Dear Wall Street
I hear you had it rough on Monday. Are you feeling used and abused yet? Good! Welcome to my world!
Every time I come to see you about floating a loan, even if it's just to fill my gas tank, you want enough information from me to make the National Security Agency very jealous! After all - they have to gather my information without letting me know while you just stand pat and demand it.
Even if I'm calling in to one of your lesser brothers (who generously deigns to allow me to utilize their facilities to do my banking), I have to practically expose every physical attribute I have as verification that I am who I claim I am. Yet you just drop me a note, or call me during dinner, and expect me to give you all the same information you should already have on file just so I can take advantage of some "service" or new "convenience" you insist I can't live without.
So what makes you exempt from the rules you expect me to follow? You are insisting that I turn over money that I need for other uses because you got stupidly greedy and lost your stake in the game. Why should I? Just because your friends tell you that you are too big to fail? Male Bovine Excrement (you describe yourself as a bull, so you must know what a bovine is)!
Let's turn this around for a moment - what the hell would you be telling me if I came to you with that sob story after a weekend in Vegas? Does the word "tough" sound familiar? Does the phrase "You should have been more responsible?" If not, I have a whole file full of such responses you sent me in my files. Some of those might ring a bell in that dense cranium of yours.
"Tough!" "You should have been more responsible!" That's exactly what I feel about you and your excesses. I don't give a damn that you got yourself in trouble, and I do think that you should have been more responsible, especially since the government decided you were soooOOOooo trustworthy that they didn't need to keep close watch upon you! Too late do We the People discover that you and they had a little "understanding" that wouldn't have met with my approval.
Article comments
— go to most recent comments1 - Joanne Huspek
I commented on this earlier in the day, but I think my comment was eaten by some online creature.
I can't remember what I said (long day), but this is exactly the sentiment of Main Street.
2 - Cindy D
Bankruptcy Trustee: What led you into bankruptcy?
Bankruptcy Filer: My business had some set backs at about the same time as I developed a number of costly medical problems. So, I missed a few payments, but managed to catch up. What really effected my inability to pay my debt was the interest rate hike to 32.9% by Chase Bank. You see, they had my mortgage and knew I was paying that first. So, they refused to lower my interest rate below the 32.9% on my unsecured debt to a payment that I could reasonably afford. Instead they thought I should pay 1/3 of my debt every year in interest + the principal.
I thought only the mafia could get away with this.
Less than half of all U.S. states bother to cap credit card interest rates, and few credit card issuers are based in these states anyway.
Most major credit card issuers are based in states without usury laws and without interest rate caps on credit cards. Banks and credit card issuers based in these states can charge any interest rate they wish -- as long as the rate is listed in the cardholder agreement and the borrower agrees.
Credit card companies sidestep usury laws
And thanks to a 1978 U.S. Supreme Court decision, these the-sky's-the-limit rate policies dominate the credit card business.
What does it tell you that a borrower is charged such a high rate of interest? Paraphrasing the words of one of our representatives: It tells you that the borrower isn't considered a very good risk.
3 - Joe
Cindy B: if you're paying 32.9% on anything you're an idiot. That's like being mad at the carnie for guessing your weight.
4 - Cindy D
Joe,
Hello brain trust. Isn't it time for your beer and pro-wrestling match?
5 - whodunnit
Cindy D
"What does it tell you that a borrower is charged such a high rate (32.9%) of interest?"
Someone has a fool for a borrower.
6 - Cindy D
whodunnit,
I can understand someone like Joe, who seems to be a kid, saying something that stupid. But if you got nothing more than "the borrower is a fool" from that post, try having that friend of yours who knows how to read tell you what it says again. Apparently, some information was left out.
7 - whodunnit
Cindy D
I agree that a 32.9% interest rate is usurious and should be illegal, but there is no other way to describe someone agreeing to pay a 32.9% rate.
8 - Cindy D
whodunnit,,
That's the problem. Anyone who has credit agrees. It standard in the credit card agreement.
So, anyone who owns a credit card has signed and agreed.
The problem is the responsible borrower has no reason to even consider being late, let alone paying all those late fees and having her/his rate raised. But, we can't possibly plan for unforeseeable calamities. So, when they do occur, credit card companies are permitted to put even more pressure on the borrower.
Our representatives don't represent us. And I wonder how many have been pushed into bankruptcy, who otherwise might have avoided it, merely by adding these straws on her/his overburdened back.
9 - whodunnit
Cindy D
"Our representatives don't represent us."
Anyone over the age of 21 who hasn't known that for a very long time has been asleep.
10 - Cindy D
whodunnit,
I simply made an assertion. You seem awful snippy over nothing for a religious fellow.
11 - whodunnit
Cindy D
"You seem awful snippy over nothing for a religious fellow."
Does being against the termination of an innocent life make me religious?
How about if I base my belief on science and Newton's First Law of Motion:
“A body in motion tends to remain in that state of motion unless an external force is applied to it."
In words you might understand, an unborn child if left alone, will continue to develop into one that breathes oxygen unless an external force is applied to abort it.
12 - Cindy D
whodunnit,
According to science life begins at conception. So, you could very well not be religious. On the other hand not all Christians are anti-choice.
