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Came across this Credit Card experience "Legalized Loan Sharking"
I’m not much different from a lot of people. Not long ago, I had a credit rating of 755, all my bills were paid on time, and I had no credit card balances outstanding. Then suddenly, I found myself out of work for over 6 months at the age of 39, with two kids in tow (ages 9 and 11). While interviewing for “career positions”, I even tried a stint at Starbucks to tide us over.
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The only full-time job offer I received after a diligent search was for a commission-only career position that at least showed promise. I had no option but to take it. While trying to build my business, put food on the table and keep a roof over our heads, I soon had to start using my credit cards, and rapidly maxed-out my $5,500 in available credit.
.
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Fast-forward three years, and that $5,500 turned into $14,000+ in debt. My student loans, which were approximately $42,000 when all of this started, ballooned to $69,000 from late fees and penalties
.
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Trying to figure out how I could have gotten into this situation, I examined my credit card statements more closely
.
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To my utter astonishment, I discovered that I was being charged between 22% and 29.5% on all of my balances. This included one card, Care Credit (owned by G.E. Money Bank - hey, why stop at war profiteering?), which is intended to help people stretch out payments for dental and other medical care.
.
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Isn’t there a term for near-30% interest on loans? Something like, “loan sharking”? “Usury”??? Does the mafia even charge this much?
.
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Conservatives want to deny or ignore the fact that the working poor are using credit cards to provide for necessities - not merely niceties - for their families. A 2005 survey targeting low- to middle-income wage earners entitled “The Plastic Safety Net” found that these families resort to credit cards to cover their lack of health insurance, retirement funds, and unemployment coverage, not their Aspen ski trips.
.
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As if things weren’t already hard enough, the credit card companies got a big gift from the Congress via the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. (FYI, Biden voted for it; Edwards, Obama, and Kucinich voted against it. Polling data must not have been out in time for Hillary to take a stand.) Don’t let the title fool you: it’s another one of those Orwellian “black is white and up is down” gifts bestowed upon us by BushCo. It gave the credit card companies permission to double your payments in order to change the time required to pay off your balances to 10 years, instead of 20, if you made minimum payments. Trouble is that many people were already hard-pressed to make minimum payments before they doubled.
Another gift to corporate finance woven into that “Consumer Protection” Act was the newly-granted right of these companies to raise rates to usurious heights, and add draconian late and over-limit fees. Horrified yet? Wait — there’s more. If you happen to fall behind on one card, the rates for ALL of your cards can now be bumped up to these stratospheric levels! I kid you not, this even happens to people who are NOT in dire straits, and don’t have bad credit, but simply forget about a payment and get caught in these nets!
In an appreciative nod to their contributors at the banks and credit card companies, Republican legislators also tightened bankruptcy laws. So now, you’re really out of luck if you fall on seriously hard times. Oh - and don’t forget that most people who get in this deep do so because of the expenses associated with a catastrophic illness, a divorce, underemployment, or unemployment.
.
.
The only full-time job offer I received after a diligent search was for a commission-only career position that at least showed promise. I had no option but to take it. While trying to build my business, put food on the table and keep a roof over our heads, I soon had to start using my credit cards, and rapidly maxed-out my $5,500 in available credit.
.
.
Fast-forward three years, and that $5,500 turned into $14,000+ in debt. My student loans, which were approximately $42,000 when all of this started, ballooned to $69,000 from late fees and penalties
.
.
Trying to figure out how I could have gotten into this situation, I examined my credit card statements more closely
.
.
To my utter astonishment, I discovered that I was being charged between 22% and 29.5% on all of my balances. This included one card, Care Credit (owned by G.E. Money Bank - hey, why stop at war profiteering?), which is intended to help people stretch out payments for dental and other medical care.
.
.
Isn’t there a term for near-30% interest on loans? Something like, “loan sharking”? “Usury”??? Does the mafia even charge this much?
.
.
Conservatives want to deny or ignore the fact that the working poor are using credit cards to provide for necessities - not merely niceties - for their families. A 2005 survey targeting low- to middle-income wage earners entitled “The Plastic Safety Net” found that these families resort to credit cards to cover their lack of health insurance, retirement funds, and unemployment coverage, not their Aspen ski trips.
.
.
.
As if things weren’t already hard enough, the credit card companies got a big gift from the Congress via the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. (FYI, Biden voted for it; Edwards, Obama, and Kucinich voted against it. Polling data must not have been out in time for Hillary to take a stand.) Don’t let the title fool you: it’s another one of those Orwellian “black is white and up is down” gifts bestowed upon us by BushCo. It gave the credit card companies permission to double your payments in order to change the time required to pay off your balances to 10 years, instead of 20, if you made minimum payments. Trouble is that many people were already hard-pressed to make minimum payments before they doubled.
Another gift to corporate finance woven into that “Consumer Protection” Act was the newly-granted right of these companies to raise rates to usurious heights, and add draconian late and over-limit fees. Horrified yet? Wait — there’s more. If you happen to fall behind on one card, the rates for ALL of your cards can now be bumped up to these stratospheric levels! I kid you not, this even happens to people who are NOT in dire straits, and don’t have bad credit, but simply forget about a payment and get caught in these nets!
In an appreciative nod to their contributors at the banks and credit card companies, Republican legislators also tightened bankruptcy laws. So now, you’re really out of luck if you fall on seriously hard times. Oh - and don’t forget that most people who get in this deep do so because of the expenses associated with a catastrophic illness, a divorce, underemployment, or unemployment.
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