Great credit? Bend over. You're screwed next.

[NickCole]

Nick, here is the newly revised gas price chart:

Exactly!

 

[NickCole]

It's a little scary watching some Obama supporters in this thread insist banks won't make up their profits on customers with good credit, and that those big banks aren't smart enough to figure out how to do it and keep Americans hooked on their credit cards.

Obama really did find himself a good crop of suckers.

Anyway. FYI, this news is coming from the banking industry, and this is already happening. More from the article linked in the OP:

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”

As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.

Great legislation, Democrats.

The legislation scheduled for a Senate vote on Tuesday does not cap interest rates.

Those lobbyists Obama said he was going to get rid of are clearly still in town.

 

[Spensed]

It's a little scary watching some Obama supporters in this thread insist banks won't make up their profits on customers with good credit, and that those big banks aren't smart enough to figure out how to do it and keep Americans hooked on their credit cards.

Obama really did find himself a good crop of suckers.

Except, of course, that no one's saying what your claiming they are.

All that's been put forward is that the credit card companies' threats to penalize their non-debt carrying customers may be just a threat and shouldn't be taken at face value.

What's also being said is that, if the credit card companies carry out their threat, they can be dealt with by further legislation and regulation.

 

[NickCole]

All that's been put forward is that the credit card companies' threats to penalize their non-debt carrying customers may be just a threat and shouldn't be taken at face value.

It's not a threat and they're not doing it to penalize their customers. You don't even understand the nature of the discussion. It's not about punishment, it's about profits.

It's what they're going to do to make up for profits lost because of the new legislation.

Banks are going to try to make up those profits, there's no question about that. There are only so many ways to do that.

What's also being said is that, if the credit card companies carry out their threat, they can be dealt with by further legislation and regulation.

I wish I could believe you forgot to put the sarcasm smilie at the end of that.

The whole credit industry is very precarious right now and they need to make profits. Obama and Congress will not dictate whether or not banks can charge an annual fee or which perks they have to offer CC holders or when they can begin charging interest on balances of customers with good credit history.

I mean, do you guys have any idea what's going on with financial services right now? You know -- the banks Obama's been handing trillions of our tax dollars (debt) to. Geesch!!!!!

 

[naked gent]

^^ Nick can we all assume that you don't believe the CC industry is in need to any additional regulation (even though your candidate for president also ran on regulating the industry) and that you don't see any problem?

Also if thats not the case is there any particular piece of this legislation which you object to?

Or do you prefer to just continue ranting on without delving into specifics?

 

[NickCole]

^^ Nick can we all assume that you don't believe the CC industry is in need to any additional regulation (even though your candidate for president also ran on regulating the industry) and that you don't see any problem?

You'd be wrong to assume that.

Also if thats not the case is there any particular piece of this legislation which you object to?

Or do you prefer to just continue ranting on without delving into specifics?

I've delved into specifics.

AS I'VE SAID, this new legislation does not cap interest rates. I object to that. And it indicates that Obama and Congressional Democrats who wrote this are in cahoots with lobbyists and more interested in getting high marks from supporters than in putting through really good legislation.

The legislation also does not prevent banks from raising rates whenever they want on whomever they want. They can't do it on existing balances but they can on new charges. I object to that. And again it's Obama et al helping out bank lobbyists, not consumers.

Also, despite the harebrained claims by some in this thread, fees will be added or increased for lots of services, interest rates will go up in lots of instances, and at the same time credit is tightening. More people will be denied cards and those who have them will have lower credit limits.

Seriously, I think you guys have no clue what's going on with financial services and credit. You are so intent on protecting Obama and Democrats you aren't even aware of what's happening. People with great credit are losing their clout and their access to credit. And it's lovely that people are paying down debt and saving more but the truth is our economy and our personal finances have become dependent on credit, and what Obama, Democrats and the banks are doing (as much in cahoots as Bush and Republicans and banks were) is not making the system healthier.

 

[naked gent]

You'd be wrong to assume that.

I've delved into specifics.

In this thread?

AS I'VE SAID, this new legislation does not cap interest rates. I object to that. And it indicates that Obama and Congressional Democrats who wrote this are in cahoots with lobbyists and more interested in getting high marks from supporters than in putting through really good legislation.

The legislation also does not prevent banks from raising rates whenever they want on whomever they want. They can't do it on existing balances but they can on new charges. I object to that. And again it's Obama et al helping out bank lobbyists, not consumers.

So if congress had done as you recommend they do wouldn't that result in lower profits for the CC industry?

And wouldn't they then increase fees on their good customers as you say they will do as a result of the passed legislation?

On the one hand you're saying the action will result in higher fees for us all and on the other you say tougher action should have been taken.

As some here have told me you're not worth my time so I'll leave you here to stew in your bitterness.

 

[jackoroe]

Like water, finding the path of least resistance, the CC companies will continue to enjoy the same level of profits they are accustomed to. Like it or not, they can raise annual fees and interest rates for everybody and they most likely will.

All Obama is doing, is spreading the misery around to people who have been playing by the rules right along. I'll simply cut up my card if they do.

