DAMN CREDIT CARDS and Their Finance Charges

Isn't it amazing that Credit Card companies are complaining that more and more people are filing bankruptcies, yet they continue to use loan-shark interest if you are late on ONE FREAKING PAYMENT by ONE DAY? No. Not me, but I know people.

When interest rates were low a number of years ago, the "penalty rates", etc., were only a few points higher. When interest rates went to 18 percent, penatly rates went to 21 or 22%. NOW, interest rates are almost as low (if not as low) as they were before, but the penalty interest rates are 27-33%! WHAT THEY HELL IS GOING ON?

They will also raise your rates if you've been late on ANY (recent) payment that appears on your credit report. WHY? If you're not late making payments to THEM, why should they care if you were late to another to MAKE their payment?

It's absolutely ridiculous that your interest can jump from under 9% to 30% in ONE PAYMENT. It's also unfair that the finance charges you can incur equal or exceed your payments. There should be a limit (apparently it's over 30%!).

I've also known people who have actually filed bankruptcy. Sometimes they're told not to make any more payments (good for your credit score... of course, if you're doing so to file bankruptcy...) Others had to manage to save $700 (maybe by not makeing more payments...) or so to pay a lawyer for help in filing. Now, if you can save $700, why file bankruptcy?

The government regulates "price gouging" on various things. Why not credit cards? Limit the "penalty interest" to a ONE TIME RAISE of 5 points above what it was when you were late. If you continue to have problems, then they call (and not the nasty "collection agency" calls, but someone within their company who can ACTUALLY help you).

Credit Counselors may need to be regulated, too. I understand some will get your money, and there's no PROOF that they made the payments to the companies as they promised they would. If they will take your case, and deal with the credit card companies, THEY should get the calls, and be penalized, NOT YOU. (Many Credit Couseling Companies are PAID by the credit card companies to make collections... THIS IS NOT RIGHT.)

At least one site I saw recommends that to deal with the situation, you simply stop making the payments to the company, instead putting that money in a savings account. Let them call you a certain number of times, then ask if they'd take the money in your savings account to eliminate everything you owe them, and, according to the site, the majority of the time they will, basically "eating" 50% or more of the debt, just to get the lump-sum of the rest of it. (Of course, you need to make sure to get proof they've actually eliminated the debt, and that they've notified the reporting agencies that you no longer owe the debt, so can no long be late. AND, of course, he offers to help you through the process...) I don't know that 1) this is ethical; 2) not dangerous. The claim is that your credit score will "take a minor hit" during the process, but once the charge is gone, your score will start raising, again.

It seems there's no legal or ethical way to "get out from under" consumer debt. Unless you can fully pay them off, it seems like a mathematical equation approaching zero (1/n+1 where n starts at 1 and grows... You will NEVER hit zero, even when n is infinitely large... It's ALWAYS just out of reach.)

Just like gas prices, when the companies find out what the market will tolerate, you can never expect those prices to go back down to levels EVERYONE can live with. Well, when interest rates were 18%, the credit card companies found that the market would tolerate 21%+ penalty interest. When the rates went down, they DID NOT lower the penalty rates.

It seems that if the credit card companies will negotiate a payment of 50%+ LUMP SUM to eliminate the debt owed them, they should also be willing to forgive part of the debt on the card, without the debtor resorting to non-payment or threat of bankruptcy. (Suggestion, simply drop ALL of the accrued finance charges and start them over - ONE TIME OFFER!) AND, if a person has made payments regularly and on time, if they're late once-a-year (AND only for that company's payments!), it should be forgiven.

(Oh... And at least one of the people I know in these "straits" CONTINUE to receive credit card offers - some with low interest rates, some with high - even from the SAME company!)

It seems to me that if credit card (and other loan) companies don't want to play fair with the public, it's time for the government to step in and and MAKE them, and SOON!