Apc, there are two sides to every coin.

Debtors should have been responsible when taking out all that debt. On the other hand, The idea that creditors had the right to set interest rates whatever they feel like after the original loan has begun to be paid, is a new one in American banking. It used to be illegal to change the rate on a loan without the other party's consent. federal law forbade this, as did most states until the early 70's. Even then, most states had a limit to how much the rate could be changed from the original rate.

There was a time when any interest rate over 12% was considered usury, and the loan was legally forfeit (repealed in Texas in 1978). That's why loan sharks had to break legs to enforce their loans in the old days.

But thanks to bribes and kickbacks to the House and Senate Banking committees, that's all a thing of the past.

The latest wrinkle is that creditors can change your interest rate based on your credit rating. In other words, if you miss a payment to one creditor, once, the rest of them can raise your rate even though your are not late with "their" payment.

Citibank came up with this, because they noticed that debtors wobble before they fall down, and they try to collect as much as possible before you collapse. All the other banks followed suit, and I've heard that GM does it too now---if you are late with your credit cards, they will jack up your car payments to extract maximum dollars before they repossess.

The trouble is, the banks have the best lawyers in America on their side, and years of special interest legislation in place. The average consumer doesn't stand a chance when they borrow money.


One of my dreams is, when/if my personal wealth ever passes 10 million, is to open a personal, non-profit, bank and insurance business. I'd give out home loans and credit-payoff loans at 7%, and also offer gold-backed "investment notes."

I'd also offer non-profit car insurance, with no advertizing; just word of mouth.

.

Originally posted by GUICE2
And what exactly do you think the commercial banks do?
They lend money they do not have and then are allowed to create 10% more to do whatever they want with them

I just don't see what's hard to understand about the idea that a bank is a business. They provide a service, and instead of keeping my cash in a stocking, I withdraw my money from an ATM in Bangkok or Paris and can take an auto loan when my car breaks down. It all works. If you don't like the idea, don't go to the bank at all.

they had no funds to lend in the first place and use unethical and fraudulent accounting practices to create money...

That's a libel. If you can't read your contractual obligations, whose fault is that? If you think they violated the contract, take them to court. End of story.

also just becaue the terms and conditions exist doesnt mean that the creditor has accomplished the necessary means of full disclosure.

That's one baseless statement. If you go into a contract, the onus is on you to read it.

They make it fine print for a reason because they know people will miss the important information and they take advantage of those less knowledgable.

And if the print is large, they's have to send you a book instead of two pages, and you'd probably find the book too thick to bother to read.

You bought a car on a variable interest loan? Now who's fault is that? Next time, try buying the car instead of borrowing it.

If you call your lender and ask for a better interest rate, they are more than likely to grant it. If not, call back to get a different operator, and threaten to move the balance to a different lender if they don't drop the rate. If they still refuse, move the balance to a different lender.

Any talk about where the money came from is irrelevant. You borrowed it on their terms, you are obligated to pay it back on their terms.

Oops
I made the whole thing a quote.....my bad.
The first part is my response to the second part which was the text that i should have quoted.

I know full well what the Federal Reserve is doing. How does that force you to agree to a contract without understanding it? It doesn't. It is therefore irrelevant.

Originally posted by GUICE2
We sign, we dont read the entire aggreement because either we dont thin kit matters or we just dont know any better.....does that mean i am to be punished for the rest of my life with high interest?

Yes. But I would hope you don't make that choice, for it is entirely yours to make.

To add to my comments before, when I called to try and get my interest rate down, they did offer to up my credit limit another $2,500.00! Apparently my credit rating is lousy enough not have them lower the interest rate, but good enough to have me borrow more money. I'm glad I cancelled it.

I'll look into Chase & Citi to see if I can get the balance transferred to a lower rate.

I did talk to my accountant about filing bankruptcy. I was relieved when he said I couldn't because my assets out weight my debt. So for the time being I pray to be very busy with work, to have my clients pay me in a timely fashion and to keep plugging away at the bills.

For anyone here at ATS who cannot pay their credit cards,
or know someone- a friend, family member or loved one
who is on hard times and is looking at possible bankruptcy...

SOME ADVICE:

If you are gnerally short on cash... pay your basic bills
(like telephone and heating and daycare and car payments and
insurance and things like that)
and STOP paying your credit cards altogether...

Remember to pay your mortgage, though...

Anyway- do not pay any credit card minimum payments
for about 6 months... you will be called 92 times a day,
but use Caller ID and/or turn the ringer off.

If you bounce back and get a new job, resume payments
and work out a plan to repay the back payments... ask for
the penalties to be removed, and ask for a reduction in interest rates-
they will actually do it- some of them at least.

IF YOU STILL CANNOT PAY AFTER 6 MONTHS
and you are desperate and considering bankruptcy
(which is a valid- but last- option)
then do this:

Call all of them up (scary to do, but you can do it!)
and offer each company.... ready?

Offer them all 15% of the debt- with ZERO interest.

Pay them this over 6 months to a year.

MOST of them will accept this-
if you do it BEFORE they sell your debt to a collection agency.

SOME of you have a moral indignation about people and debt...
well, I do not... people generally want to pay debt back, but stuff happens.

I AM NOT a financial advisor- I am a filmmaker- so do not take my advice
as professional, er, advice...

I am just relating a true story of what happened to a close friend...

They ALL took 15%...

He reduced a $130,000 debt to around $19,000 payable over 6-12 months.

Just trying to help.

Oh yeah- and as far as guilt- if you were paying back a friend or family member 15% of a loan... that would not be cool.

But these large companies manke BILLIONS off the USURY interest they charge of 20 to 30 and EVEN 40%.

So, from point of view... well, these companies are nothing more than INCORPORATED loan sharks who ruin credit and harrass you on the phone instead of breaking your legs.


Good luck, and DO NOT WORRRY about your debt--- have a nice holiday and forget about it until January 2nd!


T.............................................

these are the same people who own america, who have other persoanl companies that they pay lobbists to go and sway a certain law or bill or even add something to help that greedy lil ceo of such aN suck,

wake up and smell the forthcomming crisis. A depression that will make being Poor a Luxury.