On the heels of President Barack Obama's weekend radio address, where he lobbied for so-called credit card reform, "CBS Evening News" chimed in calling the legislation "help" for small business borrowers.
"Evening News" anchor Russ Mitchell referred to Obama's address about the need for new credit card regulation on May 10 and backed up Obama's claim with data from the Center for Responsible Lending, an activist organization that calls for more stringent regulation of all lenders.
"President Obama called, this weekend, for passage of his credit card consumer protection bill by the end of the month," Mitchell said. "According to a recent survey, four out of five Americans are paying lots more since December. The Center for Responsible lending found that an estimated 10 million users were hit by rate increases of at least 10 percent. And, it's not just consumers who are paying the price - nearly half of all small business owners have seen interest rates higher than 15 percent during the past four months."
CBS correspondent Michelle Miller interviewed one small business owner, Doris McMillon, who said she had difficulty getting traditional lines of credit and had to rely on her credit cards to fill a $10,000 gap.
"I primarily use my credit cards to take care of the office expenses," McMillon said. "Supplies or whatever I might happen to need."
"Payments from customers are drying up," Miller said. "So she's piled up a mountain of debt on her cards."
That "mountain" is $10,000 according to the report. Miller said that the higher rates and fees McMillon and others like her are being forced to pay are coming from banks that received "big bailouts" which she described as the "worst offenders."
"Banks, which received big bailouts, are among the worst offenders," Miller said. "Two-thirds of all card issuers have lowered credit limits and raised fees for credit card transactions along with higher penalties for late payments. The new terms have brought in $18.1 billion to financial institutions."
Banks, some of which were forced to take the "big bailouts" from the federal government, are looking for additional revenue otherwise they wouldn't have needed assistance from the federal government. In many cases they were also overleveraged - some by a 40-to-1 ratio. Still, McMillon accused her lenders of "gouging."
"I am in business to make money just like they are, but I'm not gouging," McMillon said.
Miller's solution was the legislation promoted by Obama. Thought some in the credit industry warn caps on fees and interest rates could backfire, making it more difficult to offer credit - Miller told viewers it would "help" small business and individuals.
"President Obama is pushing Congress to pass credit card reform by Memorial Day," Miller said. "The House has already passed a version which puts a cap on interest rates. A Senate bill could be voted on this week that would help individuals and small businesses alike."
A lot of financial advisers would not recommend depending on credit cards as McMillon was for her business. As CNBC Bill Griffith explained back on April 20, credit cards are lines of quick unsecured credit, but come at a high price.
"Credit card rates have always, always, always been high, I mean relative to the prevailing rates, ridiculously high for two reasons," Griffith said. "One, it helps them offset the losses they have to incur as a result of the amount of money they lend to people who can't pay it back. And, number two, let's face it - they're that high because we pay them."
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"We Support, you Comply" -
May 11, 2009 - 09:50 ET by mattm"We Support, you Comply" - CBS News
YOUR VISA IS MAXED
May 11, 2009 - 12:16 ET by reelman46YOUR VISA IS MAXED
This country’s new leaders recently pumped up the spending on your VISA to the point we (yes, we) are 9 trillion in debt.
When will this borrowed money be paid back?
We know you will pay it. Yes, you will.
Enjoy your paycheck size because its taking a hit.
When are voters going to learn that when the socialists take over you are going to pay and pay?
Apparently Jimmah Carter taught voters nothing. Suckers.
Doug Schexnayder, Ph.D. (theconservativecrawfish)
Another Takeover
May 11, 2009 - 10:20 ET by slickwillie2001The Bamster plan on this is to force 'consumer protection' laws on the credit card companies which will so damage them that they will become financially insolvent. Then, the gangster administration will make them an offer they can't refuse. Once bailed out, they are beholden to the thug administration and have to submit to control by government.
We are seeing a slow implementation of fascism by bailouts, one industry after another.
credit card debt
May 11, 2009 - 10:25 ET by iveseenitallThe credit card companies are taking advantage, for sure. But does anyone even think about telling Americans to be sensible with their spending? Nah! I watched a little of Geraldo last night. He seemed incredulous that one of his guests never smoked dope and found little need to do so. How could that be? Doesn't everyone overspend, smoke dope, and whore around? "Liberalism" truly is a mental disease.