 

[naked gent]

Obama is doing? O and congress isn't just a conclave of 535 democratically elected leaders who happened by overwhelming majorities to pass this bill.

You can't get 90 senators to agree on much but they did on this. 361 in the house. That speaks volumes. Both parties were steadfast in supporting this bill. Obama could veto it and still it would become law.

No no its all Obama's fault. The fact that congress and most of the country are for the bill is completely beside the point.

 

[justapixel]

It also hurts Obama base.

Those people under 21 will have a very difficult time getting a credit card. They must now prove they have the money to pay the credit card off or have a co-signer.

Poor people will be simply denied credit cards.

Getting approved for a new credit card will probably be harder, too — even for those with a solid credit history. And if approved, the card will probably come with a lower credit limit than in the past.

With credit so much harder to come by, people could begin turning to outlets such as payday lenders and pawn shops, said Greg McBride, senior analyst with Bankrate.com.

"In the absence of credit cards, people in need of a short-term loan will resort to other means," he said.

http://www.google.com/hostednews/ap/article/ALeqM5hbDW0G41Oyzi6RHP9vtbM0xp6FOgD98A7A280

 

[grantt]

NickCole you have this one dead on. I also like your point that with every credit card company harnessed with the same rules and regulations there will be no choices for the consumer, and put many of these guys out of business. That spells even more people on the unemployment rolls. And this administration boasts about job creation......

 

[Spensed]

It's not a threat and they're not doing it to penalize their customers. You don't even understand the nature of the discussion. It's not about punishment, it's about profits.

Always everyone else, who doesn't "understand the nature of the discussion". Never you. LOL.

Threats needn't be about penalties. As in this case, they can be about consequencies. In more than one of my posts, I commented on credit card profitability. The point being that, despite the loss of profits from their past abusive practices, one couldn't simply take at face value that they would look to their no debt customers to make up lost profit and risk losing them to online payments, direct debits, cash transactions, etc.

It's what they're going to do to make up for profits lost because of the new legislation.

Banks are going to try to make up those profits, there's no question about that. There are only so many ways to do that.

Give that man yet another prize for saying the obvious. LOL.

The issue in this thread is whether they really going to do that by squeezing their no debt customers, whose transactions help produce, as another poster pointed out, billions in retail commissions. Try exercising some critical thinking and you'll see that that strategy may well prove unlikely and that, if it happens, it will need to be dealt with.

The whole credit industry is very precarious right now and they need to make profits. Obama and Congress will not dictate whether or not banks can charge an annual fee or which perks they have to offer CC holders or when they can begin charging interest on balances of customers with good credit history.

I mean, do you guys have any idea what's going on with financial services right now? You know -- the banks Obama's been handing trillions of our tax dollars (debt) to. Geesch!!!!!

I don't think the hand outs have been dealt with as well as it should. Specifically, the taxpayer should be no worse of than an arm's length third party providing those funds and that isn't the case.

But that's not the topic of this thread, which you started specifically about the credit card legislation and the response of the credit card companies thereto.

As one of the other poster pointed out, for all your usual hostile rhetoric about Obama, nothing you've suggested would solve the current credit card abuses without lowering profits that you fear would sought elsewhere. Quite the contrary.

 

[Kulindahr]

Even then refining capacity is independent of oil supply. The demand for certain distillates changes too. Gas prices inevitably will increase over time. Soon peak oil will have occured or already is occuring while the demand for energy is constantly surging. So while you all scream and throw temper tantrums over the price of gas I will be experiencing energy freedom. My next car will be an electric vehicle I can drive to work and never have to pay for energy again because wouldn't you know it there are solar panels on my roof.

And how long will it be until that technology filters down to the people who really need such vehicles, because they can't afford the fuel costs at the pump?

 

[Kulindahr]

I noticed the article mentioned Citigroup, Bank of America, and Discover... speaking of fiscal responsibility, all three received bailout money. They can suck it up or return taxpayer money. Actually, they should suck it up anyway and pay back the taxpayer money, plus 17.99% APR, and an annual fee of $50. No grace period.

Forget the 17.99%, though -- hit them with the 27.99 they're charging some customers.

I guess I, too, am having trouble feeling sorry for the credit card companies. It was their own irresponsibility that fueled this mess in the first place.

We need to return to the credit policies we had in the 1980s, where it took two or three solid years of hard work to get your first credit card, unlike the present situation where they're sending them to you in the mail.

One of the things driving this legislation is that there are a lot of people out there who are, effectively, being penalized for being poor.

As an example, consider two people who took out the same credit card with an interest rate of 9%: customer A has an income upwards of $50k; customer B has an income of about half that. After six months, customer A has carried a balance averaging $1k; customer B, about the same; in terms of on-time payments, customer B has a better record.
At the end of that period, customer A gets a letter informing him that his interest rate has been reduced to 7.9%, while customer B receives one informing of a rate change to 19.9%.
Why the change? The reason given customer B is that his income is not high enough to justify the low interest rate.
So the person with the better record gets shafted... and, shortly, because of the interest hike, can't make a complete payment one month, and discovers that the late payment fee has gone from $29 to $59 -- the discovery coming because customers in his interest-rate class now have to make a complete payment in order to escape the late fee, instead of the former "insufficient payment" fee of $9.

