Credit Cards Rates Rise for Some With Poor Credit

[Anonymous]

Those who really need credit now likely can't get it, and some CCCs may not be as generous with CL issued. However, I would not let that dissuade me. Take the CL you can get today, and in 6 months or so the OC might be more willing to give you a CLI.

Lessons learned:

• Don't wait until you need credit to apply as you may not get what you need when you need it.
• Obtain multiple CCs and seek as high a CL as you can get when you can get it. Should you get hit with a CLD on one or more of your CCs, the damage might be inconsequential.
• Well duh, but high interest debt is more expensive than high balance debt. This goes counter to claims of some credit gurus and their apostles who frequent this forum.

http://abcnews.go.com/Business/LifeStages/story?id=3520885&page=1

...
Several credit card companies in recent weeks have started to jack up rates for some customers, and other lenders are tightening standards for auto and personal loans.
...
The number of people getting accepted for credit is also dropping
...
"You have fewer and fewer people applying, except for those that perhaps need the credit," he said.
...
Todd Cook, president of Debt.com, offers some additional tips. To improve credit, he said pay more than the minimum payments on your credit cards and pay off the cards and loans with the highest interest rate first -- not the ones with the highest balance.

[Anonymous]

I'm not too worried...for now. Some tightening of credit standards and practices is inevitable, and necessary. The current loose-credit environment has allowed far too many people to spend far too much.

TPTB know that if credit tightens too much, the economy will crash. It's going to be a fine line for the Fed to walk: engineering a gradual, moderate tightening of credit without bringing the economy down. At this point, I'm betting against the Fed being able to manage this landing. I think the asset bubble in real estate (and, by extension, the fiat money flowing through the credit system in general) is simply too great. We will see sectors of the economy crash, we will see dislocations, we will likely see recession and could see depression.

If I was going to bet on exactly when TSHTF, I would say the first quarter of 2009. Bush and his cronies are going to do whatever they can to keep the economy from crashing while he is in office--open the discount window at the Fed, drop bales of money into malls from helicopters, grow the now-secret M3 at 20%--whatever. If the Democrats win in 2008, all that is going to end, and the economy will crash like a heroin addict taken off the needle.

And for the record, I think the Democrats would do the same thing if the roles were reversed. Both parties are guilty as sin when it comes to the coming economic collapse.

[Anonymous]

---

TheNewWorldMan wrote:
I'm not too worried...for now. Some tightening of credit standards and practices is inevitable, and necessary. The current loose-credit environment has allowed far too many people to spend far too much.

TPTB know that if credit tightens too much, the economy will crash. It's going to be a fine line for the Fed to walk: engineering a gradual, moderate tightening of credit without bringing the economy down. At this point, I'm betting against the Fed being able to manage this landing. I think the asset bubble in real estate (and, by extension, the fiat money flowing through the credit system in general) is simply too great. We will see sectors of the economy crash, we will see dislocations, we will likely see recession and could see depression.

If I was going to bet on exactly when TSHTF, I would say the first quarter of 2009. Bush and his cronies are going to do whatever they can to keep the economy from crashing while he is in office--open the discount window at the Fed, drop bales of money into malls from helicopters, grow the now-secret M3 at 20%--whatever. If the Democrats win in 2008, all that is going to end, and the economy will crash like a heroin addict taken off the needle.

And for the record, I think the Democrats would do the same thing if the roles were reversed. Both parties are guilty as sin when it comes to the coming economic collapse.

---

SPeaking of doing what is necessary. Major banks have just been allowed to use more of their total liquidity to prop up the mortgage industry.  This does not bode well as more is used to prop up the economy less will be used to increase the bottom line and there is only one place that can come from. The consumer, mortgage or not.

[Anonymous]

---

@Anonymous wrote:

SPeaking of doing what is necessary. Major banks have just been allowed to use more of their total liquidity to prop up the mortgage industry. This does not bode well as more is used to prop up the economy less will be used to increase the bottom line and there is only one place that can come from. The consumer, mortgage or not.

---

I am against any kind of bailout, direct or indirect, for the mortgage industry. One of the cardinal rules of capitalism is that the capitalist enjoys all rewards, and assumes all risks for his or her behavior and business decisions. No entrepreneur great or small should enjoy government protection against the risk of failure.

Yet if the mortgage industry had a stellar run of years, with record profits, the capitalist elite certainly would complain if anyone proposed a surtax!

As a capitalist and economic conservative myself, I oppose bailing out the unsuccessful, or punishing/surtaxing the prosperous.

[Anonymous]

TheNewWorldMan wrote:

As a capitalist and economic conservative myself, I oppose bailing out the unsuccessful, or punishing/surtaxing the prosperous.

---

As a small government Hayek liberal, I support capitalism but add that any honest economist will tell you the free market only works when it's a level playing field.

The FDCPA protects consumers--"all consumers, the gullible as well as the shrewd ... the ignorant, the unthinking and the credulous" (Clomon v. Jackson)

Such protections are often lacking for consumers in many areas, but I agree businesses who venture into the waters of capitalism don't warrant protection for the sake of protection--only against unfair practices.

Underwriting mortgages with the expectation that a certain percent of borrowers will default--yet the profit margin remains enticing--is hardly the case on an unsuspecting industry who figuratively got their collective britches taken down by mostly unsophisticated consumers.