NEVER,NEVER trust a "liberal"
"The credit card companies are taking advantage, for sure..."
May 11, 2009 - 14:08 ET by Mr XThey sure are, I have had many run ins over the years with credit card company's, from sitting on a payment so as to get late fees(happened many times), to raising interest rates for NO REASON(just happened) went from 7.99 to 23% with out even telling us. I could go on with all the unscrupulous practices CC company's have.
Bottom LINE, I am glad to see ANYBODY clean this industry up, because it sure needs it.
there is a simple way to avoid credit hassles
May 11, 2009 - 16:46 ET by UndercoverConservative"Neither a borrower or a lender be". Pretty simple.
I have a load of CC debt, but I know it's there, I know what I signed up for, and I keep a close eye to see what they're doing. No one forced me to sign for it, I made a choice to accept the terms, risks and responsibilities. It is not government's job to decide what is now "unfair" when all CCs were following all the legal rules set in the past.
Going after CC companies is populist rabble-rousing BS. Making sure people who were too desperate for the newest large screen TV don't have to pay the interest they agreed upon, protecting people from making their own poor choices, is NOT the role of the Federal Government. At best, if it is EXPLICITLY requested and voted for by the population of a State, *only then* should there be any "reform" on a private industry.
Because going after banks and CC companies is based on ideology. Otherwise, they need to go after the obscene profits the Movie and Music industry are making. Why should some guy who belts out a song written by someone else "be allowed" to make more money than the guy who designed the amplifier system he used to deliver the concert? Or the building that the concert and many other events are held in? etc...
if record companies and Hollywood can charge whatever they think they can get away with, then CC companies should be free to do the same. And we should always be free to choose *not* to use their products or services.
WWW.GS2AC.COM. 2nd Amendment Grass Roots Action in the Bay Area, CA. We're not all "Breakfast Cereal" folks here! :)
"One, it helps them offset
May 11, 2009 - 10:29 ET by HypocriteHater"One, it helps them offset the losses they have to incur as a result of the amount of money they lend to people who can't pay it back..."
It always annoys me when I hear commercials for companies that help people lower their credit card debt where they can pay pennies on the dollar. I've been irresponsible in the past with credit card debt, but I sucked it up and paid it back dollar for dollar, and then vowed to never let it get out of control again, which it hasn't. So I had to sacrifice new clothes and various other luxury purchases until I paid off my debt. It hurt, but it taught me a lesson.
And all these higher interest rates and late fees that I had to pay were in place to make up for people who took the easy way out by going to these debt-reducing companies or who just bail out on their payment obligations altogether without caring one bit how it affects their credit rating.
What do you want to bet that a majority of people who choose this route turn right around and build up credit card debt again.
I was the same way when I was 18....
May 11, 2009 - 10:54 ET by NavyBuckeyeI had one credit card and a few store cards. I would run up the debt...not pay for awhile then pay a little. I did this until I saw my balance rocketing up until they were maxed out.
Then my supervisor in the military got a hold of me....wringed my necked and knocked some sense into me. I power paid my way out of that debt and have been on time since.
“Were it left to me to decide whether we should have a government without newspapers or newspapers without government, I should not hesitate a moment to prefer the latter” - Thomas Jefferson
Ah, yes. To be young and
May 11, 2009 - 13:27 ET by HypocriteHaterAh, yes. To be young and foolish with a credit card are a deadly combination!!
but..sacrifice is BAD!
May 11, 2009 - 16:52 ET by UndercoverConservativesacrifice is something only religious wingnuts do! Why do you hate America so much?
-sorry couldn't help myself. Had to watch two delivery vans dropping off new furniture and big TV's to "assistance" and "section 8" clients down my street yesterday afternoon. It was as bad as tax return time...and yeah, cash assistance folks get taxes taken out like income tax and get back whatever the system allows which is usually most of it. And as a tax refund, it's not limited by the State on how it can be spent. So people who can't take care of their own survival buy their kids gas powered minibikes, iPhones, or a new flat screen TV. This allows a rather (combined with what is made selling unlicensed pharmaceuticals) conspicuously consumptive lifestyle...ever priced a set of "dubs" for an Escalade? Sheesh!
