Credit cards must be stopped
October 20th 2009 18:52
Signature Tune
From: Glendale News Press
By DAN EVANS
This week, I received a piece of mail from Citibank. More accurately, my wife received the letter. I mistakenly opened it, forgetting that there might be more than one Evans at our residence. Inside the letter, one of dozens we seem to get each month from various banks, lenders and the like was the following note:
“To continue to provide our customers with access to credit, we have had to adjust our pricing. The terms of your account will be changing. These changes include an increase in the variable APR for purchases to 29.99% and will take effect November 30, 2009.”
The letter continued that we could opt out of these generous terms, keeping the old rate, but the account would not be renewed past its current expiration date.
I found this pretty amazing. We recently refinanced our house, which involved — among a thousand other things — running a credit report. Both my credit and my wife’s credit is well above average. We attempt to pay the bill in full each month. Even when we don’t, a balance is rarely on the card for more than two months.
This got me to thinking: If Citibank is treating us this way, how do they treat people who rely on credit for rent and food? Such people will get into a whirlpool of debt from which it will be nearly impossible to recover. But I suppose those executives need their bonuses.
Many, many banks and credit card companies are doing this sort of thing. Due to lax oversight from the federal government, it’s completely legal. According to the U.S. Department of the Treasury, there is no federal law that puts a cap on interest rates. That decision is left to the states.
However, the applicability of that cap depends on where the bank is based, not the consumer. This is why many banks are headquartered in South Dakota and Delaware, where the laws are, ahem, friendly toward banks. (Citibank, N.A. is in Sioux Falls.)
Following a discussion that lasted two or three seconds, my wife and I have decided to opt out. We can afford to not use credit. But for those who have to use credit, real problems await. Unless credit card companies come to their senses, these new policies may destroy families, and with it, communities like ours.
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Comment by Michael 2
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My first inclination is to say: Dump all your credit cards.
But I am given pause. You do know what will happen if all of us who actually give a damn and pay our bills on time dump all our credit cards.
Credit card companies will go bankrupt.
But they are too BIG to fail!
Bailouts, again with your money, will follow.
I keep hearing Marxists say it's a rigged system designed to make the rich richer.
Would the Marxists who say this please get ahold of Obama, Pelosi, and Reid and remind them not to reward the people who made the bad loans and poor investments?
Maybe we should try this post consumerism thing. Less of a credit driven economy. I still can't go along with the Maoists and Marxists but as long as their side is in charge anyway, would some remind Chairman Obama not to enrich the rich, greedy corporations with a bailout. Just this once?
Comment by katyzzz
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