Debters' Prisons Returns To USA?????

Gee, if it is a "stupid credit card", why did she get it and use it?

Frankly, I bet debtors prisons come back. Too many are treating this like a game.

Steve

Don't you realize we now live in the Incorporated States of America?
When our country got rid of usury laws it was one of the single worst things they had even done to the average citizen.

Steve,
If I fully answered your above statement I would be turning this into a full blown political discussion, so I wont.

When I started my LLC a few years back I got a credit card in my business name to start building my credit.

I charged a few things (a few hundred dollars) and when I went to pay my bill, I looked closely at the interest rate: 34.95%

I called them up, angry (although it was my own fault for not reading the fine print - but I NEVER would have though it would be so high. My personal credit is quite good!). The person on the phone lowered it to 19%

So instead, I paid it off completely and let it sit there. Now, the card is no longer active. The company/bank I got it from no longer issues credit cards. Gee - I wonder why?

Mike,
I had a similar incident.
When I opened my shop I got a business card. The inerest rate was 12%.which was decent,aftert all I had almost perfect credit.
It had a 15K limitand I had used about 10K.I was making a monthly payment to them that averaged $500 a month.Some months more, but I don't think I ever made one less than that.
Then I got sick and I missed a payment. I got a notice that due to the payment being late my interest was being changed from 12% to 28%.
That card was never used again.

Kim....economics may well be soon one of the topics which is not allowed here as there is no separation between economics/politics any more.

This situation was predicted in the early 70's when they did away with metal backed currency.......and that is why they have been able to institute such outlandish fees and punishments. I was informed way back then to NEVER get a credit card, and I to this day have never had one, and never will. I do use a debit card, but that's a whole different animal and I try to draw via ATM so my transactions aren't followed. It's really not anyone else's business what I spend my money on and if someone wants that info, they can pay ME for it instead of someone else who compiles my info then sells it.

As far as debtor prisons.........if it's not illegal to just sporadically double the interest rate, it should not be an offense with jail time attached to not be able to pay debts. After all, when XX amount of debt can be sporadically changed to be XXX amount of debt suddenly, there will be major defaults following the increase.

Of course, jails are corporate/for profit entities, so anything that makes the average citizen a detainable criminal is likely to land them in jail now and because people have become so highly judgmental, often wielding the "get what they deserve" attitudes about incarceration no matter what the infraction, the system will be allowed to progress accordingly.

The only resolution to this progression is a return to metal backed currency. Until then, you are owned by World bank and might as well get used to corporate law.

At least those debtor prisoners will get a free meal and not having to deal with other stuff. They really should do something about the system indeed.

Since this thread has talked alot about credit cards and their abuses here's a few highlights of the Credit CARD Act of 2009 signed into law May 22, 2009.




What does the credit card law mean for cardholders?

Millions of credit card users will avoid retroactive interest rate increases on existing card balances and have more time to pay their monthly bills, greater advance notice of changes in credit card terms and the right to opt out of significant changes in terms on their accounts.

That will take the surprise out of "gotcha" fine print and give consumers time to shop around for better deals if they don't like the new terms.

The requirements are being phased in.

The first batch took effect Aug. 20, 2009, and the majority of provisions started on Feb. 22, 2010, while some begin in August and December 2010.

The Fed just announced final rules for the third phase of the Credit CARD Act -- which takes effect in August.

Those rules say, among other things, that late payment fees will be capped at $25 in most cases.

Also, if consumers exceed their spending limits, they can't be charged more than the excess amount.

The law has fundamentally changed the way credit card issuers market, bill and advertise credit cards.

Here are the highlights of the credit card law:

Limited interest rate hikes:

Interest rate hikes on existing balances are allowed only under limited conditions, such as when a promotional rate ends, there is a variable rate or if the cardholder makes a late payment.

Interest rates on new transactions can increase only after the first year.

Significant changes in terms on accounts cannot occur without 45 days' advance notice of the change.

Limited universal default:

"Universal default," the practice of raising interest rates on customers based on their payment records with other unrelated credit issuers (such as utility companies and other creditors), has ended for existing credit card balances.

Card issuers are still allowed to use universal default on future credit card balances if they give at least 45 days' advance notice of the change.

The right to opt out:

Consumers now have the right to opt out of -- or reject -- certain significant changes in terms on their accounts.

Opting out means cardholders agree to close their accounts and pay off the balance under the old terms.

They have at least five years to pay the balance.

Limited credit to young adults:

Credit card issuers are banned from issuing credit cards to anyone under 21, unless they have adult co-signers on the accounts or can show proof they have enough income to repay the card debt.

