Why Credit Card Companies are so Mean

[Berkut]

DG, I am still waiting for that data you mentioned showing all those people who are being broken by the shady credit practices - as opposed to simply having borrowed more than they could afford.

[Caliga]

In that case, guarantee that a bill will be mailed by a certain date.  Let's remember:  People who don't make their payments are deadbeat scum, whether they got a bill or not.  Even a late payment is a sign of foolishness.  It's not like they don't know that they spent the money.  The creditor should not be responsible for the delivery of a bill, merely the sending of it.

You should watch repo man videos on YouTube.  They'd warm your heart.

[DontSayBanana]

Disclosure is great and wonderful, Berk, but most consumers don't have either the schooling or the spare time to suddenly get up-to-speed on the vast amounts of seemingly-sparsely-connected numbers they would find themselves flooded with. Risk management is like any other science; before you can dabble in it, you need to learn to understand it.

Personally, I'm for middle ground. Currently, the rights are almost exclusively in the hands of the card issuers, and if/when this gets pushed through, they'll be almost exclusively in the hands of the cardholders. There needs to be more of a balance- for example, a cardholder has in his or her contract that they can only renegotiate once a year, while the company can change the terms whenever it sees fits. That kind of restriction should be bidirectional, especially as a card issuer's sudden decision based on one month's performance might be a mistake and just a "bad month" for the cardholder.

Shortly, terms need to be more fixed for consumers (especially as cardholders don't have the benefit of whole accounting departments to deal with massive changes on a daily basis), and card issuers need to have less of a hassle in dropping proven nonperformers.

[crazy canuck]

Just because there are reputable alternatives doesn't mean that disreputable practices shouldn't be clamped down upon.  Another reason that the kinds of issuers that do such dirty tricks typically have consumers who don't have a lot of alternatives.  Typically it's the low end providers that engage in the most disreputable practices, regardless of the industry.

If you assume something is disreputable then of course taking action makes sense.  But you have not convinced me that asking people to pay money they owe in less then three weeks is disreputable.  On the contrary I see this kind of legislation as potentially more harmful since it enables bad habits.  People should not be turning to credit cards as debt devices.  They should not using credit cards to make purchases unless they have the money to pay the debt.  If they do  that then shorter time periods to pay should not matter.

[crazy canuck]

In other news from the Monkey See, Monkey Do department, the Canadian Minister of Finance is going to announce similar legislation today.

[Ed Anger]

In that case, guarantee that a bill will be mailed by a certain date.  Let's remember:  People who don't make their payments are deadbeat scum, whether they got a bill or not.  Even a late payment is a sign of foolishness.  It's not like they don't know that they spent the money.  The creditor should not be responsible for the delivery of a bill, merely the sending of it.

You should watch repo man videos on YouTube.  They'd warm your heart.

I can tell you some repo stories if you want.

[DGuller]

If you assume something is disreputable then of course taking action makes sense.  But you have not convinced me that asking people to pay money they owe in less then three weeks is disreputable.  On the contrary I see this kind of legislation as potentially more harmful since it enables bad habits.  People should not be turning to credit cards as debt devices.  They should not using credit cards to make purchases unless they have the money to pay the debt.  If they do  that then shorter time periods to pay should not matter.

I paid my balance in full every month (actually my mom did), but it still mattered to me.  I remember getting socked twice with the late fee, when the check got to them one or two days late.  Obviously I dumped that POS credit card as fast as I could get another credit card, but back then people like me (young with no income) couldn't easily get credit cards.

[viper37]

Assumptions and presumptions are useful, but only until you have actual data.  The actual data, reflecting real life rather than ideals, shows that credit cards are breaking a lot of people.

so are drugs, tobacco, disease, lack of healthcare, alcohol, etc.

[Berkut]

Fundamentally, the problem that the "lots" of people DG and Alfred are talking about have with credit has little or nothing to do with the terms of their loans. I do not believe that there are that many people who are in serious trouble with credit debt who would not be in serious trouble if only the bank did not change their rates or give them a free t-shirt.

They are in trouble because they have borrowed way more than they can afford. It is just that simple.

This is band-aid, populist, feel good legislation. It is everything that is wrong about the liberal view of government, business, and individuals, wrapped up in one tidy little abortion of a bill.

Are you grossly in debt and have no way to pay for all the shiny toys in your house?

Well, it isn't YOUR fault, gosh no. It is those nasty Big Banks and their Predatory Practices that have got you into such dire straits! And of course you, as a ignorant consumer cannot possibly protect yourself from Big Business, so The Government shall come in and save you from them - and save you from yourself, because we know best. Vote for me! *I* can protect you!

[Berkut]

    Assumptions and presumptions are useful, but only until you have actual data.  The actual data, reflecting real life rather than ideals, shows that credit cards are breaking a lot of people.

Still waiting for this "actual data" that shows that these people being broken are NOT in trouble due to their own choices about how much debt they should have, but rather because of the kinds of actions taken by banks that this bill will address.

I think this is why you had your little fake temper tantrum and refused to respond to me anymore - you know you cannot actually provide any such "actual data".

[ulmont]

Well, it isn't YOUR fault, gosh no. It is those nasty Big Banks and their Predatory Practices that have got you into such dire straits!

So you are now denying the effectiveness of the advertising industry, and that the credit card industry's economic incentives are directly opposed to the economic incentives of their customers?

This is band-aid, populist, feel good legislation.

You shall (still) not crucify mankind upon a cross of gold!

[Berkut]

Assumptions and presumptions are useful, but only until you have actual data.  The actual data, reflecting real life rather than ideals, shows that credit cards are breaking a lot of people.

so are drugs, tobacco, disease, lack of healthcare, alcohol, etc.

Not a good response though, since he almost certainly feels that Nancy Pelosi can make all those decisions for you better than you can as well.

[viper37]

Even when they are no longer children?
Why end it at 21?

21 is the age of majority for many US states and you can't get a drink until you're 21.

Imho, in your case, the provision for having paren't permission before 21 is justified.  It wouldn't be in Canada, as the legal age of majority is 18, and anyway, parents consider their children to be infant until they start taking care of them at the nursing home.

[Berkut]

Well, it isn't YOUR fault, gosh no. It is those nasty Big Banks and their Predatory Practices that have got you into such dire straits!

So you are now denying the effectiveness of the advertising industry, and that the credit card industry's economic incentives are directly opposed to the economic incentives of their customers?

I think it is pretty clear what I am denying.

I am denyong the completely unfounded assertion that the reason people are "breaking" from credit card debt is teh "predatory practices" of banks, rather than their own choices.

In America, companies are in fact allowed to sell you things - even things that are arguably not very good for you. And they are allowed to market those things. McDonalds is allowed to show me pictures of juicy cheeseburgers, and if I buy one, it is not THEIR fault then if I become fat and unhealthy.

If you have this elusive "actual data" that shows that people in over their heads with credit card debt are not actually responsible for buying things they cannot afford, please share it with us.

[ulmont]

Well, it isn't YOUR fault, gosh no. It is those nasty Big Banks and their Predatory Practices that have got you into such dire straits!

So you are now denying the effectiveness of the advertising industry, and that the credit card industry's economic incentives are directly opposed to the economic incentives of their customers?

I think it is pretty clear what I am denying.

Yup.  That anything the credit card industry does works to induce customers to run higher balances.