'Fee-harvesting' credit cards target cash-poor consumers

Now today, we see people putting their groceries and the heat bill on a credit card hoping and praying that something will change so that they will eventually be able to pay off the mounting debt against them.

The same people who refuse to make adjustments to their lifestyle, they just maintain it with credit instead. They may be putting groceries on their cards but you can bet they still have their cable tv, cell phones, vehicles and homes. All luxuries. Sell your car that is eating up $250/mo plus insurance and take public transportation.

Your not going to educate me on how these people work, I am a bill collector by trade, I deal with thousands of individuals. I understand circumstances happen. Death, Disease, Divorce. Most of it is belligerent spending, I have the monthly statements. I deal with the people we are reffering to in this thread on a daily basis. 95% of the time it is careless spending. The other 5% consists of actual hardships.

If your putting your heat bill on your credit card that should be a red flag, sell your house you cant afford it. Buy something cheaper and smaller or rent.

[edit on 29-3-2008 by BluByWho]

reply to post by Johnmike

Maybe a bad purchase, but nothing impulsive.

Okay then, even you yourself have fallen for marketing. I hope it ruined your life and that you accept that.

That's where the cornerstone of good parenting comes in: "No."

So you never went out and tried to get your hands on a Furby or an Elmo?

Not that that has anything to do with something huge like paying for college.

In this particular video, it was only a $500 line of credit, and it was only about a $300 tuition payment if I remember correctly.

If I were to loan money to someone under the terms and conditions that the banks use, I would be called a loan shark and a criminal.

It has nothing to do with perfection. Banks charge these huge fees because by extending credit, the temporary use of their money, to these people who have shown financial irresponsibility, they're taking a huge risk.

A risk they would not be taking if it were not hugely profitable for them.

1) Completely refuse credit to people without a good credit score, potentially killing their chances of recovering their credit in the process.

This is exactly what they should be doing. Refusing credit to people who do not have the means to fulfill the terms that they so cleverly hide.

There are other ways to restore one's credit.

reply to post by BluByWho

The same people who refuse to make adjustments to their lifestyle...

This I cannot argue with. But therein lay another problem. The state of the economy has become such that very few people are able to maintain their lifestyle any longer, and that is a problem that goes far beyond personal choices. The American dream is marching on right past the American people.

If your putting your heat bill on your credit card that should be a red flag, sell your house you cant afford it. Buy something cheaper and smaller or rent.

Why would someone sell their house then pay more to rent?

I personally had the cheapest apartment in the area, because I knew someone, and still found myself putting heating oil on the credit card, despite the fact that I worked 60 hours a week, did not have a home phone, cable television, or a car payment. Furthermore, my thermostat never went above 50 degrees.

Originally posted by jackinthebox
I find it hard to believe that never once in your life you made an unsound financial decision, or irrational purchase.

Everyone does that. Some are too ego-centric to admit it. These are the people you have posting in your thread, which is a shame.

Yes, the idea of credit in general is a sham. And yes, bankers and bank-lovers (ahem) will always find a way to excuse the credit game. They rely heavily on guidelines and rulebooks that are written BY the banking industry - to explain why the banking industry can legally bait and hook us into a credit hole.

They are no different then the pro-government poster who excuses the government for spying on your personal phone calls or screwing you over in other ways - 'Well, the government does that for your own good. It has to.'

They are lapdogs.
On the other hand, people who are not lapdogs by nature will always be confused and outraged at the existence of such schemes. It is our duty to avoid such games. We are never going to convince other lapdogs that master is lying to them. You know?

We start out with no credit....so we all start out a risk. Thats real fair.

Ok fine I borrowed 105k for my meager house but by the time I pay it back it will be almost 400k. Yeah thats fair.

I owe $7500 on my Jeep I want that 105k loan for my house so they say pay it down to 10 mos. I take 4500 and make a payment. The very next month I'm a little strapped because I'm living in a hotel room because Bank A wont close my home loan until the end of the month (common practice I wasnt told about until after) so now Bank B is calling me severly harrassing me telling me I'm late on my loan and I need to pay up. I point out I just paid them $4500 and I'm told it doesnt matter your late now "PAY UP". Yeah thats fair

Like I said the whole freaking system is a joke.

Originally posted by ATruGod
Ok fine I borrowed 105k for my meager house but by the time I pay it back it will be almost 400k. Yeah thats fair.

Like I said the whole freaking system is a joke.

Seriously. There are plenty of people lucky enough (or wealthy enough) to not go through such situations. They are the types who will always and forever defend the Bank - even when it is loansharking us to death.

In thee have they taken gifts to shed blood; thou hast taken interest and increase, and thou hast greedily gained of thy neighbours by oppression, and hast forgotten Me, saith the Lord GOD. (Ezekiel 22:12)

And for practicing usury, which was forbidden, and for consuming the people's money illicitly. We have prepared for the disbelievers among them painful retribution. (Al-Nisa 4:161)

Originally posted by jackinthebox
This is exactly what they should be doing. Refusing credit to people who do not have the means to fulfill the terms that they so cleverly hide.

Ah, so now we see where you stand! You believe that the banks should tell us whether or not we can "afford" a loan! You want to destroy the ability to give out credit to the poor for their ability to advance themselves? It always seemed like you disbelieved in personal freedom and responsibility, but I never would have guessed that you believed in keeping the poor down regardless of ability.

Originally posted by jackinthebox
On a personal note, I had to bankrupt tens of thaousands of dollars in credit card debt, long after the principal had been paid.

