Why the negativity towards not paying

Mr.Mulla

mufc689908 wrote: »

Are the majority of people on here employess of credit card companies?

Whenever the subject is raised of not paying credit card debt the amount of people on here up in arms is suprising to say the least.

Im on 8k at the moment and well on the way to making that 15k written off, when the last ones taken care of that will make it 20k.

The credit card companies have been ripping people off for years why does half the forum love them so much?

It's not the negativity, it's responsibility.

When you applied and used the credit card, you are responsible for everything you have used, which means paying for whatever amount you owe.

ILW

Setting aside the legal arguements, I can think of no cultures or societies in the world where it is considered acceptable to borrow money and not make every effort to repay it.

callum9999

I don't see how people not paying off their debts has no affect on the interest rates they charge (or the credit limits they give).

It's irrelevent what department is absorbing the losses due to write-offs. I refuse to accept the people who decide the interest rates and credit limits won't take any notice of the amount of money they are writing off because "its being written off in operational losses" or however they do it.

As I have no knowledge on the extent of their losses I can't really comment on whether it makes much of a difference (although anecdotally it seems to have had a fairly sizeable affect on the credit limits they give people).

izools

Interest is calculated on a risk basis.

I.e. those on a 7.9% APR bracket are less expected to default than those on a 15.9% APR bracket. The likelihood of the customer defaulting and the costs involved if they do, are integrated into the APR to start off with. So whilst 2% of the customers in the 7.9% bracket are expected to default, maybe 6% in the 15.9% bracket will. Which is a loss offset and then some by the interest that is charged to all customers in their risk band - still NET profit across the customer base. (Hence the Retail side of high street banks has done, and still is, doing well).

The reason we see "Typical APRs" increasing at present, is because more people are likely to default that apply for that product.

As you know, the APR advertised must be what atleast two thirds of applicants get.

If the applicants over the last six months have been a higher risk, and therefore been offered higher APRs, the typical APR raises, not because the lender has changed it's interest policy, but because the average risk to them from new applicants has increased. Say for example you have moved job because your old employer went bust and now you have to write 1 year with employer instead of seven, you'll get a higher APR. Not because the lender has changed it's policy, bust because you are a higher risk.

Make sense?

Basically if you are one of the lucky ones who are a creditors wet dream, with a £60,000 income, £1,500 of debt, three credit cards that have been open a decade and have never fallen foul of the due date or limit, and have a stable career with a mortgage of about 20% your house value, etc etc, then you will still be granted the same APR you would have been a few years ago - ish - only now the APR you are granted is less that what is advertised - because fewer people have good enough credit to qualify for the low risk band APR that Mr Creditors Wet Dream might

never-in-doubt

kalaika wrote: »

So if you follow the law, not morals, does that mean you would happily mug an old lady if the law didn't say it was wrong?

As described by roadster above - kinda answers this point!

kalaika wrote: »

I cannot comment on those in situations like this through no fault of their own.

Which is the people I will try and assist. Those that did not intend to renegade their debts but are at their wits end with nowhere else to turn!

kalaika wrote: »

However, getting debts written off when there was never any intention of paying it back (as the OP appears to be indicating was his intention) is definitely is a moral wrong, even if not a legal one.

These kind of scenarios make me sick as much as the next guy

kalaika wrote: »

In a civilised society we should always consider both the legal and moral aspects of our actions.

If you classify the UK as a civilised society, then maybe

Norfolk_Jim

Can you debate defrauding insurance companies next please

never-in-doubt

Norfolk_Jim wrote: »

Can you debate defrauding insurance companies next please

Why? Have you? Would you? Could you?

Do tell

speedbird1973

mufc689908 wrote: »

Are the majority of people on here employess of credit card companies?

Whenever the subject is raised of not paying credit card debt the amount of people on here up in arms is suprising to say the least.

Im on 8k at the moment and well on the way to making that 15k written off, when the last ones taken care of that will make it 20k.

The credit card companies have been ripping people off for years why does half the forum love them so much?

Yay - i saw your username - I bet you're Malcolm Glazier!!!

"Why should I pay my £716million pound debt" hehe

dazza.mk

never-in-doubt wrote: »

No, the cost is not - it is met by operating margins or budgets as we call them.

Do you actually know how a business works?

????

Unless you want to argue that a bank would find unenforable write offs as an acceptable level of bad debt then they will try and regain their margins.

So they've got the choice of increasing revenue or reducing operating expenses.

So n-i-d the actions of people who do get their debts written will mean an increase in interest charges for other customers (the easiest option)

...or say reducing other costs, and as they can't reduce bad debt (as you've campaigned to write eit off) I guess that means we'll be dealing with more Indian call centres !

A Lose lose situation for their customers as a whole.

never-in-doubt

No dazza - the unenforceable element of debt is included in their risk for bad debts!

My god i'm not going to sit here and explain how retail or any other kind of banking works but suffice to say those that actually think that a bad payer affects the rest of us need to go back to school.

Thats my take on the matter!