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Valued Contributor
Posts: 1,185
Registered: ‎03-04-2008
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Re: New Credit Card Laws!


Pappy214 wrote:

 I think everyone needs a chance at a good credit card


Everyone has a chance. But not everyone is qualifed. Most everyone can get a credit card. You have to earn a good or excellent credit card. That takes time, plus the inclination to do what is neccessary to improve your credit standing. Not having a credit history, for whatever reason,  is not a recipe for credit success.

Regular Contributor
Posts: 246
Registered: ‎01-25-2008

Re: New Credit Card Laws!

I agree with you on the bailout !  I myself will never buy American again GM is poor quality my honda is very reliable and cheap on gas. GM needs to shut up and quit laying the guilt trip on Americans to buy American when 80% of their cars parts are not American and Most of their cars are built in Mexico and Canada so whats so American about that when my Honda was built in the USA !!! Oh and the Credit Card Companies and Banks need the regulation if certain regulations were in place maybe people would still have homes to live in but we let certain companies Jack up fees and rates to where you can't afford to live Just so some CEO's can make big bonuses all the while taking Government handouts go figure.

Valued Contributor
Posts: 1,195
Registered: ‎12-13-2007

Re: New Credit Card Laws!


armywifey85 wrote:

I agree with you on the bailout !  I myself will never buy American again GM is poor quality my honda is very reliable and cheap on gas. GM needs to shut up and quit laying the guilt trip on Americans to buy American when 80% of their cars parts are not American and Most of their cars are built in Mexico and Canada so whats so American about that when my Honda was built in the USA !!! Oh and the Credit Card Companies and Banks need the regulation if certain regulations were in place maybe people would still have homes to live in but we let certain companies Jack up fees and rates to where you can't afford to live Just so some CEO's can make big bonuses all the while taking Government handouts go figure.


 

I agree with you on the bailout but frankly I think if we keep blaming 'greedy' and 'predatory' CEOs the problem will come right back and bite us; every person who lived beyond their means with credit cards is just as greedy.  Every person who bought a home they knew they couldn't afford, or worse yet took home equity loans to buy cars/vacations/clothes they couldn't afford is greedy and just as culpable.  Yeah, all those shiny things are dangled in front of us, doesn't mean we *have* to take them.

 

The problem is when you divorce people from the responsbility of their actions;  yes banks and mortgage companies were in fact pressured to make poor loans; they were also given an out by allowing them to slice and dice and sell those to other creditors who in many cases had no idea what they were buying.

 

I think all the laws/rules are/should be common sense.  And again, I'm not preaching down, I have been through bad credit times and cause myself a lot of grief when I really needed it because I couldn't finance my business so had to take serious stock and turn 180 degrees around.  The thing that sucks is after all the work I did to prepare myself for this moment in time (1 step from launching) and HAVE the credit needed to make it possible, the whole thing falls apart.  In large part because of other people who were/are just as irresponsible as I was.

 

I think though if we just look at 'greedy CEOs and bankers' and don't look at ourselves, we'll just continue this cycle; should auto-companies who made a bad product be rescued? No, but it looks like we'll have to. Should *homeowners* who borrowed irresponsibly be rescued? No, but it looks like we'll have to.  If we just blame the former and champion the latter, we'll be posting right back here in 2012 about the same problem.

 

And the last thing we need is to rescue the 'Big Three' and then legislate them to build efficient cars AND reward buyers who do.  People don't buy green if gas is cheap, they talk about it when it is expensive.  People don't stop smoking when it kills them, they stop when it is taxed (did you know the single biggest contributor to the drop in smoking related deaths is the cigarette tax, not the myriad medical advances in the last 1/4 century?).  Tax Gas.  Tax Cigarettes.  Tax Soda.  Add a BMI based income tax modifier.  Create incentives to lower interest rates for responsible small biz and personal borrowers by raising the interest rates and fees on risky ones.  Problem solved.

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Moderator Emerita
Posts: 28,095
Registered: ‎04-01-2007
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Re: New Credit Card Laws!


