http://www.nytimes.com/2009/05/19/business/19credit.html?_r=1&hp
Thanks for the link, it was interesting but not surprising.
Just more unintended consequences through government intervention. What else is new?
You’re welcome. Irresponsible people get themselves into trouble, government overreacts and bails them out, and then the responsible people get screwed as a side effect–the endless cycle.
I think people who use credit RESPONSIBLY will either pay off their balance in full each month or just not use it at all. The people who have good credit but still keep a balnce from month to month and or just pay the minimum due, will eventually get trapped and start getting in over their head. They’ll eventually miss pmts. and then they’re stuck with higher interest rates. If you don’t carry a credit card balance from month to month, you’ll probably just end up paying the annual fee and a small amount of interest. I only have 2 cards with relatively small balances. I plan to pay them both off within the next 2 months. Then I’ll use them just enough to keep them from lowering my limits for under using the cards. Hey, this may actually force people to stop using credit cards to finance their lifestyle. WATTA CONCEPT! :biggrin
I’m one of those pay it off every month people and this blows my mind. There is only one reason that I use my credit card and allow them to collect 3-5% from the businesses I buy from. FICO. That’s my only motivating factor for having a credit card and not just paying with my debit card. If they screw those of us who pay off our bills the government better step up to the plate and force Fair Isaac to not negatively impact a credit score from the cancellation of a credit card and to start viewing those without cards as being more credit worthy than those with cards.
Oh boo-hoo!! :crying2 Those “poor” credit card companies. Waaaaaaaa!! :crying Their lives are just so burdened! Cry me a river of freakin’ whiny tears! gag puke They are worried about covering higher costs? How about they cut the wages of the top exec’s? How about that one! Those exec’s of the credit card companies are the ones, whether directly or indirectly, that allowed credit cards to be issued to people with piss poor credit habits. How about cutting out the corporate jet? The key to the bathroom with gold plated toilet bowl seat? The “business” trips to the Bahamas? How about if they make the top exec’s to work down in the phone support pits and only pay them the same wage as the phone support people. That will cut costs in a hurry.
Here’s an idea for protesting. A far fetched idea, but still fun to think about. How about if everybody that has a credit card just maxes the thing to the hilt. Then, no one make any more payments. Kinda like going on strike against the credit card companies. Granted, your credit score will take a hit, but everybody’s score will take a hit. It will level out the playing field and they’ll have to re-adjust what is and isn’t a good credit score. Like in college: grading on a curve. After a few months, almost everyone will be at “excellent” credit score - according to the curve. Take that FICO!! :banana Of course, this only works if everybody does it. That is rather far fetched.
Most likely, just quit doing business with the credit card companies that jack fees. Then, they’ll be stuck with just the bad credit users anyways. Hope they have fun with that! :eviltongue Eventually, capitalism will kick back in, and the credit card companies that offer the greatest perks will pick up the business of those that left the stingy companies. Actually, this would probably be an excellent business startup idea. Imainge, if you are the only credit card issuing company that offers no annual fees? You’ll take away huge customer loyalty from Bank of America, Citigroup, et. al. Now, this new law only applies to U.S. credit card companies. Most likely, we’ll start seeing foreign credit card companies starting to issue all kinds of perks to pick up the disgruntled customers.
Dean
Dean,
There is no good present solution at hand.
“”“Most likely, just quit doing business with the credit card companies that jack fees.”“”
If you do this you are screwed as your credit score will drop when canceling the card. It will be either pay their yearly dues or cancel and lower your score. That is the screwed up thing about it. The state governments should have never let these thieves harm your credit from dropping their card anyways. In all actuality, those who don’t have cards are more credit worthy than those who do unless we are talking about those who do for the sole purpose of using it as a tool to boost their credit.
Here’s a thought… How about paying cash for things. If you have to use a credit card, keep the balance small and pay it off each month. You may have to pay a $50 annual fee and a little interest. This way you can keep you good credit and not have to pay an arm & a leg. When you really think about it, if you NEED your credit cards to pay for things, you can’t afford them. If you don’t NEED to use the card…dont… There. Problem solved. Time for a beer! :beer
Here’s another thought. I always pay off my credit cards every month and don’t want to pay a single dime to them for any annual fee, etc. Government tells FICO that they can no longer punish people if they close a credit card account in good standing.
I shouldn’t have to pay them to maintain my excellent credit.