I got into trouble once with a credit card. I was a kid and I took the card despite my father's advice to just be happy with my American Express card. I never kept a balance on the Amex, but I did run up a balance on the Visa I had, and then promptly got laid off from my job (1993). I called them and said that it was going to be tough to pay the minimum and asked what I could do. I was told either pay the minimum or default. No ifs ands or buts. Then the person on the line said, "Look, just default. We'll give it to a collector and they'll settle with you." I did it. I ended up closing out the card with the collection agency for less than 30 cents on the dollar I owed. I felt bad about it, but it was all I could do. I asked the collection agent what they bought the bad debt for and he told me that he usually would get accounts for about 15 cents on the dollar. WTF. Yeah, it was a black mark on my credit, but within 3 months of settling, the same bank (BankofAmerica) sent me a card offer with a lower interest rate and twice the credit line. I applied for shits and giggles just to see what would happen and I had the card within two weeks. I closed it promptly (had to pay the fee), but I will always remember the debt collector's justification for his job (paraphrased): "I am a business person. The loan sharks are the card companies. I don't want them to go out of business because they keep a roof over my head, but they are generally shitty and prey on people. I clean it up. The bad mark on your credit will go away eventually. Don't worry about it." I actually admired that guy. He knew it was a shitty business, but one that had to be done. Mike Rowe should do a dirty jobs episode on debt chasers. Talk about hating players, instead of hating the game.

True happiness is knowing you are a hypocrite. -- Ivor Cutler

I wonder if defaulting on a credit card is now more problematic for consumers, especially with the ownership society's pet bankruptcy reform provisions aimed at deadbeat cardholders...

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"Respect mah authoritah!" - Fred Cartman Thompson

I suppose some would argue it's all a matter of the credit card holder's "choices" in life. To some, those people who end up drowning in credit card debt due to catastrophic medical bills or job loss are just reaping the consequences of their "bad choices."

Sucks to be them, huh CBT?

~Russ

Credit card companies are getting nasty. Never had a Discover card. I try to read all of the bs they mail. It's like doing taxes though. They are also getting very tricky on when they charge interest, even if you pay off your card every month.

Just an FYI, don't cancel cards and get new cards frequently. It is my understanding it does not look good on your credit record.

We did a 3 year lease on a BMW 5 series around 10 years ago. Sweet! Great car, absolutely no maintenance, they even did oil changes at no charge. Don't know how it affected credit rating, but do know it did not affect our ability to borrow. Traded as soon as the lease was over because the warranty was over at the same time. Been with Ford ever since, except for this little Prius we recently added to the stable.

Bzzgrrl,

With all due respect, a thread about how 80%(?)* of Americans are due to be hammered by the CC companies may not be the place to discuss luxury automobiles.

* This is a guess. Does anyone have statistics on how many US families carry credit card balances? I'm counting the kids because if mom & dad are affected, they are affected.

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Less is the new More - Karrie Jacobs

The fact that the national savings rate is negative, I believe for the first time since the depression, is probably a clue of how bad it's getting for the disappearing middle class.

Wow, I'm not sure where to begin...

First, they make bankruptcy harder.

Its not harder to file just not as easy to discharge debt for those with a verified income.

and they said that it had to do with lease versus loan and the credit industry punishes you for leasing because they want to loan the money

I'm not completely comfortable that this statement is accurate. Fair Isaac scores take into account a variety of debt practices but I know of no instance in the formula that "punishes" the score with a lease v. a loan.

don't cancel cards and get new cards frequently

This is correct. A credit score can be lowered by frequent opening and closing of credit accounts.

Go to your local credit union. They have all the products you will need plus you can trust the fine print. Then, when and if you do have a problem you just walk right in and talk to the decision makers.

I have had a Visa card through Simmons National Bank in AR for years. The interest rate is about 8%, though I usually pay off each month.

They do charge a $30 a year fee, but they have never pulled anything funny with me as far a rate changes or hidden fees.

Link...

I think this documentary is in the video rental stores now. Credit card companies..they are worse than we thought. So shows the film. Like a Michael Moore film thought not Michael Moore.

Where are they?

Well, here is how it goes: the credit card companies give the individual members of Congress money; in return, they do not pass laws unfavorable to the credit card companies.

Congress is for sale, and in pieces, and they bought that piece.

Democracy is a relative concept, as you can see.

BizG, I realize you weren't the 1st to go OT. I chose to adress you because the original OTer can get unpleasant when he gets defensive and I assumed you could handle the hint with more composure.

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Less is the new More - Karrie Jacobs

I recently closed my Discover Card account (with a balance) due to an APR increase. Discover issued me a new card with a new account number. I refused the new account and left the old account closed after their offer to reopen it. This was two to three months ago.