Pappy214 wrote:
My two cards are "secured". I can't get an unsecured card. I have tried. I make close to six figures a year. I only have two bad CA's (utility bills missed during a move) both over 4 years old as of November, both Paid In Full, where is my love?

 

Why is it people with BK's get rewarded faster than those of us who are just starting? My mom has filed BK and within a year she had many of her old cards back and at higher limits than before the BK. Same with a few of my friends. My friend PJ filed last year, lost his house, foreclosed!!! Last week he got a Capital One card with a $5,000 limit. I make more than he does, so because he had a "longer history" he gets a nice fat reard, and I get nothing. Great logic. 



I know it's maddening. How long have you had your secured cards now?

We've had others in your situation, generally those new to the US and also starting from scratch, and I remember hearing the frustration in their posts. By 6 months, things were getting better, and by 12 months, they were well on their way. Sometimes all you can do is grit your teeth and wait, and let those cards build history for you.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Established Contributor
Posts: 794
Registered: ‎08-05-2008
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Re: New Credit Card Laws!

They age to seven months in a week and a half. Never late always on time, overall util under 10 percent.
____________________________________________________

"Evacuate, in our moment of triumph? I think you overestimate their chances."
Established Contributor
Posts: 640
Registered: ‎03-28-2008
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Re: New Credit Card Laws!


Pappy214 wrote:
They age to seven months in a week and a half. Never late always on time, overall util under 10 percent.
Who issues them? Sorry, I'm sure you've already answered that question on here more than once, but I'm too sleepy/lazy to search right now!
 
If they're the kind of secured card that will grow with you (ie secure after a year or less in some cases if treated right, and let you keep the same account history with the newly unsecured card, and otherwise give you the benefits of a card that was never secured in the first place....), then it's just a matter of time before all that 'can't get anything that isn't secured' stuff is just a distant memory. Far better, IMO, to start out secured and build from there than with cards/issuers you can't wait to see the back of within a year. It's a pain waiting for them to unsecure, but... it sounds like you're doing everything right, and as soon as you can 'graduate' from those cards (if not sooner, of course!) you should be well on your way to being able to take your pick of cards.  

 

EQ: 723 / TU: 760 (August 2009)
Established Contributor
Posts: 513
Registered: ‎04-03-2007
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Re: New Credit Card Laws!

[ Edited ]

Pappy214 wrote:

Give everyone a freaking  chance! I am a super good credit risk, having learned from my parents mistakes, but I still can't get a good CC. Nobody will give me a chance, and in this economy it looks like I will never have a decent unsecured card. 

 

I honestly would kill for a 5 digit Credit Limit like many of you have. I don't even have a 4 digit credit limit... My two cards each have a $500 limit.


You might have had a chance even in "this economy".

 

Unfortunately you probably won't get a chance after the new consumer protections go into place.

 

Many people are missing the point. A credit card is a revolving loan. It is not an installment loan. If a person wants guaranteed interest rates he should take out an installment loan.

 

If I charge a hundred dollar widget on my credit and carry the balance at 6% sooner or later I could pay it off with minimum payments. If interest rates rise during that time period shouldn't the bank be able to raise the interest rates? Under the current system if the bank wanted to raise my rates I can say no thank you I want to pay off the card under the old rate. Of course I must stop using the card. I have effectively converted the loan into an installment loan at a fixed rate of interest.

 

If interest rates go up the bank can simply have me voluntarily stop using the card. In order to replace the "charging privileges" I must obtain new credit at current interest rates in the market place. If the going rate is a somewhat higher interest rate I will end up obtaining new credit with the accompanying FICO hits. this means that my existing bank was not out of line raising my interest rates and I should have not opted out of the interest rate hike.

 

Under the current laws the consumer has choices.

 

Under the new law here are the choices the consumer has. Suppose that he has a $500 line of credit 10% interest and charges a $100 widget (20%) utility. The credit card company raises the interest rate to 15%. The consumer charges another $100 widget and carries a $200 balance (minus minimum payments). If the credit card company must apply payments equally to both categories of interest rates, all it has to do is lower the credit limit to $200 to stop the consumer from making additional purchases. The consumer was effectively forced to "opt out" involuntarily  Smiley Sad  of any further use of the card until the company chases the balance down to $0.

