posted on Dec, 26 2007 @ 12:40 AM
reply to post by manta
It is also disclosed here in the US. In fact, the law requires the penalty interest rates to be printed in huge print on the credit card application.
The huge print also tells you what the penalty fees are if you miss a payment or otherwise do not follow the terms of the loan.
Heres just one example that I randomly found, but all credit card terms and conditions include a huge table
outlining all fees and interest.
This is required, by law. I have about $100,000 in available credit that I do not need and will not be charging up because I read the disclosures - I
know how much interest I would be paying - and I don't want to pay it. In my opinion the smart thing to do is use credit cards and pay them off every
month - use credit card rewards to rack up free points for free stuff. If you just buy what you would normally buy anyways, its a good method to give
yourself a few hundred dollars worth of free stuff every year (or more, depending on your spending level).
Finally, I think the OP article could be a classical example of playing with statistics. So 90+ days late have increased by 50% - but what amount did
it increase from? I notice they don't quote that in the article - possibly because the actual number is very small compared to total outstanding
debt, but saying that it increased by 50% is much more sensational. Also, the article only analyzes credit card trusts which sells debt to investors -
which only makes up 45% of total outstanding debt. In general, banks tend to sell loan portfolios when their models indicate that a default is more
probable - otherwise, they make more money holding the debt themselves. It is unsurprising then that such a portion of the debt would actually be
[edit on 26-12-2007 by LightinDarkness]