Any thoughts on what the upcoming doubling of credit card

[rzemanfl]

minimum payments will do to the economy? I think it may lead to a lot of people taking another bite out of their notional "home equity" before the housing bubble bursts. I also feel that it will slow consumer spending, especially with gas prices so high.

Please don't answer this by bragging about how you pay off your balance each month and get airline miles or whatever. The people I'm thinking about aren't you, but the paycheck to paycheck types.

[mikehiggins]

1. It will be a total disaster across the board

I really believe the Kapitalists have given up on the US and are trying to squeeze every penny they can out of the general public while there still are pennies to squeeze.

And of course, they cannot see any dire consequences to them in all this.

Just like Marie Antoinette

[AlienGirl]

40. It sure looks that way... nt

[JuniperLea]

2. screeching halt!

that's what will happen! although 'some' people pay off debt monthly, 'most' do not! there is a huge difference between a $200 payment and a $400 payment for most people. i can see this easily crippling the available disposable income of many, many families and individuals. not everyone is smart with credit. this could further divide the classes, sending a bunch of people to the poor house!

[zipplewrath]

44. Not sure you can back that up

Last time I saw any data, "most" people do pay off the balance monthly. 60% or so pay it off each month. It's a slippery statistic. If you pay it off 7 out of 12 months, you pay it off the "majority" of the time. Even though "most" people may let a payment slide once or twice a year, they ultimately payoff the debt within a couple of months and pay the balance each month otherwise.

[Fiona]

3. it will have two conflicting results...

in the short term, it will be a terrible crunch for people who are over-extended.

In the long term, it help people to pay off their loans earlier (thus paying less interest) and will prevent many of them from getting overly deep into CC debt.

A mixed bag, certainly.

[rzemanfl]

6. I think that a lot of people will find themselves short of the monthly

nut, take the grocery money to pay the credit card bill, then charge their groceries, perpetuating the trap they are in, but allowing the card companies to look like "good citizens."

[HockeyMom]

7. They will start garnisheeing more and more paychecks

resulting in more people struggling to pay for their basic needs (housing, food, GAS, etc.). This is will a boon for the collection agencies and attorneys.

Fortunately, I have some money set aside. I am going to pay them all off in total and cut them up.

[hobbit709]

10. Can't garnish for that

here in Texas.

[rzemanfl]

18. They shoot you for being in debt in Texas, right? n/t

[Mountainman]

12. You forget that people will go right back to using the available credit

on their cards.

What it will do is force people to eat less and pay more interest.

[Fiona]

17. Some people, yes

I think I acknowledged that. It will, however, cause more people to pay LESS interest.

[catnhatnh]

4. Okay....

...this is just a demonstration of the next ring of Hell. Having achieved their interim goal of passing the bankruptcy "reform" bill credit companies now would like to force a small percentage of their debtors into the courts to demonstrate to ALL borrowers just how fucked they are.All part of the neo-con carrot and stick,stimulus/response training...lesson learned all debtors will now straighten up and fly right to avoid the fate of the unlucky few....credit card companies start adding higher interest and small fees while terrified high debt consumers recoil in horror from confronting the credit companies who have demonstrated what they CAN do....

[acmejack]

5. It will be absolutely disastrous for people already squeezed.

A whole bunch of people are going to lose everything, thanks to the bankruptcy bill. HP today is reneging on their pension plan. No more company matching.

I don't know what a sizable portion of the population is going to do. One thing is certain, they're going to be pissed!

[cbear70]

8. that would be me..

I am scared out of my mind...working so hard but still only paycheck to paycheck... everytime we try, we have a major medical bill that knocks us back down. We have been in major debt since our daughter died and I almost died. We weren't wise, did alot of grief spending on our other children, my husband had to take care of all of us so he fended the best way he knew. I couldn't cook because I was recovering, he bought dinners, he didn't work for a month because of the funeral and me.... it was so stupid but it is what it is.. please no lectures. I have been trying to find a job but this stupid economy has no place for a stay at home mom. I have gone on countless interviews, we are so screwed. I sat and cried at the news today. When they double, I have no idea what will happen. We are over squeezed.... and whats worse is that we had a medical catastrophe happen 7 years ago that forced us into bankruptcy. I swear we have had so much happen that it seems riduculous.