 

If the consumer pays the balance off fairly fast the company can raise the CL accordingly. The new charges if revolved will all be at 15%...OR HIGHER.

 

Suppose the consumer tries to replace the credit card to be able to make further purchases on a new card while he is having the balance chased down to $0? He will then be in the position of apping for a new card with a maxed out card in file.

 

Of course while consumer is making minimum payments on a maxed out credit card, the company can add a monthly fee of $10 or $20.

 

The new laws aren't going to hurt PIFers very much. The people who revolve balances, or have low credit scores are pretty much screwed. Their CLs are going down, so are their credit scores. The only thing that will go up will be interest rates and bank fees on low limit cards.

 

Recovering from bad credit will be harder than ever. Additionally recovery will be more expensive than before. No annual fee credit cards will only exist for people with great credit. People with low scores will have to be content with having only a few cards. The annual fees will start to become outrageous.

 

Before anyone says that it won't happen, read the CLD threads. Read about Chase charging monthly fees on some accounts that revolve balances. 

 

Once the lower scoring consumer really starts to feel the pain, there will be a huge outcry for more "government regulation" and consumer "protection". 

 

I would like to see you get a chance. Unfortunately the new consumer protection laws create the dual incentive to lower limits and add fees. There is absolutely no way a politician can tell a bank that it must raise a consumers credit limit or provide a credit card without charging an annual or monthly fee.  

 

This law has a few good components that help the consumer. Most of the new rules will hurt the people who can least afford it.. This new legislation is not consumer protection. It is big bank protection. Even the smaller banks who don't charge a lot of fees will be forced to charge fees. The big banks will then be able to raise their fees even higher.

 

 

 

 

If you would like to "have a chance" at having higher limits, is it possible to put up a bigger deposit on your secured cards? You say that you have a good income and should be worthy of higher limits. It follows that you should have ample savings and would be able to put up additional "security". 

 

In any event I wouldn't get too upset about lack of higher limits on a secured card. The limit is a function on the amount you put up for security. Furthermore do you think that at least one year is an unreasonable time requirement for a person to demonstrate responsible credit payments? If seven months should be enough to raise limits or unsecured cards, why shouldn't it be 6 months, or 3 months?  

 

Demonstrating creditworthiness has a time factor that is required. If you know that I never borrowed  money before and you lent me $500, how would you know when you can lend me $2000?

 

If I put the $500 in a shoe box and paid it back to you a week later, would lend me 1,000 the following week?. Of course if I really need $2,000 why couldn't I pay back the $1,000 the following month and immediately ask for a credit limit increase to $2,000? Would you risk your money? Sure the time frames are ridiculously short, so what is the proper time frame your demonstrating creditworthiness? It is simply longer than 7 months. The good news is that you don't have that long to go. Just think how little credit you had only a year ago.

Message Edited by CreditAble on 12-19-2008 04:09 AM
Regular Contributor
Posts: 181
Registered: ‎12-11-2008

Re: New Credit Card Laws!

[ Edited ]

Pappy214 wrote:

nyccc2 wrote:

 

.....I have only had two PIF utility collections on my reports. WTF!!!!

 

...I did and BMW approved me (granted at 25 percent interest) but I drove away in a CPO 5 series. So the US automakers can ki$$ my a$$.

 


 

You have 2 collections & will pay close to $50k (when you include your ridiculous finance charges) on a used BMW 5 series that's worth $30k.  And you expect creditors to consider you a good risk?  Amazing.

 

Why not save up for a couple of years to pay for that CPO 5 series and pay for it cash, or with a large(>50%) downpayment so that you don't have to pay that ridiculous rate.  Let me guess, you can't wait 2 years till you save up for it and in the meantime rebuild your credit slowly. 

 

This isn't basic transportation that you purchased, so you have no excuse for your impulsive behavior.  If you told me that you just bought a used Chevy Malibu for $8k @ 25% interest because you needed it to commute to work, I would be more understanding.  But you went and purchased a luxury car you have no business owning yet. 

