Credit cards interest rates, legal loan sharking?

[Gooberlx2]

Originally posted by: SSSnail

Originally posted by: waggy
no its not.

now payday loans and the such are BS. a 3-5% loan for a week is insane.

So who allows this then? It's kinda like scamming because it's "in the fine prints". Total BS right?

Actually, my wife managed a payday loans store. *Most* managers will be rather sneaky and skim over the details. My wife would screen her clients and explain the terms carefully and make sure they understood just how much they're paying in interest. This is because returning customers brought her a lot more in revenue and bonuses than the ones declaring bankruptcy. People would often go out a setup twelve loans in one day. That was Colorado, Florida only allows a person to have one payday loan out at a time.

Payday loans really (obviously) prey on the undereducated and those who speak/read poor english (especially in poor Mexican neighborhoods).

 

[ElFenix]

Originally posted by: mugs

Looks like many states don't have a limit. In NJ the limit is 30%, so if the OP lived in NJ (and his debt didn't fit one of the exceptions), his interest rate would be illegal.

not if his agreement says it's subject to the laws of south dakota. and they all do.

 

[SSSnail]

Originally posted by: ElFenix

Originally posted by: mugs

Looks like many states don't have a limit. In NJ the limit is 30%, so if the OP lived in NJ (and his debt didn't fit one of the exceptions), his interest rate would be illegal.

not if his agreement says it's subject to the laws of south dakota. and they all do.

So according to this

CALIFORNIA, the legal rate of interest is 10% for consumers; the
general usury limit for non-consumers is more than 5% greater than
the Federal Reserve Bank of San Francisco's rate.

What does that mean for California residents that's getting hammered with the 32.9% interest rates? Does it matter where the CC is headquartered?

 

[Mursilis]

Originally posted by: SSSnail

Originally posted by: Mursilis
But . . . but . . . but I must buy things I can't afford!! The commercials tell me so!!

:roll:

Credit cards can be good if you know how to use them to your advantage, you can gain points, miles, etc... Not only that, you build credits for when you really need to buy things that you can't afford, like a freaking house, or a car. The problem is that most people are not responsible enough to manage credits properly. Through youthful indiscretions, I too am a victim and trying to clean up. I'm cleaning up nicely though and I should be debt free come mid year. 🙂

So tell me Mr. Millionaire, when's the last time you pay for a car with cash?

Good for you for learning your lesson. And I have nothing against credit cards - Discover has given me over $1K in cash back over the years, so I can't complain about that. Of course, I follow the 'pay it off every month and don't carry a balance' rule, so I've never even paid attention to whatever the interest rate was.
Regretably, I am not a millionaire, so I have had to finance my last vehicle purchase. But at .9%, I wasn't complaining too much! 😉

 

[ElFenix]

Originally posted by: SSSnail

So according to this

CALIFORNIA, the legal rate of interest is 10% for consumers; the
general usury limit for non-consumers is more than 5% greater than
the Federal Reserve Bank of San Francisco's rate.

What does that mean for California residents that's getting hammered with the 32.9% interest rates? Does it matter where the CC is headquartered?

nope, it matters what law the CC agreement specifies will govern the contract. and it is almost always south dakota, which has the most lax usury laws in the country.

even if you were to litigate it in california court (and you won't, because you've consented to arbitrate in the credit card company's backyard), the california court would apply the substantive law of south dakota because that is what you agreed to.

 

[Vic]

Originally posted by: Uppsala9496

Originally posted by: mugs
The credit card company won't break your legs if you don't pay up.

No, they will just F up your credit for the rest of your life (i'll take the broken legs that will heal after 6 months).

No... the FCRA does not allow them to F up your credit for the rest of your life. Not even if you never pay back the debt.

In the meantime, the going rate from Tony Soprano is 300% APR (I am serious, 25% per month is the going loan shark rate) and you'll be lucky if all he does is break your legs.