So I am not sure what we are going to do.

[rzemanfl]

9. You have my sympathy. When I practiced bankruptcy law I

called it "America's substitute for National Health Insurance." It is a crime that situations like yours exist in this country. Welcome to DU and good luck.

[faithnotgreed]

13. im so sorry cbear - if this is all basically medical related can you

file bankruptcy again
i have no idea of any laws im just asking

our best wishes to you and your family
hugs

[cbear70]

15. Thank you

Thank you both... we are trying so hard to avoid it, I continue to look for a job in the hopes there is someone out there who will give me a chance. But its looking really bad now with the new payments going into effect.. not sure .. maybe we will have to.

[faithnotgreed]

24. sometimes you just have to do what you have to eh

no shame at all and no one here (i hope) would lecture when you were reacting understandably to a daughters death
and we are all sorry about that as well

i dont know if this helps or if you already know about it but there is a jobs listing here on the board

best wishes cbear. a lot of people are struggling so we are all in this together

[sendero]

35. All you can do....

.... is keep trying. I'm sending good wishes your way, dark clouds never last forever!

[Tux]

16. Good luck

As a psychologist (can't really call myself that due to APA's view that bachelor degree holders are scum) and a computer/network technician, I can say your situation sucks. With more jobs being trashed or moved to India (CAFTA won't help), people may wake the fuck up and start to change things.

I hope you find something. I am trying but I can't even get interviews. I think I may have been blacklisted. Is there a way I can find out about that?

[zinndependence]

27. I'm so sorry...

I don't even know what to say other than try to stay strong.

You are not alone with regard to serious financial difficulties. I know so many people who have had to resort to bankruptcy (many of whom did so because of unpaid medical bills.)

My husband was hurt several years ago and we've been embroiled in a worker's comp lawsuit FOREVER! I've been trying to pay our bills which has been very difficult. In June, due to budget cuts, my position was cut (I taught high school social studies.) Out of shear desperation, I spoke with an attorney about bankruptcy. I still haven't told my husband. (I filed personal bankruptcy.) I am afraid he will totally freak out. We have discussed bankruptcy in the past and he was always totally against it. I just couldn't do it alone anymore. I felt like I had no other choice. I tried a consumer debt consolidation company for two years - my monthly payments were $743. We didn't have any money left for food! Anyway, I just wanted to let you know that I sympathize with you. Also, I am very sorry for the loss of your child.

[aspberger]

36. YOU ARE NOT THE LONE RANGER

you are not alone. The pain from financial worries, I know all about that. Just do the best you can and make up your mind to stay together as a family. Sometimes life comes crashing in on you and on top of that we have politicians who care more about the royal family of saudi arabia than rank and file American families. Hold your head high. It is not your fault.

[grasswire]

45. may I suggest selling unwanted items on eBay?

Perhaps you have already considered this, but an amount of emergency cash can be raised within days by selling things you might have in your home. Knick-knacks, old wedding presents, brand-name clothing, all manner of things that are in good condition can be converted into cash. You literally can have the money in your hands within a week.

EBay can also be used to start your own internet-based retail operation. An eBay "store" is open 24/7 and makes your goods available to the whole world with just a few mouse clicks and no investment. I've been selling on eBay for eight years. It has been a godsend.

[ProudDad]

59. DON'T PAY THE MEDICAL BILLS

I won't if I ever have to go to the hospital.

Fuck 'em. Until there's single-payer, screw the bastards...

[fberknm]

11. Did banks support this?

I haven't heard about this, so I am a bit in the dark. Seems to me that they maximize profits if they minimize the ratio of payments that go to principle. Why should they want to increase minimum payments? Credit cards are the last place where interest rates are still high.

FWH

[cbear70]

14. I heard

today on GMA that the government actually did this... I was shocked :sarcasm: but actually didn't realize it until I heard today..