Hello Jack...the more I read your posts and the more I get to know about you via ATS i begin to understand where you are coming from. I have credit cards that charge fees for almost everything. Service fees Huge cash withdrawl % fees, annual fees, pay by phone charges. I think the reason that they can get away with it is because they are catering to those of us with less than "perfect" credit. Having a less than "perfect" credit score is a condition that many of us are in, and the credit companies charge so many fees so they can cover their asses if we default (which so many people do) so is this a travesty of justice or just a case of indemnity on their part? i think the answer is both. If i had a perfect credit score I could get a credit card with a much lower % rate no annual fee and no service charge fees no annual fees, is this fair?

reply to post by Johnmike

You believe that the banks should tell us whether or not we can "afford" a loan!

They already know full well wether or not a person can afford a loan, probably better than many people who apply for credit. Especially when we are talking about teens who are on their own and away from home from the first time. Perhaps their parnets might have had the time to teach their children about these pitfalls if they themselves were not working two or three jobs trying to keep up with their own ususry induced debt.

You want to destroy the ability to give out credit to the poor for their ability to advance themselves?

There are other ways of establishing, even re-establishing credit besides these rip-off scheme credit cards with exorbitant fees and rates. Did you know that in my state it is actually illegal to charge more than 16% interest and yet I had a 32% rate on one card? That is to say nothing of the multitude of other fees that are applied to these cards.

It always seemed like you disbelieved in personal freedom and responsibility, but I never would have guessed that you believed in keeping the poor down regardless of ability.

If they are poor, then they do not have the ability to pay back a loan. This has nothing to do with personal freedom or responsibility. This is about predatory lending practices just like any common mafia loan shark. The only difference in this case is that it is made legal through well paid lobbyists. In other words, if you pay off enough people you can make anything legal.

If I were to loan someone money at the rates and terms these banks are offering, I would be sent to prison. So now where is this "freedom" you speak of?

I used to work for a company (it will remain nameless) that rented-to-own appliances and home furnishings to lower-class individuals.

Speaking of rip off... wow. The general rule of thumb in this place is charge 4 times the amount of the product.

So for a 42" LCD TV, for instance, they would be rented for around $50 a week for 104 weeks. Yes, the math on that is $5,200.

They also owned a paycheck advance company - go figure. I'm so glad I got out of there. The company itself was disgusting, and the customers were just about as bad. I almost didn't feel bad ripping some of these people off.

reply to post by Stumpy1


The fees are really what get me steamed. They are the second most devious aspect of all when dealing with these credit cards. The first is that these banks reserve the right to change the terms of the agreement at will. I'm from the old-school. A deal's a deal. You don't go changing the terms after you've made the deal, and you certainly don't include that as a clause in the original deal. Such a clause should be illegal.

The most I would be willing to accept in all of this, are clearly defined terms of interest, even at differing rates, so long as they were within reason. First credit card, fine maybe a ten, or even fifteen percent rate is justified. I know that I first etablished credit through a credit union by using a Visa check card, and then getting an unsecured signature loan for $3000 at a fixed ten percent interest. After that, on was on my way to getting credit cards worth tens of thousands of dollars.

I was smart enough to pay attention the first time one of them decided to change the terms. I had no balance on my Capitol One card, but they decided they would asess a yearly maintenance fee a year or two after I had already gotten the card. The fee would be directly applied to the card, and interest would be asessed until it was paid. At the time, my debt was well managed and I knew I had no balance on my Capitol One card, so I did not bother to open the envelope until after I had returned from vacation. I thought it was just another card offer that I was not interested in, or perhaps some other useless service they're always trying to hook you into. By the time I realized, the fee had already been applied, as well as a late payment fee for not paying on time, despite the fact that it had not even shown up as a balance due on any statement. I was able to argue my way out of paying the few hundred dollars and promptly closed the account.

The question there is though. What do you do if you're away for a few months? Or like my brother, away for a year at a time in Iraq. You come home to find your credit in shambles, all because they decided to change the terms on you, and you were not even carrying any balance!



[edit on 3/30/0808 by jackinthebox]

reply to post by Sublime620

The company itself was disgusting, and the customers were just about as bad.

A viscious cycle there. One thing you don't want is to have a business that goes mucking around in other people's misery.

reply to post by jackinthebox


No doubt. Getting out of that mess and going back to college was the best move I've ever made.

Originally posted by jackinthebox
On a personal note, I had to bankrupt tens of thaousands of dollars in credit card debt, long after the principal had been paid.

Jack did you agree to the terms of those cards ? Were you forced to charge on those cards ? If they change the terms you have the right to close the account. You were informed of what you were getting into from the very beginning.

As I own shares in a few credit card issuing banks I feel that you may have stolen money from me.

.

[edit on 30-3-2008 by RWPBR]

reply to post by RWPBR

Jack did you agree to the terms of those cards ?

No. Not as they were originally explained to me. And certainly not to the new terms applied afterward.

Were you forced to charge on those cards ?

Yes. Forced by the current state of a terminally flawed economic system forced upon the people without their knowlegde or consent.

If they change the terms you have the right to close the account.

Not until the debt is paid, and paid according to the new terms.

You were informed of what you were getting into from the very beginning.

Not true.

As I own shares in a few credit card issuing banks I feel that you may have stolen money from me.

Good. Lay down with the dogs you wake up with the fleas.

reply to post by jackinthebox


Don't worry about that guy, he's clearly a jerk. Probably fed with a silver spoon.

I know first hand how companies can use tricky wording to price gouge and bump the price up. We used to have customers think they were paying a price that was double the retail, until eventually they would notice that after a specified time period it what double again.

It's just crazy wording, fine print, legal jargon, and taking advantage of people in vulnerable states. Then you got guys like the one who responded to you who only care about the 10 shares their grandmother bought for them.