Yesterday, a representative called and offered to reopen my account and the lower APR I previously had. My wife took the call. He instructed her to have me call him only and not to call Discover customer service.

Why do they want my business? Smells phishy...any thoughts or advice?

I can only offer anecdotal evidence on this but I see a lot of credit card debt in my divorce practice. It no longer shocks me to see couples carrying tens of thousands of dollars in credit card debt. While some of it is often attributed to uncovered medical expenses (which I explain away via our crappy health insurance system), much of what I observe comes from living beyond one's means. There is no pattern in terms of socio-economic factors, either. I've seen successful accountants with $50,000 in credit card debt. It's really hard to understand. We need to do a better job teaching people to shun excessive debt and live within their means.

www.herstonlaw.com

We need to do a better job teaching people to shun excessive debt and live within their means.

Excellent advice!

Yeah. I'd like to ban Capital One from my mailbox and every other intrusion they are making on my life. I never have, and hopefully never will, had credit through them but the intrude on my life in different ways daily.

One defense of credit cards: Small business startups.

Going to a bank and getting a small business loan or line of credit is almost impossible if all you have is an idea. Lots of small business entrepreneurs have turned to credit cards to help finance their startup. Michael Dell was one of them. It's super high risk, though, and not for everyone, especially if all you have is an idea.

I defaulted on a card 5 years ago and figured it was over and done. I am now being sued out of the blue. The lawyer I met with said that there is a 6 year limitation thus they are suing now. Most cards just let it go, some agressive ones do not. I think its gotten worse as I know others this type of thing has happened to. To this day, even with the suit on my record I get offers that say "We want to give you more credit!"

I am actually a collection rep at discover card, and came across this forum looking for information to help me on a promotion to trainer within the company. The only true way to handle a credit card and have good credit is to charge a balance monthly and pay it off the same month. If you are in a sticky situation already because of your credit cards. I would first recomend calling your creditors and asking for help. One thing a credit card employee will never tell you over the phone is that a lot of the actual help you can get from a credit card company doesnt come until the account actually goes delinquent. If this does not work, you should seek help from a CCCA (consumer credit counseling agency) and preferably a non profit one. When signing up you should ask how long the process takes, because it can be up to three months. The CCCA sends a proposal to each creditor requestinga lower rate in exchange for a lower minimum payment. Most of the time the interest is so low the card gets paid off rather quickly, and the option is still available to make additional payments to pay off the account quicker. DO NOT go with a consolidator if you can avoid it. The majority are liars and will tell you not to communicate with your creditors. What they will do is keep the money that you give them and they wait until the account gets so far behind the creditor has no choice but to charge off the account and settle for as low as 30 cents on the dollar. What they dont tell you is that this absolutley drags your credit through the dirt, and remains on your credit for the same amount as bankruptcy. And another little tidbit is that in some cases when you file bankruptcy, you can leave one of your low balance credit accounts open. paying off this account after you file bankruptcy looks great on a credit report and helps to re-establish what little may be left of your credit at the time.

I paid off my Discover balance a couple of years ago and called to close the account. Last summer I got a replacement card in the mail. The account was still active with a zero balance. I called again, told them that I had called to close the account months ago and insisted that they send me verification that the account was indeed closed.

The lady tried every tactic imaginable to get me to keep the card but I told her that their fees were too high and amounted to loan sharking. She then touted their low-interest introductory program that she could get for me. It is normally for new customers but she could do that for me just to keep a "good" customer.

I reminded her of what happens if a "good" customer happens to forget a month's payment and told her that, in the proper political climate, her company's business practices would be patently illegal.

She then said that she was concerned that I might not have access to money in an emergency if I closed the account. I assured her that she should not stay awake nights worrying about my welfare. Just close the damned account and send me documentation that I had requested closure. She rattled off a toll-free number that I could call within 90 days if I wished to change my mind but, I declare, I have mislaid it.

Good riddance!

Wearybottom Associates

Here's the problem: You're a moron. Or just a liar. Indeed, Discover did NOT raise its default rate to 42%. At the time, it was 28.99%. I know, I work at Discover. So please, stop spreading stupidity and baldfaced lies.

Bottom line: Why are you living beyond your means? If you can't afford what you're buying, then a credit card's interest rate should be irrelevant. It could be a billion percent. So what? You shouldn't be making the charges in the first place. Problem solved.

The vampires get pretty testy when a little sunlight hits them.

Do we get the caps lock next?

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I'm sure Discover Card would really value an 'employee' who calls customers or potential customers morons. They obviously believe it and depend on it but publishing it would be considered gauche.

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