[OneTwentyoNine]

30. Well hell yeah,did it for the Credit Card companies--as in late charge..

Hell that $29.00 late fee is the biggest rip off going and credit card companies make millions off of it.Double the minimum payment and some people will have two choices,write a hot check or wait and get nailed $29.00.

Here's hoping that a million freepers are the early casualties of this bull.

[Zorra]

26. Yes, banks are the "entities" that instituted this policy. n/t

[tx_dem41]

28. Consumer advocate groups are supporting this as well. n/t

[Zorra]

34. Really? That seems odd. Do you have a link to a consumer advocacy

group that supports raising minimum credit card payments? I tried to find one but was unsuccessful.

Thanks!

[proud patriot]

19. It's going to hurt a lot of people

while I think paying off debt sooner is a better thing
they should eased into the increase a little slower IMHO.

[rzemanfl]

22. Absolutely agree. n/t

[Zorra]

20. A lot of children will no longer have enough to eat.

A lot of poor people will have their lives and families destroyed.

And a lot of banks will be taking poor folks' belongings and driving them into homelessness after forcing them into bankruptcy.

This is exactly what Bu*h and the rest of the fascists want.

[peacefreak]

21. Heartbreak situations.

I spoke with someone today that is paying $175. PER card. She works in a dead-end retail job & has resorted to using her cards for gas & food. As usual the people who can least afford it will be hurt the most.

[rzemanfl]

23. That's terrible, I use my card for gas because I always fill my

tank and a lot of the stations here are pre-pay if you don't use a card, which is a pain in the ass.

[ProudDad]

60. Use a debit card

That's what I do. I don't have any credit cards...don't ever need one.

[rzemanfl]

65. Then I have to remember to write it down. My Metro only takes

about ten or twelve bucks at time even at today's prices.

[KansDem]

25. Crime will rise...

Two reasons: (1) The prospect of financial ruin will lead many to look to criminal acts as a way of keeping themselves out of debtors' prison, and (2) with the criminals in the White House pulling the shit they're pulling and (apparently) getting away with it, who's going to argue "morality" and "ethics?" Who's going to argue with success?

[zinndependence]

29. I haven't heard about this...

Can you tell me more?

I'm in total shock. How in the hell are people going to make double payments. Obviously most people who use credit cards use them because they don't have money to buy (food, gas, clothing, etc.) to begin with...

Last month I spoke with an attorney about bankruptcy (see earlier reply.) If I hadn't done so then, I surely would have to now! There is no way I could make double payments, nor could most people I'm sure!

[NMDemDist2]

31. IIRC it was part of the "bankruptcy bill" it was put in because now the

payments the banks ask for as minimums won't pay off the debt for years and years

this was the congress' idea of how to "help" people get out of debt faster

[rzemanfl]

48. I think people will slowly reach a level of debt they can afford to

pay four percent a month of and then stay there, which pretty much defeats the purpose of the law. It is really going to screw people with fluctuating incomes.

[ProudDad]

62. Even doubling the minimum

won't pay off the debt. The interest rates are too damn high.

There were attempts by the dems to add an amendment to cap CC rates at 30% (!!!!!) by Kennedy and others -- it was voted down.

[Sugarbleus]

67. I heard this yesterday..I thought it was only one or two

cards resorting to this (CitiCards)? Please inform me. Is it for ALL cards then?

We live from check to check. I try to NOT use my cards unless it's for something extraodinary....like motel reservations, catalog purchases of clothes, auto repairs, or dentures that medicaid and medicare won't pay for etc.

Doubling the minimum due will be a harmful thing to many people, no doubt!

What is the GOAL of such measures anyway???? Does the GOP want to cut off credit for all but the wealthy? Do they want to kill off credit period? Seems like the Credit card companies are the ones who would suffer........not getting their exhorbitant interest fees from "installment" payments...especially if people STOP using credit cards.

What screwy ideas. I don't get it. :crazy:

[halobeam]

32. I think I understand that the interest paid in the long run will be less

which doesn't actually suck. What I don't understand is, will they apply this "doubling" to past due, or apply it to what is a new purchase/debt as of a certain date? I hope it's the latter, but I suspect it's the former.