WWW.GS2AC.COM. 2nd Amendment Grass Roots Action in the Bay Area, CA. We're not all "Breakfast Cereal" folks here! :)
UC... Like one of Rush's
May 11, 2009 - 16:57 ET by bigtimerUC...
Like one of Rush's commercial parodies quip...nothing like Bank of Amigo...
...no matter who the recipient is.
We're all paying for it now...one way or the other.
Doubling down on stupid is not a particularly good idea. ~Andrew Breitbart
Wait a minute
May 11, 2009 - 10:30 ET by tonyrich300Wait a minute, does this mean that newsbusters.org is in favor of out-of-control credit card bills? This is opposition to Obama bordering on derangement. Are you kidding? Credit card companies are milking their customers everywhere and MRC and the republican party is on the side of the credit card companies? No wonder the Republican party is getting extinct.
You simply don't get it
May 11, 2009 - 10:53 ET by iveseenitallSadly, some people just don't get it. When any debt is left unpaid by the borrower, someone else pays it. Letting debtors off the hook is socially and morally wrong. Moreover, it encourages reckless spending. No one is trying to support or justify a credit card company's usury. And everyone does things wrong in their lives. But when we go down the road of saying it is ok, as we have, nothing will improve.
NEVER,NEVER trust a "liberal"
Your Credit Card Contract
May 11, 2009 - 12:00 ET by allanfRevolving credit contracts are an unusual beast. Your lender can change your contract terms merely by sending you notice. Your continued use of the card or payment constitutes consent.
If you do not consent, you balance can be called and come due immediately. Since the terms change at the lenders discretion it is not as if you make the deal with your "eyes open".
Please tell me why such agreements should not be regulated?
Crazy
May 11, 2009 - 10:59 ET by DontFeedTheTrollsCredit card companies are milking their customers everywhere
So you think CC companies asking to be repaid unfair, but you think it is fair that the Government takes thousands of dollars from me, every year, for school tax when I am not in school, I have no kids in school, and will not in the future have any kids in school. And will send men with guns to take me away if I stop paying.
Right.
D
Keep the ILLEGALS out, join NumbersUSA to send free faxes to your reps.
"Wait a minute, does this
May 11, 2009 - 11:08 ET by mattm"Wait a minute, does this mean that newsbusters.org is in favor of out-of-control credit card bills?"
tonyrich300, this is really bad logic on your part. It's typical of Liberals(in name only) who claim that because, for example, tax cuts apply to the wealthy people who pay taxes, but not to the poor people who don't pay taxes, that means republicans hate the poor and only care about the rich. Or that people who are for a strong national defense are warmongers. etc. etc. etc.
That ridiculous type of simple-minded thinking is what got us the radical leftist government we are all now suffering under.
Oh yes, when all else fails slam the party with the
May 11, 2009 - 11:21 ET by gmaniac1the word "extinct." I think the Republicans did that back in 2000 and 2004, and the Dims did the same in the late '70's. Anyhow, enough of the cry me a river spineless psychobabble from emasculated liberal males, for lack of a better word. It's simple, if you borrow money, you pay it back. If you can't read the contract, thank a public school teacher.
When the people fear the government it's called tyranny, when the government fears the people it's called liberty!
All the 'abuse' I hear about
May 11, 2009 - 10:52 ET by Willis_Leon_JohnsonThere have been times that the credit card companies have acted with disregard for their customers.
The excuse most often heard is "The law says we can charge you higher rates..."
That does not mean they are required to deliberately damage their customer.
If you want reform, make it easier for the injured party to sue with open, plainly written laws with no loopholes for sleazy lawyers to squirm through.
