Extortionate Credit Card Interest Act Now !!!

tracydawn

Hi Guys
Just been looking at the No. 10 website as I feel strongly about credit card companies charging over 20 and sometimes 30% interests on credit cards. I admit I have overspent, but while the interest charged on them is so high I have no hopes of paying them off, and as much of our household income is going towards them we have no disposable income to help towards stimulating the economy. I know there are many others in a similar situation, but wonder why nothing is being done about it? In the US President Obama has set things in place to limit the levels that the banks can charge. Nothing is happening here, though. The banks have had billions pumped into them and now claim they are making money again (and paying massive bonuses), but continue to increase the rates, whilst refusing a large amount of new lending.
I would appreciate it if all you good people would hope over and add your names to the relevent petitions on www dot number10.gov.uk/communicate/e-petitions
I would also thanks anyone with suggestions on how this matter can be thrown into the public eye - anyone with any links that could start a public outcry - like the Telegraph managed with the MP expenses.
I for one am at my wits end as to how to carry on. Basically I'm afraid to tell those around me I have messed up - big time!!
Cheers for any help with this
Tracy

Jemma-T

So you knowingly run up massive debts and don't want to pay the money back and now blame everyone else?

Join the queue of people who don't or refuse to take responsibility for their spending. Banks are partly to blame but you are an adult and knew what you were doing.

If you can't manage then go see a money advise centre.

ILW

Jemma-T wrote: »

So you knowingly run up massive debts and don't want to pay the money back and now blame everyone else?

Join the queue of people who don't or refuse to take responsibility for their spending. Banks are partly to blame but you are an adult and knew what you were doing.

If you can't manage then go see a money advise centre.

I totally agree.
People should take responsibility for themselves and not keep blaming others for their own financial mismanagement.

moonrakerz

Why don't you sell some of the things you bought on your card(s) and use the money raised to reduce your debt ?

You got yourself into debt - why should you expect others to bail you out ?

Gorgeous_George

Let's be nice to newbies.

I don't think 20 - 30 % is high for credit card debt. You get up to 6 weeks at 0%, cashback or airmiles on many cards and additional consumer protection. All of these things need to be paid for so not all of that 20 - 30% is profit and they are a business after all is said and done.

I never pay interest and I love my cards.

The OP should consider taking a loan at a lower rate to pay off the cards and should then cut them up and never apply for one again. At least, not until they can manage them better.

GG

jo41

This site is about supporting each other not judging! Come on everyone give tracydawn a break!
Good luck in sorting your cards tracy!

ILW

moonrakerz wrote: »

Why don't you sell some of the things you bought on your card(s) and use the money raised to reduce your debt ?

Excellent suggestion.

euronorris

Hey people, come on. Be nice to the newbies!

The OP wasn't looking for a way out or to blame someone else for her mistakes. She is simply pointing out that the interest charged by the CC companies is extortionate! 30% plus interest rates is far more than required in order to cover their costs AND making a profit.

And yes, whilst the OP has made some mistakes, like a lot of people (myself included), the CC companies are not innocent in this either. I've seen and known people with more debt than their annual income! Why did the banks continue to lend to them?? It was foolish on their part.

I think the point of the original post also, is that, whilst the interest rates are so high, the repayments are making little or no dent to the overall debt. Should she be paying for those mistakes for the rest of her life? Ending in her paying more in interest than the original debt?

That being said, there are some positive changes that the OP can make also, to bring her Debt Free Date forward. Clear out stuff and sell on ebay, survery sites, doing an SOA and looking at ways to cut back etc.

Tracydawn, head on over to the Debt Free Wannabe board and we will have lots of helpful ideas of how to get you clearing that debt asap! Good luck!

TheExpert

I am amazed at the fact that so many people have such a constrained understanding of relatively simple economic principles. The reason these banks charge over 30% is not to cover the costs of any gimmicky benefits (any cards with decent benefits would not offer such rates). The sole reason these rates are in place is because of the huge numbers of people who borrow the money and then charge off with something typically in the region of Credit Limit + 10%. Unfortunately, these people mean that the rest of us have to pay for their actions with huge rates.

Certain strata of the population within the subprime credit card business (and I am talking mainstream providers here) have rates of up to ~50% Charge Off in the first 12 months of having the card. Simply put, half of all these people get a card, max it out within a few months, then go delinquent, eventually default and have absolutely nothing you can claw back. Before you lay the blame at the banks' doors, maybe you should drive around come local council estates and see where the root cause lies.

P.S. Yes I do have extensive banking and consumer lending background.
P.P.S. No, I do not at present work in a financial services/banking-related industry and haven't done for a while.

euronorris

TheExpert wrote: »

The sole reason these rates are in place is because of the huge numbers of people who borrow the money and then charge off with something typically in the region of Credit Limit + 10%. Unfortunately, these people mean that the rest of us have to pay for their actions with huge rates.

Certain strata of the population within the subprime credit card business (and I am talking mainstream providers here) have rates of up to ~50% Charge Off in the first 12 months of having the card. Simply put, half of all these people get a card, max it out within a few months, then go delinquent, eventually default and have absolutely nothing you can claw back. Before you lay the blame at the banks' doors, maybe you should drive around come local council estates and see where the root cause lies.

Uh huh, and why are they lending to people who clearly can afford to pay back such an amount, on such a low income in the first place?

Profit, profit, profit!

And is the figure of people who 'max the card and go deliquent within a few months' really 50%. Or is that just an estimate on your part.

Personally, whilst my CC debt is high (I'm paying it off as quickly as I can), I have never missed a payment, or 'gone deliquent'. Whilst I acknowledge that it does happen, I find it hard to believe that the total figure is 50%, especially when you saying that they reach that point within a few months. It's usually over a time period of years.

And, having watched the years go by, checked their credit records and seen that they really couldn't afford to pay back another CC with only 500 GBP limit, the banks then say 'oh yes madam, you can have another CC with a 2k limit'! Ridiculous. And often, within a few months, they up the limit to 3k (these are example figures) and up the interest rate too.

Then they wonder why they can't afford to pay them back.

If they did thorough checks, and simply said NO more often, they would have far less people defaulting!

But, I doubt the interest rates would be any lower. Companies are and always will be, out to make a profit. And, as the regulations are not as strict as they should be, they will charge whatever they can get away with.

ILW

I think 30% is a pretty reasonable rate for a high risk loan.
There is much, much worse out there.