run you will save many thousands of dollars in interest and you will be out of debt in about half of the time (or less) that you were supposed to be in debt for. All it takes is discipline to do it. I am personally doing this on my own and I will be free and clear of all of my debt (2 cars, student loan and a home) in about 14 years instead of 30. Also I will end up saving over 100,000 dollars in interest money over the life of the debt. (30 years)

You don't need a financial planner to tell you this, or a credit counseling service. It's simple. All you need is the discipline to stick to the program I have explained here and you will be thousands of dollars ahead in the future.

Debt sucks! I've been there. But this can help you and many others get out of it. the least I can do is explain it to you and help you get out!

Also.. This is the bonus part...

Once you are out of debt...

You now have 2150 a month IN YOUR POCKET! to do with as you please.. Reinvest it.. get back some of that interest that you paid! Build cash reserves for the future! Enjoy that cash! You have earned it! Let it earn for you!

I hope this helps. It takes some time to see big results but you will see them once the first debt in line is paid off. The rest will fall off rather quickly once you have started.

Originally posted by ufia
I pay the complete bill next month. As a matter of fact, the bank hates me for this, because banks don't make any money with good payers. They even lose money on me, by printing the bill on paper and paying for snail mailing it to me, then they see no return of investment.

This is a common misconception. The credit card companies still love you, and make money off of you, because the merchant pays a processing fee of anywhere from 2%-6% of the total transaction including tax. It costs the credit card company nowhere near that much to process the transaction.

Originally posted by cybertroy
Let me give you an example. Your kid gets in trouble for cheating in school. Ok, you ground him. Ok, now his time is up and he has changed his ways and no longer is cheating in school anymore. But you want to make sure your kid "learns" his lesson even though he has allready changed his ways and you keep grounding your kid over and over and over. Is this fair to your kid?

It depends on whether or not your kid knew about these tough rules ahead of time. If he was already aware of these penalties and made a concious decision to cheat then yes it is fair.

This is actually a poor exmple, because it would seem like the kid does not have a choice ahead of time to enter into this agreement, most likely it would be pushed upon him by his parents. You chose freely to enter into this agreement and still broke the rules knowing the consequences.

Originally posted by cybertroy

To the person here who told me to "be responsible," "read the agreement" or something like that. You think it's right, good, then take my $1200 minimum and you pay it and get nothing in return, except an overpriced way to help improve your credit. Troy

Why should I pay for your mistake? I don't enter into agreements that I think are unfair or that I cannot fulfill. If a stiuation arises that forces me to be unable to fulfill my obligation then I don't complain about it, because I knew what I was getting into ahead of time.

Bottom line: Read all contracts before you sign them. If you think the contract is unfair for any reason then don't enter into it!

I just wanted to add that you shoul dnot cancel your credit card if you still have a balance. cut it up yes, but do not cancel. If you cancel the account i believe the interest rate on the contract is thown out the window and they can charge the maximum allowed by state or federal regualtions.

In regards to debt consolidaters, you can call and drop the interest rate on your loans and haggle the pay off. remeber you have one tool in this fraudulent world. ask them to prove those charges. to show you copies of reciepts. this has worked in the past. but basically the consolidation companies just lower your interest and such. I feel much better watching over my finances personally. after all they are my responsibility.

another thing about debt consolidators, is they have many other tactics to make money off you. even the ones that are non-profit. my cousin just got jipped by this one. he called up, got all his bill consolidated, made a nice big payment to get a head start and guess what..... that nice large payment was considered a "donation".

hope that helps.

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