No, it wasn't your belief that suggested to me you are religious. It was your moralistic agenda.
13 - whodunnit
Cindy D
"It was your moralistic agenda."
Thanks for recognizing it.
14 - Clavos
So, anyone who owns a credit card has signed and agreed.
1. Neither of my CCs even remotely approach a 32.9% interest rate; they're both air miles reward cards, and both are at 14.990%.
2. Turn the card in (if it's zero balance) and get another, with a different bank. There are lots of cards out there with much lower rates.
If card is carrying a balance (not a good idea), find a card which will let you rollover the balance to it (usually at an extremely low, but short duration, rate) and with a lower long term rate and cancel the high rate card.
3. Find a good credit counselor.
4. Destroy all your cards and go cash basis. negotiate repayment terms with your creditors (most will work with you) and, to the extent possible, refrain from buying what you can't pay for in cash
15 - Lisa Solod Warren
Gosh, mine has a much lower interest rate than 14.9 percent.
I think the main thing is, don't carry a balance if you can help it.
Certainly don't carry a huge balance.
The rest of Clav's advice is sound. And always negotiate with your bank. DON'T pay late. That gets people in the worst trouble. Never borrow money from those awful Checks into Cash places...those interest rates are horrific and can ruin a credit rating.
We all have a tendency to want things we can't have. Me, too.
RESIST.
16 - Cindy D
Clav,
Most good prompt payers, like you, won't have a problem. The person in my example, in fact, previously had an average rate of 11%.
And here is my point:
Unless something you do not foresee goes wrong and you are not able to make some payments on time.
Read the fine print
For much of American history, most states had laws that effectively capped interest rates. In 1978, however, the Supreme Court ruled that an obscure 1863 law allowed banks to charge up to the maximum interest rate stipulated by the legislature in their home state, not the interest rate of the states in which they do business. Predictably, credit-card operations quickly relocated to states such as Delaware and South Dakota that do not regulate interest rates. Nearly 20 years later, in 1996, the Court applied the same logic to credit-card fees. Credit cards were effectively deregulated.
All that remains of consumer credit protection today are weak disclosure requirements. Companies must include a box on all bills with key rate and fee information. But these details are confusing even to lawyers: A typical MBNA disclosure box contains 18 different Annual Percentage Rates (APRs). And some critical information doesn't even have to be put in the box. Consider Chases breathtaking assertion that "we reserve the right to change the terms of your account (including the APRs) at any time, for any reason." It's buffed in small print on the back of a form.
So, people may have no idea what they have agreed to--particularly people who don't expect to ever make a payment late.
17 - Cindy D
Perhaps sticking with small banks in states that regulate interest rates is also wise.
If you have one of the big banks, you may not be aware of it, but you have already agreed to whatever they decide to charge you.
18 - Clavos
Unless something you do not foresee goes wrong and you are not able to make some payments on time.
That's what my cash savings are for, Cindy.
I have a decent income, so I keep my cards paid off (I really just use them for mileage accumulation and convenience of paying only one bill a month--I put everything on them), and I don't buy anything that I can't pay off each month.
19 - Lisa Solod Warren
People NEED to read the fine print.
They also need to know that they can buy insurance that pays off their balance if they can't. Sometimes that makes sense. I don't do it but some do.
People often don't read stuff before they sign it. But they need to. And they need to shop around before they get a card.
Sometimes it pays to wait and think. Sort of like being a presidential candidate.
20 - Cindy D
That is wise Clav. As is being in a business that doesn't require credit--or require personal signatures on credit.
Would that no one in the world required a credit balance. Or that everyone was always prepared with an unlimited savings that would never run out no matter what unforeseen event happened. We wouldn't need this discussion.
I suppose when your doors close for a few months because your business catches fire you should just throw your business in the garbage rather than---gasp--do the unheard of and borrow or lend it your savings or both to keep it afloat.
Particularly knowing you can pay the debt. That is until the rates hit 32.9%.
21 - Cindy D
Reading the fine print is always wise...if you can find it or understand it.
22 - Clavos
I was speaking of my personal finances only, Cindy.
My business is highly liquid. I have a partner, but no employees; everyone who works for us is an independent contractor, working on straight commission (most of them are Sub-S corps themselves), so I have virtually no employment expenses. We have a small, inexpensive office, and our main business expense is advertising, about 80-85% of our total overhead.
Best of all, I get paid for spending a lot of time on the water on boats.
23 - whodunnit
"A fool and his money are soon parted."
-- Thomas Tusser (1524â€"1580)
24 - Cindy D
Clav,
Sorry, I didn't mean to be snippy.
I just think that a lot of people are going to be pressed to bankruptcy that need not be there. With some credit issuers raising rates not for late payment on their debt, but because a consumer was late paying on some other creditor's debt--the problem can quickly escalate.
I think our representatives should act to implement usury laws.
I suppose the response I was getting wasn't satisfying.
P.S. I love the water. I'm still moving to Fort Lauderdale, slowly but surely.
25 - Silas Kain
People NEED to read the fine print.
Don't you think we need to make sure that people can at least READ when they graduate from High School first? Said it before and I'll say it again --- EDUCATION is the key to turning things in this country around. It will take 15 - 30 years but it can be achieved.