Credit card companies must stay at least 1,000 feet from college campuses if they are offering free pizza or other gifts to entice students to apply for credit cards.

At a glance: Credit card law reform

* What's happening:

New consumer credit card protections began on Feb. 22, 2010.

Among the changes:

Card issuers can only increase interest rates for a limited number of reasons and can't increase rates at all during the first year of a new card account.

Young people must be at least 21 years old or get an adult to co-sign with them if they want credit cards on their own.

* Why it's important: A new federal credit card law tilts the playing field toward consumers by limiting some of the credit card industry's most profitable and punitive practices.

Consumer advocates favor it.

Card issuers warn it will drive up the price of and limit the availability of credit cards at a time when the country needs more spending to stimulate the economy.


More time to pay monthly bills:

Under the credit card law, issuers have to give card account holders "a reasonable amount of time" to make payments on monthly bills.

That means payments are due at least 21 days after they are mailed or delivered.

Consumers have complained about due dates that change without notice or are moved up, giving them less time to pay their bills and increasing the likelihood of late fees.

Clearer due dates and times:

Credit card issuers are no longer able to set early morning or other arbitrary deadlines for payments.

Cut-off times set before 5 p.m. on the payment due dates are illegal under the new credit card law.

Payments due at those times or on weekends, holidays or when the card issuer is closed for business are not subject to late fees.

Highest interest balances paid first:

When consumers have accounts that carry different interest rates for different types of purchases (i.e., cash advances, regular purchases, balance transfers or ATM withdrawals), payments in excess of the minimum amount due must go to balances with higher interest rates first.

Common practice in the industry had been to...

... apply all amounts over the minimum monthly payments to the lowest-interest balances first -- thus extending the time it takes to pay off higher-interest rate balances.

Limits on over-limit fees:

Consumers must "opt in" to over-limit fees.

Those who opt out would have their transactions rejected if they exceed their credit limits, thus avoiding over-limit fees.

Fees charged for going over the limit must be reasonable.

No more double-cycle billing:

Finance charges on outstanding credit card balances must now be computed based on purchases made in the current cycle rather than going back to the previous billing cycle to calculate interest charges.

So-called two-cycle or double-cycle billing hurts consumers who pay off their balances, because they are hit with finance charges from the previous cycle even though they have paid the bill in full.

Subprime credit cards for people with bad credit:

People who get subprime credit cards and are charged account-opening fees that eat up their available balances get some relief under the new credit card law.

These upfront fees cannot exceed 25 percent of the available credit limit in the first year of the card.

Instead of charging high upfront fees, some issuers are considering high interest rates on these high credit risk accounts.

Minimum payments:

Credit card issuers must disclose to cardholders the consequences of making only minimum payments each month, namely how long it would take to pay off the entire balance if users only made the minimum monthly payment.

Issuers must also provide information on how much users must pay each month if they want to pay off their balances in 36 months, including the amount of interest.

Law doesn't cover everything...

Consumers should take note:

Although the reforms are the most dramatic changes in credit card laws in decades, they do not protect card users from everything.

Issuers can still raise interest rates on future card purchases and there is no cap on how high interest rates can go.

Business and corporate credit cards also are not covered by the protections in the CARD Act.

If credit card accounts are based on variable APRs (as the majority now are), interest rates can increase as the prime rate goes up.

Credit card companies can also continue to close accounts and slash credit limits abruptly, without giving cardholders advance warning.

Many banks are already finding ways around the law and launching new fees not specifically banned by the credit card reform law.


Have you noticed the new look of the statements???


Hope this helps!!

TL

Yes, Obama signed a new act into law,but it has no real bite.
As you said:
"Many banks are already finding ways around the law and launching new fees not specifically banned by the credit card reform law."

Now,to your next question:
"Have you noticed the new look of the statements???"
I can answer no, because I don't have any credit cards and haven't had for several years now.
And I really don't see anything in the future that could cause me to get them again.

A Court case over here (Ireland) has resulted in a finding that jailing people for inability to pay debts is unconstitutional. You can now only be jailed if you have the ability to pay, but refuse to do so (assuming it is a legitimate debt in the first place). And even that is pretty convoluted as owing money isn't a crime, so the threat of prison comes from breaching a Court Order to pay up, rather than actually owing the money in the first place.

Also, a prominent Judge here has also said he will jail creditors who give people a hard time over debts that have arisen as a result of the ongoing recession.

So TL, where specifically is the bite?
And for the record, I am being sincere in asking and not being sarcastic.

