The Conservative Cave
Current Events => The DUmpster => Topic started by: franksolich on October 31, 2008, 03:00:01 PM
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http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4344142
Oh my.
How full of wonders, the world.
sinkingfeeling (1000+ posts) Fri Oct-31-08 12:33 PM
Original message
Banks seek help to forgive some credit card debt. Great deal for those not paying.
"This year, delinquent credit card accounts hit a six-year high of 4.9%. Meanwhile, charge-offs — when banks give up on collecting debt — have been rising for about two years, hitting 5.47% in the second quarter, the latest data available, according to the Federal Reserve. Credit card and mortgage losses have dragged down banks' earnings.
Banks are proposing that they forgive up to 40% of the credit card debt owed by the most financially stressed consumers, who are close to bankruptcy. These consumers would then get five years to pay off their remaining card debt, interest-free. Banks would pilot this program with 50,000 consumers, in hopes of expanding it to tens of thousands of others.
Banks don't need regulatory approval to forgive credit card debt. But they want the Office of the Comptroller of the Currency to waive a rule that requires them to book losses on forgiven debt the same year."
Makes me wonder why I bother to pay any of my debts. Credit card interest rates are going up for those with good credit scores even as the banks pay less and less in interest. I'd like to see them offer middle class Americans a 3.9% APR until balance is paid.
Ah Xoc Kin (136 posts) Fri Oct-31-08 12:46 PM
Response to Original message
2. what about student loan debt?
Hmmm. The ah-choo primitive must have a problem with something.
denverbill (1000+ posts) Fri Oct-31-08 12:48 PM
Response to Original message
3. It does suck doesn't it?
I am buying a house I can afford. I didn't get an no-prinicple ARM with a 5 year balloon on a mansion I couldn't afford. I didn't make the loan to the guy that was buying a mansion he couldn't afford. I'm not running up massive credit card debt.
But I have to pay for the people who made these shitty decisions, while the bank president keeps his cushy job and stock options and the homeowner keeps his McMansion and gets his credit card debt forgiven. And I pay for it with an inflation-riddled dollar meaning everything I buy costs more and the national debt goes up $1 trillion.
Where's the 'personal responsibility' Republicans always claim to call for?
Gormy Cuss (1000+ posts) Fri Oct-31-08 12:56 PM
Response to Original message
4. I wonder how much of that "debt" is in the form of fees and high interest rather than purchases. It's a good deal for the credit card companies to be able to write it off in a more advantageous way rather than all in the current year but I doubt that they're actually willing to risk any part of the original debt plus a comfortable cushion of interest.
I wonder if there's a good analysis of this out there....
franksolich, who does income taxes, has very good reasons to suspect many primitives pay more in credit card fees, interest, and penalties every month, than they do for groceries.
myrna minx (1000+ posts) Fri Oct-31-08 01:05 PM
Response to Reply #4
7. That's just it. If the banks weren't so bloody greedy with their usurious interest rates and fees, people would have a better chance to stay afloat. I have a boatload of debt, and I was well on my way yo be paid off and debt free in 3 years. I always pay on time, I'm never late, never go over the limit, I overpay my cards, I'm a very good customer etc, but just because they could, one of my credit cards jacked up my interest rate, so that alone has set me back by one whole year.
These predators are gouging their "good" customers, so I can't even imagine how they treat someone who has accidentally missed a payment or had to choose between the mortgage payment and a credit card payment.
ben_meyers (1000+ posts) Fri Oct-31-08 02:33 PM
Response to Reply #7
10. How about making the Credit Card issuers conform to state laws regarding interest and fees? As it is now many incorporate in Delaware, where for some reason they seem to be free to do as they please. They already have to conform to state laws in regard to the statute of limitations on the collection of unsecured debt. Some states are 3 years others are 6, but it's a local decision. Possibly Delaware and it's politicians wouldn't like it, but to bad.
Actually, South Dakota's more to blame than Delaware. Delaware's bad, and was the first, but South Dakota's worse.
Citibank should get out of Sioux Falls and move back to New York where it belongs.
ben_meyers (1000+ posts) Fri Oct-31-08 01:00 PM
Response to Original message
5. How long before people who have been responsible and managed their finances say "screw it", why should I pay my debts, and keep up with my mortgage? I want my bailout too.
Of course some people would say that I'm being smug and that they "would enjoy watching you have to stuff your self-satisfaction into a bodily orifice."
RollWithIt (1000+ posts) Fri Oct-31-08 01:04 PM
Response to Original message
6. To be fair, they still have bad credit...
And they won't be able to get new cards during that time period.
MindPilot (1000+ posts) Fri Oct-31-08 01:11 PM
Response to Original message
8. Back in the olden days credit card interest was capped at 12%
And it was deductible.
That must've been Arkansas, when it was 18% in most other states.
The problem was, at 12%, banks in Arkansas didn't issue too many credit cards, and most certainly not to primitives.
klyon (1000+ posts) Fri Oct-31-08 01:29 PM
Response to Original message
9. It makes me mad when I hear that irresponsible people get out of paying their debts. I am not apposed to taking away their credit privilege and stopping interest on what they already owe but I think they should have to pay back ever penny they put on their credit cards. I also am against people like Sam the NOT Plumber getting out from under his tax debt. Stop the fees and interest but make them pay. I pay my bills and taxes and I expect others to do the same. Don't insult me.
hawkowl88 (1000+ posts) Fri Oct-31-08 02:36 PM
Response to Reply #9
11. You sir are a sucker.
We are all suckers who play by the ever changing, completely unfair, rules made by those intent on screwing us. Seriously, you're anger is misplaced at those who can't afford to pay. It should be directed at those usurious bankers who are walking away with billions. They have designed the credit card scams to screw each consumer for the utmost they can possibly pay. This is actually a theory in economics to charge everyone a different rate for the same product to maximize profits. Those who can pay more do.
klyon (1000+ posts) Fri Oct-31-08 03:07 PM
Response to Reply #11
12. You are raising a totally different problem than the one we were discussing
yes credit card companies are riping people off with outrageous interest rates and I am proud to say I pay my cards off every month and only charge what I can afford.