But for that to happen, yoou need something other than sleazy lawyers writing the laws.
http://gjresult.com
CC bad, taxes good
May 11, 2009 - 10:53 ET by DontFeedTheTrollsSo CC companies are not supposed to raise their rates, all on the call of Obama and his minions, but the Government can raise taxes with no end in sight. All for the little people. No hypocrisy there.
D
P.S. I f you don't want to pay high interest rates, pay off your cards!
Keep the ILLEGALS out, join NumbersUSA to send free faxes to your reps.
Who cares if the CC raise thier rates.......
May 11, 2009 - 11:00 ET by NavyBuckeyeIts a free market go some where else.
Usually the ones complaining complain for a reason. If your debt is so high that you need to worry....you are probably the reason why your rate is so high.
My company just contacted me and told me that I can have a rate reduction. My current rate was too high for my credit ratio and score.
Just like everything else...its the evil companies fault.
If I owned a CC company and the Gubment stepped in....I would just stop giving out CC to those who are not top tier holders.....but then wait....the libs would start crying discrimination....
Now thats irony.
“Were it left to me to decide whether we should have a government without newspapers or newspapers without government, I should not hesitate a moment to prefer the latter” - Thomas Jefferson
No it is not a free market.
May 11, 2009 - 12:59 ET by allanfYour credit card lender can change the terms and conditions of your loan merely by sending you notice. It's perfectly legal, but very hard to say "a deal is a deal" when you don't know what the deal will be next year.
If you have a balance on several cards, moving from company to company may not be so easy. Those new companies can also legally change your loan terms.
If you are paying 26 percent annual interest, the chances of default are high. In fact you may default after you have paid in interest an amount greater than your original principal.
Can you or can you not...
May 11, 2009 - 13:55 ET by NavyBuckeyeA. Not use a credit card.
B. Change companies.
C. Transfer your balance to another card with a different rate if you are unhappy with the rates you are getting.
D. All of the above.
Since there are choices...this is a free market. Just because the people YOU ARE BORROWING FROM make the rules doesn't mean its not free.
The simple answer....don't borrow the money if you don't like the consequences.
This is just another example of people crying foul when they go beyond thier means.
I find it very funny how the tune of some of the posters here changed......because this affects them.
This is the same reasoning the Libs use to tax the rich and give to the poor.
“Were it left to me to decide whether we should have a government without newspapers or newspapers without government, I should not hesitate a moment to prefer the latter” - Thomas Jefferson
The Short Answer is No
May 11, 2009 - 17:27 ET by allanfYou wrote: "don't borrow the money if you don't like the consequences.". That's the problem. The consequences are impossible to divine upfront. That is hardly characteristic of a "free market". The borrower takes on an open ended obligation whose terms may be changed by the issuer.
You can't transfer your balance with any certainty that you are going into a better deal. You may get a good introductory rate and then bang.
In fact, the 26% interest rates are used by institutions to suck in profits often several times the original principal. Then the original principal is charged off and sold to a new creditor.
Prior to the bankruptcy reform act of 2005 the largest component of individual bankruptcies were high medical bills. Very few people would decline to use a credit card to save their own life.
Not true
May 11, 2009 - 17:34 ET by BlondeThe consequences are easily "divined" up front. If you pay your bills (or your balance).....fine and dandy. If you don't, the stakes are raised.
Unfortunately, many people are too stupid to understand the rules of the game before they engage.
As far as the "high medical bills"...that is an Obama canard.
What I truly hope is the result of this "credit crunch" is that people will learn they don't HAVE TO HAVE anything right now....the cell phone, plasma, and new car can wait.
It's a matter of needs versus wants, only the liberals have accustomed the greedy to misconstrue the two.
I hope he fails, too.
Blonde
May 11, 2009 - 18:33 ET by well99They can raise your interest even if you are paying bills on time.It happen to member of my family.It was due to medical bills.Still the bills were paid on time but because of the balance on other cards they jacked the interest rate.Didnt matter all bills were getting pay on time in full.I dont use them myself.They have those handy dandy debit cards that work wonders.
That is a situation
May 11, 2009 - 18:37 ET by BlondeThat can be easily mitigated.