[cosmicdot]

33. more foreclosures?

what affect does the Fed raising the interest rate higher little by little over time do those with ARMs? I think in many households every dollar is crucial ... many certainly don't need extra strain on the budget w/minimum payment changes ... just adds fuel to the fire ... and, some creditors have gone to raising the finance charge, as a penalty, if the minimum payment isn't made by 5 p.m. on a given date ... inflation is hurting people even if the gov't ignores the costs of housing, food, and energy in its numbers ... people need to be cognizant of the Check 21 Act, 2003 which helps to clear checks quicker ... anyone floating a payment hoping for 3 days to clear, might find a late payment charge + the finance charge increase ...

... another gift from our corporate american congress ... the Check Clearing for the 21st Century Act House ... couldn't find Senate vote ... just that it passed by Unanimous Consent.

how many people are 't h i s c l o s e' to the edge?

i fear too many

in the long run -- perhaps a new New Deal is around the corner -- just who will LEAD us out of this mess?

as far as people being able to pay off credit faster ... well, a lucky few might ... but, with the astronomical finance charge rates ... it won't be easy for many

thanks for a great thread

[fortyfeetunder]

37. The economy will be screwed

I think with energy-driven inflation, people will be hard-pressed to spend disposable income on intangible items. It will undoubtably force people to wean themselves from credit cards if they haven't already.

But the problem lies with those who rely on credit for everyday transactions. This is not a good thing.

In the end, debtor's prisons come to mind.

[Singular73]

38. Most people have no idea

of the upcoming economic devastation on the middle class.

Oh well. Lots of folks(hell, even Greenspan), have been warning about this for a long time.

That said, this is a good thing.

paying $3126 for a taco you had 26 years ago is not wise spending...

[Humor_In_Cuneiform]

39. When does the new bankruptcy law take effect

which then also becomes the deadline to have filed under the old law, which is much easier?

Not sure how far along in the process someone must be by the time the law changes etc.

Anyone know, just for general information for anyone considering it?

And as a reminder that there are deadlines.

Sometimes I wonder if they are trying to create the wholly disastrous economic conditions for our general populace, similar to the state of things in late 1930's Germany.

And on a different topic, why does Rove have dual citizenship US and Germany?

[Vinca]

41. You know what I hope happens?

I hope everyone tightens their belts to the max, only uses their cards when it's an emergency, and the credit card companies wake up and realize that if they screw their customers they screw themselves.

[Pepperbelly]

42. I think they will end up cutting off their nose to spite their faces.

They are making money primarily because of the marketing of their tickets to debt. With both the new bankruptcy provisions and the more draconian policies of the CC companies ... their combination advesarial activities vs. urges to SPEND! SPEND! SPEND! I believe that they will end up making far less money than before.

I hope these corporate slush-funders hurt as a result.

[Mountainman]

43. Did anyone in the repuke congress say, "Hey let's help people out by

bringing back the consumer interest deduction on federal income tax?" Or how about, "Hey let's help people out buy forcing the credit card companies to lower their interest rates thus making the minimum payment go more toward principal rather than interest?"

Noooooooooooooooooooooooooooooooooooooooooooooooooo!
They say, "Let's lie to the people and tell them that we are helping them out by making the credit card companies more money!"

Folks, this is not the way to help people who can't make ends meet now. Gas will be going higher, housing will go higher. Wages are going down. You can't keep squeezing people and them them it's good for them.
Anyone here who things this is a good idea doesn't live hand to mouth I think.

If the repukes really wanted to help people they would force interest rates on credit cards lower. You'll never see that.

[Skidmore]

46. Perhaps this is the only way to free people from

these bloodsuckers and bleed the corporate mafiosos at the same time. You can't expect people to behave like free people and stand up for their rights when they owe the corporations. Those credit card companies are the new version of the company store. I'd like to see them go under.

[1932]

50. So true. All through history, debt has been used to enslave free people.

I was just reading a book about what they did throughout Africa even after apartheid governments came to end. Debt was used to replace legal slavery and the results were the same.