I didn't say I didn't see ANY good in the bill, I just think so far its really nothing.
In my opinion a real reform bill would once again outlaw usury.
A real reform would make a contract a contract, meaning that if I get a card at 10%, thats the rate the life of the card. All this bull about having 27 different kinds of rates is plain crap.
Just those two things alone would radically change industry. And sadly, its nothing new, its the way things used to be done. And its ethical.

Kay:
"The biggest plus of the bill is the elimination of the cross default provision where all credit card lenders can raise your interest rate if you are late on a totally unrelated payment to someone else. That was a biggie in the bill."

That is indeed a biggie!

Good.

See, these are court judgments.

There's always been this fundamental problem with debt collection. You take someone to court, and the court finds that they owe you $4,500.

Guess what happens now?

Nothing.

It's entirely up to you to get the money the court says they owe you.

Guess what traditionally happens if they don't give it to you?

Nothing.

Now, imagine that you are a small business owner - as most of you at least want to pretend you are.

And imagine that someone owes you several thousand dollars for something your business did for them.

And imagine that you take them to court and get the judge to say "yes, they owe you several thousand dollars."

Wouldn't you like that person to face some sort of consequences if they don't give you your damn money?

I sure would.

Well, I realize how tough things are in a bad economy, and how predatory CC companies are.

But when you get a credit card it comes with a certain responsibility. So many people don't see it as cash, so they over spend. Then can't afford the payments. Which cause their rates to go up and credit scores to go down.

Used responsibly - and keeping a TIGHT grip on spending and a CLOSE watch on your statements and your credit report/score and you'll be fine. When you fall in to the responsible category you still get reasonable rates. When you are not late, over the limit, etc. you KEEP the reasonable rates.

Of course, I realize there are circumstances, such as job loss, etc. I am referring really to those who use them irresponsibly.

I am not being judgmental either. I once was one of those irresponsible users. It took me 3 years to finally clean my credit report, bring UP my score and bring DOWN my rates. The biggest change I have made is I now don't buy something on a credit card that I can't afford to pay for in cash.

And finally, when you keep your record clean, if your CC company starts raising your rates, you have leverage - shop around for better rates, or call them up and threaten to shop around for better rates. They WILL accommodate you if you have a good history.

TLTheLiberator,

I'll ADMIT it. Those are some nice provisions. They really should get rid of the ridiculous charges to honest people though. And WHY would ANY decent government allow them to charge, timely payers, as much as 30%+ for money THEY can borrow for as little as 0%!?!?!? And the credit reporting agencies are a JOKE! I had loans listed that were NEVER really loans, etc... When I refinanced my home, for example, the checks to pay off credit cards were listed as a separate loan EVEN though the amount was in and added to my home loan. Of course, it doesn't show me as owing any money, but makes it look like I can BORROW money! I have a couple credit cards listed in different places on the credit reports so it looks like I have more available credit than I do. And all three reports look different! Different numbers of accounts, values, etc... And my home loan shows up as TWO inquiries! There is a FEDERAL law that they are supposed to CORRECT mistakes, but they don't.

If not for the need for short term credit, I would just cancel them ALL!

Steve

The real idiocy in this whole ball of crapola is the American public has been too stupid to just say no and just cut up or returned their cards to companies who played the games with them. A company can't survive without customers and if the customers are willing to deal with them no matter how willing they are to pull completely criminal crap on them, why should they change and why should we need to hire more government workers to oversee what people SHOULD be overseeing by their own damned volition.

Would it be so traumatic to not be able to afford $200 sneakers for the kid because you told some CC company to straighten out their act or go back to hell where they came from?

There are people losing their homes and ranting like banshies about the Mortgage companies -- but WHO was it that took out the mortgage for a house 4 times a reasonable price and, during a period of stagflation actually signed for balloon payments? In the gambling world it's known as "betting on the come" and it's totally risky and not considered rational. Even the foaming gambling addict knows betting on the come is a risk. So we do our household finances that way now?

It's real simple. We act like idiots and give patronage to any crook going as long as we think we can get everything we want right now.

So maybe jail would be a good idea for the criminally stupid. If we get the people who will give patronage to criminals off the street, enough of the public with some financial intelligence can just quit dealing with the criminals until they have to start being upright ethical companies again or go under. That goes for companies that outsource too. If you aren't good enough to hire within the US, why should people buy your services/products?

The American public isn't being rapped - it's being pimped.

"You mean like, say, if they take a car out on a test drive and don't bring it back? Hey, they both knew the rules when the car got driven off the lot. Why should we waste public funds to track down, arrest, and incarcerate such a person"

That's an awful far stretch CD.