If the bills are being payed on time, all it takes is a few phone calls to roll back the rate. What the credit card companies rely upon is people who are not paying attention....they change the rate, or the due date (by a day or three)....and have an automatic, non-negotiable rate change.
But the whole point is, buyer beware!
Good luck to your family member....and I agree. Viva la Debit Card.
I hope he fails, too.
Blonde
May 11, 2009 - 18:51 ET by well99Actually family member paid off the card and cut it to pieces.Funny thing they kept trying to get the family member to come back.
Blondie
May 11, 2009 - 18:41 ET by allanfMedical bills were a leading cause of bankruptcy prior to the 2005 bankruptcy reform act. I don't think banks have to be nice to people, feel sorry for people or be generous with people. That said, an open ended loan agreement whose terms may be altered at the discretion of the lender is inherently noxious. Such a practice is abhorent to the notion of informed consent. Imposition of 26% interest rate is a nearly sure fire guarantee of default.
Market based capitalism works well. That doesn’t mean that structure and standards should not be imposed occasionally on a market.
Re Blondie
May 11, 2009 - 20:19 ET by slickwillie2001The article link you just posted quotes from the bogus study which my link completely debunks. You are going in circles.
Here's the debunking link again, which points out that your "study published by the journal Health Affairs" is a load of garbage: http://volokh.com
Spare me the liberal...
May 11, 2009 - 18:23 ET by NavyBuckeyehyperbole and rhetoric....
if you don't want the high interest rates...
1. Don't borrow the money.
2. Pay your bills on time...
3. Shop around....
And the whole premise of a free market is the fact that the businesses can make their demands and you the consumer can decide if you want to choose to use it.....
Medical bills have nothing to do with it.....
And if you want to go that route...most Hospitals are willing to make negotiate payment options...
but (here's the catch) you have to take the initiative to call them first.....not wait for the late notice.
But you know keep pandering to those not willing to work ....
it worked well for Russia, Cuba, Pre-Capitalist China and it's working wonders for Venezuela...
“Were it left to me to decide whether we should have a government without newspapers or newspapers without government, I should not hesitate a moment to prefer the latter” - Thomas Jefferson
I'd be much happier if credit cards were a free market.
May 11, 2009 - 18:50 ET by allanfThe hallmark of a free market is plentiful information, and pricing arrived at by mutual consent. How does a revolving credit agreement which can be modified by only one party fit into the notion of a free market?
I'd feel much happier if credit cards were a free market, with clearly defined terms up front.
Obama vs. Capitalism
May 11, 2009 - 11:12 ET by iveseenitallAll things Barry does in regard to business have one message: "capitalism is evil". And government, his solution to everything, isn't??? We have the most corrupt government in modern history right here in the good ol' USA. Funny thing is, you know it Barry-- you hypocrite. You and your cronies won't be satisfied untill you destroy what has made us the most prosperous nation on earth-- freedom!
P.S. Hey Barry, go buy your wife another pair of those $500 sneakers. They're nice.
NEVER,NEVER trust a "liberal"
It is ironic that under
May 11, 2009 - 11:36 ET by kgIt is ironic that under Bush the credit card reform rules were passed by the Federal Reserve effective mid 2010. Then the Democrat congress delays the effective date last April. Then at the end of April congress voted for this reform.
Now Obama is pushing this as if he had something to do with it. Of course the media is busy trying to make it appear this is Obama's doings.
"DumbAssity of Dope"
good catch!
May 11, 2009 - 17:01 ET by UndercoverConservativea lot people missed that, I know i wasn't paying attention.
WWW.GS2AC.COM. 2nd Amendment Grass Roots Action in the Bay Area, CA. We're not all "Breakfast Cereal" folks here! :)
is there not a market
May 11, 2009 - 11:53 ET by katainkenthe is going to leave alone?
1. Credit card companies can be sly. I get that. But there things you can do to combat them. One is to use your card(s) wisely and to know what you're getting into when you get one.