So what it boils down to is that the CC companies have been running a system which seems designed to make sure that the poor can't pay off their balances, by hitting them with higher interest rates, higher fees, higher penalties....

Whatever other effects this legislation will have, it will certainly help these folks.





btw: in the above example, "customer B" was me

 

[Kulindahr]

It also hurts Obama base.

Those people under 21 will have a very difficult time getting a credit card. They must now prove they have the money to pay the credit card off or have a co-signer.

Poor people will be simply denied credit cards.


http://www.google.com/hostednews/ap/article/ALeqM5hbDW0G41Oyzi6RHP9vtbM0xp6FOgD98A7A280

Justapixel, I hope you're right.

This is the way it was in the 70s and 80s. I believe we should return to the era of sensible credit policies.

It wasn't until the late 80s, when everything in the credit market was deregulated, that the seeds were sown for the current credit debacle. It was then that they started giving students—without even an income—a credit card just for being students.

Yes!

People who are living paycheck to paycheck should be smart enough, though, to refuse credit cards.

The path to getting credit used to require discipline, which meant that by the time you could actually get a major credit card you generally understood the game well enough to not get in over your head. Starting a credit record generally required setting aside money to pay for what you charged, usually at a local store run by someone who had faith in you, and that itself taught an element of fiscal responsibility not many today have: just because you have it doesn't mean you can spend it!

When credit was a privilege that had to be earned, we never worried about vast crashes in credit markets, or about banks writing off millions in bad credit as a regular practice.

 

[NickCole]

As some here have told me you're not worth my time so I'll leave you here to stew in your bitterness.

Funny because this shows you're sulking and in communication with others in a denigrating way about me.

I'm not stewing at all, and I never talk about you behind your back.

 

[NickCole]

Some here say banks won't impose new fees and higher interest rates and fewer perks and greater restrictions on people with good credit. Or that if they try they'll be stopped. News flash. It's already happening and nobody's stopping them. And banks will continue to push every element of that until customers revolt, which won't happen except in maybe a couple of instances and in those instances banks will retreat and try another tactic. This is the way this sort of business works.

Credit card customers really have no choice but to go along with most of it because most of us need a credit card. Even if I pay cash for most of my transactions, I need the credit card to function and participate in our economy as it is. I can't rent a car without a credit card, can't hold a hotel room or buy anything without being at the place of purchase and the time of purchase. It just isn't practical to not have a credit card, at least for me and the people I know. Could I cancel my Chase card and go with a smaller bank? Sure. But the larger banks will make sure there are reasons to stay with them.

As for Obama, it's revealing to yet again see Obama take credit for this and Obama supporters try to spread the responsibility away from him when criticism is raised. Obama, as usual, made public statements about this issue and pledged he would protect credit card customers, he had a closed-door meeting with credit card executives and after that he claimed to lay out the principles for this legislation. And yet his supporters cry, "Obama is doing?" and "No no its all Obama's fault. The fact that congress and most of the country are for the bill is completely beside the point." It'd be hilarious if it weren't so obviously heading us to a very bad place. Anyway, here's Obama pledging and laying out the rules:

Obama pledges protections for credit-card users

... The credit-card executives made the case in the meeting that the sweeping rules already ordered by the Federal Reserve, due to take effect next year, address many of the concerns held by the president and Congress.

"He disagreed with that case and believed that more needed to happen," White House press secretary Robert Gibbs said of Obama.

So Obama outlined the principles for any legislation: Protections so that consumers won't face sudden, surprising jumps in fees; requirements that companies publish their forms in plainspoken language, with no more fine print; the availability of customer-friendly comparison shopping on credit-card offers; and greater enforcement so that violators feel the full weight of the law.

http://news.yahoo.com/s/ap/20090423/ap_on_go_pr_wh/us_obama_credit_cards

What's wrong with the final legislation is likely a harbinger of what'll be wrong with Obama's healthcare legislation, and the flaws can be seen in his economic stimulus legislation.

 

[naked gent]

Funny because this shows you're sulking and in communication with others in a denigrating way about me.

I'm not stewing at all, and I never talk about you behind your back.

No one's talking behind your back........some here have simply asked me why I bother responding to your posts since your mind is apparently impervious to any reality that does not begin with Obama being a lying manipulative con man who has fooled almost everyone here except you of course.

I suppose I always knew they were right but you have now eliminated any doubt that may have existed.

 

[Kulindahr]

^ You did it again, Kulin.

(shakes hands with Kulin.)

A friend just told me something he got hit with, and this is even before this legislation: he hadn't used his card in three months, and they slapped him with a $19.00 "non-use fee".


Huh???

 

[NickCole]

No one's talking behind your back........some here have simply asked me why I bother responding to your posts since your mind is apparently impervious to any reality that does not begin with Obama being a lying manipulative con man who has fooled almost everyone here except you of course.

The second part of your sentence makes a lie of the first six words.


Like Obama, your own behavior continues to prove me right.