 

I own a CPO 5 series...it's a great car and I paid cash for it.  It's an amazing car and I deserve it & my 815 FICO credit score because I actually was patient enough not to buy it on credit since it's a luxury, not a necessity.

 

I can't even imagine what the rest of your finances look like with these kind of decisions you're making.

 

The best predictor of future behavior is past behavior.  You've had collections in the past, so it's extremely likely that you'll have collections in the future.  Creditors and anyone with common sense know this, so your credit availability and rate is priced accordingly...until you prove them wrong by rebuilding your credit slowly over time.

Message Edited by Mark_in_Pasadena on 12-19-2008 12:50 AM
Established Contributor
Posts: 513
Registered: ‎04-03-2007
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Re: New Credit Card Laws!


nyccc2 wrote:

Under the new rules, credit card lenders will be required to apply any payment above the minimum to the part of the balance with the highest interest rate.

 

I HATE when they say your payments all go to the low interest charges while the high-interest ones pile-up, that sucks (sucked!)


You will hate it even more when credit limits get chased down to $0 before you get the credit limit raised back up with an even higher interest rate.

 

Add a few monthly or annual fees and you are really going to get steamed.

 

See the first half of my above reply to Pappy.

 

You have no idea how much complaining is going to take place about this "unintended consequence".

 

People are already getting CLDs. We already know that Chase is charging monthly fees for some people with balances. 

Valued Member
Posts: 35
Registered: ‎01-04-2008
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Re: New Credit Card Laws!


Mark_in_Pasadena wrote:

Pappy214 wrote:

nyccc2 wrote:

 

.....I have only had two PIF utility collections on my reports. WTF!!!!

 

...I did and BMW approved me (granted at 25 percent interest) but I drove away in a CPO 5 series. So the US automakers can ki$$ my a$$.

 


 

You have 2 collections & will pay close to $50k (when you include your ridiculous finance charges) on a used BMW 5 series that's worth $30k.  And you expect creditors to consider you a good risk?  Amazing.

 

Why not save up for a couple of years to pay for that CPO 5 series and pay for it cash, or with a large(>50%) downpayment so that you don't have to pay that ridiculous rate.  Let me guess, you can't wait 2 years till you save up for it and in the meantime rebuild your credit slowly. 

 

This isn't basic transportation that you purchased, so you have no excuse for your impulsive behavior.  If you told me that you just bought a used Chevy Malibu for $8k @ 25% interest because you needed it to commute to work, I would be more understanding.  But you went and purchased a luxury car you have no business owning yet. 

 

I own a CPO 5 series...it's a great car and I paid cash for it.  It's an amazing car and I deserve it & my 815 FICO credit score because I actually was patient enough not to buy it on credit since it's a luxury, not a necessity.

 

I can't even imagine what the rest of your finances look like with these kind of decisions you're making.

 

The best predictor of future behavior is past behavior.  You've had collections in the past, so it's extremely likely that you'll have collections in the future.  Creditors and anyone with common sense know this, so your credit availability and rate is priced accordingly...until you prove them wrong by rebuilding your credit slowly over time.

Message Edited by Mark_in_Pasadena on 12-19-2008 12:50 AM

 

As harsh as this may sound....  it was exactly what I was thinking.  Sometimes the truth hurts.

 

As long as 7months may seem (especially when building/rebuilding credit) it is relatively short timeframe in the grand scheme of things.  Would you lend me say... 10% percent of my annual salary after only knowing my payment history for 7months considering I have two collections albeit being paid collections?  This is exactly what you are wanting companies to do.  You said you make "close to 6 figures" and you would "almost kill" for a 10k limit.  This is the exact reason we are in this "S**T."

 

You car loan is an example of your credit worthiness...  Why would someone making nearly 100k a year take a loan for a LUXURY vehicle at 25 percent.  Only someone living beyond their means would do something like that.  You do know that is 52832.40 for a vehicle that is 30k in "today's value"? (assuming 5 yr and 0 down). 

 

Bottom of the line... you are a risky consumer.

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