2. Credit card companies WANT to be paid. They'd rather get pennies on the dollar rather than nothing. A relative of mine who was disabled and in the process of a long drawn out divorce was able to negotiate almost 20K in credit card debt down to about $2500 bucks (which we loaned her). Granted her credit rating pretty much sucks now but she's out of debt. Companies have to eat the costs for people like my relative everyday - and that makes it painful for those of us to pay our bills on time because they have to recoup somewhere.
What's next? Car insurance companies?
Hold on ‘cause the world will turn if you're ready or not ~ KT Tunstall
So once again...
May 11, 2009 - 12:49 ET by BaneSidheNo one has to take responsibility for their choices. Mama Gubbiment gonna come and save us all. The next couple generations are going to be more "gimme" generations....it's not gonna end any time soon
Regulate, don't intimidate
May 11, 2009 - 13:24 ET by slickwillie2001All banks including credit card companies are already the most highly regulated businesses in our country. No one questions the need for that regulation, we only question why that regulation should become anti-business and reward freeloaders. The default rate on credit cards is already outrageous, and if we change regulation to allow more irresponsible users off the hook, responsible citizens end up paying their bills. There's no free lunch.
Kind of like the Bamster's mortgage cramdown push, or his bailout of the UAW.
Beware Liberal Crap Stats
May 11, 2009 - 18:14 ET by slickwillie2001The silly story that medical costs cause a significant number (sometimes stated as roughly half) of personal bankruptcies was popularized by Michael Moore loosely based on a college study that few actually bothered to read. For instance, a bankruptcy was claimed as 'due to medical costs' if the bankrupt person had only $1,000 in debt due to medical care. They might have $100,000 in consumer debt as well as the $1,000.
Thoroughly debunked here: http://volokh.com
This all is reminiscent of the horse-hockey study of 'hunger in America' which claimed some outrageous figure for 'hungry people in America'. It turned out that if you 'went to bed at least a few times a year hungry', you were counted as a problem American, among many other distortions. How many teenagers wouldn't agree that they went to bed hungry a few times a year? Similar BS studies have ridiculously overcounted the numbers of homeless by counting adults living with other relatives as homeless, just for example. They also counted people living in motels as homeless.
When liberals quote statistics, be suspicious and paranoid, for good reason. One of the tenets of socialism is that 'truth is only what serves the cause'. They believe that it is perfectly alright to lie in order to advance the cause of world socialism.
yes!
May 11, 2009 - 18:30 ET by katainkentI looked this up today since Obama used the 50% bankruptcy stat in the health conf. press release today. As for the hunger problem in america - hulu.com has a "stop hunger" ad running on a lot of the shows we watch - we contribute to our local foodbank and we thought the statistics were overly high so we looked it up and found a similar result. Major league fibbage.
___________________________________________
Who controls the past controls the future. Who controls the present controls the past - George Orwell - 1984
What idiots really thought
May 12, 2009 - 05:13 ET by RR GOPWhat idiots really thought that when these businesses/banks received billions they wouldn't turn around and screw their customers by crying 'poverty' and muttering something about 'just business'.
These banks and businesses can run into billion dollar deficits but miss a payment or be a few bucks short on the minimum payment and all hell breaks loose.
Banking is a virtual monopoly and has been since the Federal Reserve monster was created. They use the credit rating scam in order to bilk customers by forcing as many as possible into paying higher interest rates. My point is that with real free enterprise competition, these high interest rates and other shenanigans would be a thing of the past.
Let crooked and poorly run banks and businesses go under. Those institutions with better customer service and those that provide more value are the ones that should be survive.
Most of these retail companies and banks are run by thuggish bean counters who care little about real business, their employees are often incompetent and rude (and often not even in this country when you contact them by phone) and act like they're shady deals run out of a strip mall somewhere with only a PO box as an address. But, the 'too big to fail' BS keeps them afloat.
One of the 34% who thinks George W. Bush was a great President. One of the 61% who wants to bring back the stock and pillory (yep...approval for Congress now at 39%...do you believe that!?).
credit cards
May 12, 2009 - 10:40 ET by jessieHJessie R. Hamby Just cut the cards in half, cut again & send it to the card companies.
lol
May 12, 2009 - 14:24 ET by well99You got that right.