Get back to the subject and stop calling people names I do not appreciate it.
closeupready (1000+ posts) Fri Oct-31-08 03:36 PM
Response to Reply #9
20. Stopping interest would help. As it is, do you know how easy it is to accumulate an amount of debt such that the monthly interest alone is more than rent or mortgage payments? Faced with such a crushing amount of debt/interest, it is no wonder people give up.
It's irrelevant whether such people have been responsible or irresponsible, just as it is whether or not lenders have been. Fact is, consumers need to start spending, and if they are saddled with these ridiculously huge debts for the next 20 years, that ain't gonna happen.
kerry-is-my-prez (1000+ posts) Fri Oct-31-08 03:10 PM
Response to Original message
13. However, doing a "charge-off" will hurt your credit rating...
pending (185 posts) Fri Oct-31-08 03:15 PM
Response to Original message
14. They do that anyway
Believe me I know.
Once your a couple years late on the card, they are happy many times to settle for 50% Its better than nothing.
Of course, the 40% they are forgiving is only about half the fees and interest that they have stacked up.
So its not like they are really losing anything at all, if you only pay half.
The ABP primitive:
HamdenRice (1000+ posts) Fri Oct-31-08 03:23 PM
Response to Original message
15. Democrats seek to help sick people with national health care. Great deal for those not healthy.
Good grief.
Ever heard of "there but for the grace of God go I"? Do you think everyone in trouble was a greedy idiot?
I just feel lucky that the health care reform system is not being designed with the sentiment expressed in this thread:
"I didn't get into a car accident -- why should I have to pay for some idiot who didn't drive carefully?"
"I didn't get colon cancer -- why should I have to pay for some idiot who didn't eat enough vegetables -- and we all know the only reason he got colon cancer and I didn't was that I ate a more virtuous diet."
sinkingfeeling (1000+ posts) Fri Oct-31-08 03:26 PM
Response to Reply #15
17. IMHO, there's a big difference. I agree with Obama that health care is a right.
Going into a store and buying a flat screen and then not paying the credit card company for the 'loan' they gave you is entirely different. I see a closer association with theft than with health care.
The ABP primitive again:
HamdenRice (1000+ posts) Fri Oct-31-08 03:29 PM
Response to Reply #17
19. Buying a flat screen tv while employed in New Jersey and suddenly having your job disappear because of mortgage defaults in California is more like a car accident than you might imagine.
Or more realistically, using your credit card for emergency room care while employed, and having your job disappear because your employer can't role over his commercial paper and meet payroll is a lot like a car accident.
I know, I know -- they were all greedy and stupid and it's better to "let it collpase."
depakid (1000+ posts) Fri Oct-31-08 03:24 PM
Response to Original message
16. While interest rate caps are a good idea- if you take it a step further you'll see some holes in your logic.
Namely, how much of the debtor's principal still due can be attributed to exhorbitant interest rates?
The answer for many people is a LOT. So debt forgiveness makes sense, both pragmatically (with an eye towrd the overall world economy) and as an element of fairness (call it a measure of return of ill gotten gains from usury).
Better that the accounts (and/or any securities backed by them) are worth something, even at a discounted value, than to have them go entirely into default.
lelgt60 (157 posts) Fri Oct-31-08 03:28 PM
Response to Original message
18. To all those who made wise decisions and aren't in financial trouble...
Congratulations. Nobody needs to worry about you...yet.
I'm in the same situation. Here are some of my wisest decisions:
1. Due to my incredible intelligence, I chose to be born white, in the USA.
2. I chose intelligent, caring parents, and grandparents, who brought me up with proper values, and helped finance my education.
3. I choose not to get any number of debilitating diseases.
4. I chose to have many other strokes of good luck such as not getting into life changing accidents.
5. I chose not to have any of my many mistakes have significant economic or health consequence, although even if they had, my choices of parents would have probably mitigated those as well.
I simply cannot understand why I should help those who didn't have the character to make similarly good decisions.
DU AdBot (1000+ posts) Fri Oct 31st 2008, 03:40 PM
Response to Original message
1 flat stomach rule: obey
I cut out 2 lbs of stomach fat per week
by obeying this 1 old rule
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denverbill
It does suck doesn't it?
I am buying a house I can afford. I didn't get an no-prinicple ARM with a 5 year balloon on a mansion I couldn't afford. I didn't make the loan to the guy that was buying a mansion he couldn't afford.
It wasn't mansions they were buying, it was primarily low-income minorities who otherwise didn't budget for a loan that were given one anyway when your Dem reps in Congress lowered the lending standards when it came to qualifying income.
My main suggestion for denverbill is if he happens to finds himself in line at Starbucks behind some black punk, don't mention the bailout, because it might be his fellow DUmmie ejbr who will give him an earfull about the man keeping him down.
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Is the concept of living within your means completely alien to these people? :thatsright:
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Somehow these idiots seem to think that if you have a credit card it is supposed to be maxed out at all times.
Get a clue lurking DUmmies,credit cards are financial tools that require intelligent and thoughtful.........Nevermind,you all don`t stand a chance.
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Once the government turned on the spigot, it will never be turned off.
Thank god these same assholes were not around for the dotcom bust, or 9/11, or any of the other hiccups that have come and gone in our history.
It a sad state of affairs that being irresponsible is now being rewarded by those that make responsible decisions.