Re: Can playing covers get you sued?


"Jim Carr" <newsgroups@xxxxxxxxxxxxxx> wrote in message
news:qvrVh.530969$Ju2.115369@xxxxxxxxxxxxxxx
"Mike Rieves" <mriev@xxxxxxxxxxx> wrote in message
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I don't have a problem with credit card companies giving high risk
people credit at higher interest rates, I do have a problem with them
encouraging those people to charge everything, and run up lots of debt.

And just how do they do that? Mike, businesses struggle just to get people
to buy their products and services. They put ads on TV, radio, newspapers,
magazines, Internet, and so forth, yet many go out of business every year.
How exactly are credit card companies magically getting people to not just
spend money, but to overspend themselves into bankruptcy while K-Mart
struggles for business?

Have you been in a K-Mart lately? If you have, you know that every
associate is trying to get you to apply for a Sears card. Same thing at
Sears, associates have monthly quotas on Sears Card credit apps. Why?
Because City Bank (who now owns the Sears Card business) pays Sears for
every app.

I have a problem with them charging such exorbitant interest rates that
the interest is what takes the debt over the top and produces problems for
many people who would not have problems paying off their debt if the
interest rate was lower.

If you're honest with yourself, you know that credit card companies don't
want people to pay off their balances every month, they don't make any money
that way. They want you to string out the payments as long as possible so
they make money on the interest you pay. Credit cards now have default rates
over 30%, do you think that is a fair interest rate?

First off, Mike, nobody is forcing anybody to partially pay off their
credit cards. If you pay it off in full every month, you're not paying any
interest. Second, interest rates are commensurate with your credit rating.
You want low interest rates? Fine. Maintain really good credit.

Sure, but how many people pay off all their cards every month? Obviously
most people don't, that's why the credit card business is so lucrative.

Furthermore, it's not the interest rate that is the problem. If you have
$1,000 you want to pay off in a year, the payments would be $88 at 12%
interest and $93 at 22% interest. Please don't tell me that this $5 is
keeping you in debt. It's the continued *spending* that gets you in
trouble.

Right, but when you're paying 25 to 30% interest, it reduces the value of
your money by that much, and if your income is marginal, it can make the
difference between barely getting by and going deeper into debt. I agree
with you about not spending more than you can afford, but when have you ever
seen a credit card ad that says anything about that. I'm just sayonmg that
the credit card industry takes advanatage of the fact that many people don't
know how to balance a budget and not spend more than they make. Is that
illegal? No. Is it unethical? Make your own judgement on it.

also have a problem with them using their political power to change the
bankruptcy laws so that many of those who really need debt relief cannot
get it.

Can you be more specific? Pretty much the only new provision that seems at
face value to not be such a great idea is that they calculate your income
based on a six month average rather than what it is now. If you're
unemployed, that really sucks. But in all fairness just because you are
unemployed now doesn't mean you will be in six months, so why shouldn't we
look at reasonably expected future income when doing the means test?

Ever listen to Dave Ramsey? I'm pretty sure his syndicated program is
broadcast in Phoenix. He campaigned against the new bankruptcy revisions and
he explained it far better than I ever could.

I think it would be fairly easy to look at what a person buys with credit
cards and decide who is financing a frivolous lifestyle and who is just
trying to survive. Why not set things up so bankruptcy courts can make
those judgements?

Fairly easy? Nope. I'd say exceedingly difficult to administer.

Well, if the cards were used mostly to pay medical bills and for
prescription drugs, I'd say that would be a fair indicator that the card
wasn't used frivolously. If the debt was mostly on luxury items, I would
call that irresponsible spending.


.

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