[ProudDad]

64. EXACTLY

they are the 20th/21st Century version of the company store. You hit the nail on the head with that one!!!

[nickinSTL]

47. For me...

it'll mean I'll only be able to pay the minimum.

I usually pay as much above the minimum as I can afford. I won't be able to afford to pay above the minimum when this takes effect.

[1932]

49. It's good if it encourages people to go into less debt.

I'd like to see less of the massive transfer of wealth from people who work to huge Wall St banks in the form of the usorious interest rates and fees they charge for consumer debt.

[rniel]

51. over 21,000 dollars here

On credit card debt. I'm screwwwed!!

[ArkDem]

52. You were screwed long before the policy changed.

[Demobrat]

53. If the extra money is applied to the principal

and not the interest, it will help people get out of debt faster and pay less interest in the long run.

If your are making only your minimum payment on a regular basis you are treading water. Personally, I don't think it should be legal to allow people to pay only interest every month. That's how you end up supporting the credit card companies, and paying triple for the things you buy.

[ArkDem]

54. I don't think the companies would be in business to lose money.

[Demobrat]

55. Not sure what you mean.

Of course they are not in business to lose money. That's why the allow their customers to make minimum payments that are so low they cover virtually only interest. They love it when you pay those minimums. It means your balance doesn't go down.

Paying down your principal hurts the credit card company, not you.

[ArkDem]

68. Duh, that's why you pay the interest. They aren't going to allow

you to pay down the principle and not the interest.

[1932]

61. I read The Working Poor which describes a Cleveland tool and dye company

which operated on a 3% profit margin. The owners only paid themselves 150,000 salaries and something like 65% of the money they made went to paying the wages of their employees who probably made in the 30,000-65,000 range.

That's what the vast majority of companies are in business to do -- make enough money for the owners to be comfortable, and spend the rest of their time and money making products people buy of their free will, and trying to make the lives of their employees rewarding and happy.

Credit card companies are sometimes making in interest profits two or three or four times the amount they loaned out.

Sometimes wrong with that.

[1932]

57. One slight correction:

If you're paying only the minimum, it's possible that you might never pay off the debt.

A mathmetician or economist can correct my math, but say you're only paying 2% every month -- if your interest rate is close to 24% and you pay a few late fees or bounced check fees, it's probably really easy to be opening your credit gap rather than closing it.

I remember reading about someone who only had something like 2,000 in purchases on a credit card, but, over a ten year period paid over 15,000 in fees and interest because of paying the minimum plus missing a bunch of payments, and she still hadn't paid off the card.

[Demobrat]

63. If you are paying only the minimum

and racking up late and overlimit fees you are definately going deeper into the hole each month.

This is the first I've heard of this doubling of minimum payments, but having worked for a credit card company all I can say is that I bet they fought it tooth and nail.

[ProudDad]

56. PAY THEM DOWN NOW!!!

No one should use a credit card for a "loan"! These things are obscenities.

If you can afford it, pay it down. If you have too large a balance but own a house, refinance or get a 2nd and PAY THE CARD. You'll pay a lower interest rate and will get a tax break on the mortgage.

DON'T USE CREDIT CARDS FOR CREDIT!!!!!

Evil, evil, evil....


Get a debit card.

Move your money to a Credit Union, away from banks! Starve the BASTARDS!!!

[raccoon]

69. I second your suggestion

"Move your money to a Credit Union, away from banks!"

I've banked at a credit union for years. Generally, their service charges and fees are much lower than banks.

[ProudDad]

58. This is a direct result

of the bankruptcy bill just passed.

They are putting the squeeze on the poor, the folks who CAN'T pay off their card debt in order to pump their bottom line.

These bastards should all be hung by their balls with piano wire... As should any Senator and Representative who voted for that piece of crap "bankruptcy bill"....

[FrenchieCat]

66. My first thought?

Thank you Senator Biden?

He'll have to tear my vote out of my dead cold hand.....if he even gets close to the nomination....