Caveat emptor! Buyer beware! The only thing usury laws have been shown to do throughout history is protect the stupid and limit the availability of loans to those people who really need them. The terms are disclosed to you. Read them and don't sign them if you don't like them. Please.

edit: credit card providers are governed by federal laws with regulatory oversight by the OCC.

 

[Greenman]

Chase bent me over a couple months back and upped my rate from 10 to 29%, I think I was late on a payment. I payed it off and closed the account the next day. I always assumed they could charge whatever they thought they could bleed you for.

 

[ScottFern]

I just saw a default rate last night on a credit card app of 32.5% APR and I just laughed because its worse than loan sharking. My 2 credit cards are at 7.9% APR and 6.9% and I would never ever use another credit card unless I am shopping at Costco. 😛

 

[SarcasticDwarf]

Originally posted by: Mursilis

Originally posted by: waggy

Originally posted by: SarcasticDwarf

Originally posted by: waggy

Originally posted by: SSSnail

Originally posted by: waggy
no its not.

now payday loans and the such are BS. a 3-5% loan for a week is insane.

So who allows this then? It's kinda like scamming because it's "in the fine prints". Total BS right?

how about you read something before you agree? if you do not like what the "fine print" says don't get the CC?

if you don't read the contract you don't have a right to bitch.

while i am suprised they do this it is legal. granted they take it to the max legal amount they can do. but i can't blame them. they are a business after all.

You really do not have much choice. Every single CC T&C says that they can change the interest rate whenever they want.

yeah you do have a choice. don't use a CC

But . . . but . . . but I must buy things I can't afford!! The commercials tell me so!!

:roll:

It is difficult to get a decent credit score without having a credit history. Without that you will have trouble getting any kind of halfway-decent loan rate for a home. Also, I would MUCH rather put my purchases on a CC than on my debit card where once the money is taken from the account-it is gone.

 

[homercles337]

Originally posted by: FoBoT
it was all spelled out in the agreement that they sent the dude

RTFM

So, youre a lawyer then? Can i send you my CC agreements so you can translate them into english?

 

[Fritzo]

I screwed Chase when they tried to do that to me. I missed a payment by 3 days and they tried to up my rate from 12% to 24.5%. I had a 16K balance, so they figured "this guy will never pay that off"

Little did they know I only had that balance on there until a $20K dividend was dispersed to me. Paid it off two days ago, then a CS rep had me talk to a manager wonder why I was cancelling the card.

HA! Shove that up yer credit hole!

 

[Mursilis]

Originally posted by: SarcasticDwarf

Originally posted by: Mursilis

Originally posted by: waggy

Originally posted by: SarcasticDwarf

Originally posted by: waggy

Originally posted by: SSSnail

Originally posted by: waggy
no its not.

now payday loans and the such are BS. a 3-5% loan for a week is insane.

So who allows this then? It's kinda like scamming because it's "in the fine prints". Total BS right?

how about you read something before you agree? if you do not like what the "fine print" says don't get the CC?

if you don't read the contract you don't have a right to bitch.

while i am suprised they do this it is legal. granted they take it to the max legal amount they can do. but i can't blame them. they are a business after all.

You really do not have much choice. Every single CC T&C says that they can change the interest rate whenever they want.

yeah you do have a choice. don't use a CC

But . . . but . . . but I must buy things I can't afford!! The commercials tell me so!!

:roll:

It is difficult to get a decent credit score without having a credit history. Without that you will have trouble getting any kind of halfway-decent loan rate for a home. Also, I would MUCH rather put my purchases on a CC than on my debit card where once the money is taken from the account-it is gone.

You must've missed the 'can't afford' part of what I said. Personally, I have nothing against using credit cards - I love the perks. But I also pay them off every month.

 

[Acanthus]

My gf missed a payment on her card over a year ago, discover.

$6000 balance.

Interest went from 12% to 28.8%, they never lowered it again.