Quote :

"I totally agree that there should be transparancy in the credit markets and that consumers should be able to access their credit history at will. Going back to the credit card thing though, since the advent of the mastercard/visa/whoever debit card theres really no reason to have a credit card."

It's true. There are much better (and faster) ways of building credit than with a credit card.

[Edited on May 21, 2009 at 10:00 AM. Reason : a]

5/21/2009 9:59:18 AM

Quote :

"Sure, it worked in a competitive market where they thrived off your business. I did the same thing when they dinged me and they were completely indifferent about it. I think they actually wanted me to close the account to get such a large liability off their books"

The point isn't that you will get your original bank to lower your rates, it's that you have options and choices. The market to provide you with credit is competitive. If you don't take advantage of that, it's your own fault.

Quote :

"I apologize, they have a monopoly over your credit rating and there is no competition in this space."

Not at all. Aside from the number of different credit reports there are (FICO scores are just one of many), you don't need to use credit cards at all to build your credit history. Most banks will offer unsecured loans and usually at rates competitive or better than credit cards (10% at SECU, 7% if the loan is for a computer). Granted they don't offer these loans for amounts less than a couple thousand, but you should really be saving up for those types of expenditures anyway. Nothing requires anyone to have a credit card, it's just more convenient.

Quote :

"How about reduce the debt/credit ratio portion of the calculation and increase the debt exposure (or lack thereof) of the calculation for one simple idea?"

Probably because debt/credit ratios are more indicative of your likelihood and ability to pay a loan back rather than your total available credit. It's all a matter of weighting, and just because you think something is counter intuitive doesn't mean it doesn't make sense.

Quote :

"And as long as GS and the rest of Wall Street owns DC, they'll be able to socialize the losses. "

And yet here you are advocating the further entanglement of the government and the financial system. Here's an idea, if we stop letting the government stick its paws where they don't belong, they won't be able to socialize private losses.

Quote :

"Let's say i use Progress Energy for my bill. Every month my bill ranges from $20-$40/month. For some reason though the transducer fucks, something shorts in the mains, power checker dude gets lazy writes down wrong number but for whatever reason i get a bill one month for $120. Yes i am going to fight this but lets say they are being stubborn and try to push me off as trying to "get out" of paying the energy i used. At this point i'm stuck in a catch-22. As the customer i have the right to fight this over charge. In the mean time though if I do not pay my $120 electric bill in time it will go on my credit rating as a late payment. So to not have any negative impact on my credit rating I have to pay my unjust bill than work to get my money back. this is bullshit in my opinion as I can not simply ride the free market to pick another electrical supplier. They actually had a situation in Wilmington last fall where something fucked up with the water meter of a bunch of residents in some community and the Utility company came along and tried to force all these people to back pay for water which for some totaled in the $1000's. I am sure those who did not pay took a hit in their credit rating"

Existing federal law already covers this:

Quote :

"The creditor may not threaten your credit rating or report you as delinquent while your bill is in dispute. However, the creditor may report that you are challenging your bill. In addition, the Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants who exercise their rights, in good faith, under the FCBA. Simply put, you cannot be denied credit simply because you've disputed a bill."

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre16.shtm

Quote :

"unless you are a blood sucking stake holder of Goldman Sachs or CiTi Group set on making profit using deciet, greed, or ignorance of your customers what is the problem? "

The problem is the government sticking its nose in places it doesn't belong. As I said, by law (until now) the only form of tender a creditor must accept is legal US currency. Payment by credit card, check card, electronic check or wire transfer is not required. They are considerably more convenient yes, but not required. If your credit card doesn't offer you the form of payment you'd like, get a different card.

Quote :

"I do not think it addresses the problem but another thing that should not be allowed is card companies who alter rates on customers who may pay on time every month for 10 years but the bank found out they say paid their cell phone bill late. This is absolute bullshit in my opinion. "

Why should it not be allowed? Its stupid and retarded yes, but if people actually did something about it (like switch to another card) when it happens, then you can bet your ass card companies wouldn't do it.

Quote :

"The point is as a consumer i should not have to read the fine print and check my APY every month checking against back bills to see if my card company is trying to give me the screw job. "

If you gave them permission to do this in your contract with them, then you most certainly do. If you don't like the terms, don't take the credit card. It's not like all of this shit isn't spelled out up front.

Quote :

"Counter-punches every once in awhile to benefit the consumer with worthwhile legislation like this is the balance in my opinion. Bonus points for seeming to get partisan support."

A better counter punch would be removing the legislation that favors the industry, not adding more legislation to counterbalance it.

Quote :

"There is so much misinformation and speculation about what will happen to your credit score under given scenarios that it is really mind boggling. Like I said earlier, I should have the right to know how my ability to get the best mortgage or personal loan rates will be effected by any action I may take regarding my credit profile, not speculation or "rule of thumb' bullshit, especially when a piece of the system that is counter intuitive like closing credit lines negatively impacts your score is in place."

No you really don't have that right. It would be nice sure, but that is really between you and your bank since in the end, your bank is the one that makes the decision, not the credit card companies, and not the credit reporting agencies. Your credit score (whatever system they use) is only one small part of your overall credit report and history, and if your bank is making their loan decisions without looking at anything other than your score you don't want to be banking with them anyway.

5/21/2009 1:38:42 PM

Quote :

"The market to provide you with credit is competitive. If you don't take advantage of that, it's your own fault."

No, no it isn't. Did you not read? I closed a 31k card and have near 800 fico score with a flawless credit history and the best Capital One could do is a 2k limit. I have liquid assets more than 15x that and illiquid assets nearly 50x that. I suppose I could shop around but I expect a lot of them in this environment are going to be extremely hesitant to extend reasonable credit lines to anyone. I mean, I agree with you that the free market will work, when I run up to my limit, I'll just switch over to my debit card and they'll be down that 2% on every purchase I was giving them. The problem is it just takes the free market entirely too long to work because we let behemoths develop.

Quote :

"Not at all. Aside from the number of different credit reports there are (FICO scores are just one of many), you don't need to use credit cards at all to build your credit history."

Good point, however, we could have a more realistic discussion about this were the FICO algorithms made public. I have a good personal anecdote here. When I graduated college and landed a job making 50k, it wasn't long before I wanted to splurge in the rewards of a high paying job and what better way than to dump the 10 yr old American car with 100k miles on it for a hot barely used S4. I did this, balked at the initial 14% rate given for a loan, but took it on the loan agents good faith that a few months of on time payments on that + a credit card I opened and they'd lower my rate automatically with no fees. Had I a payment history via a credit card on shit I paid with a debit card all through college, then there is a real possibility I would have a better rate from the beginning. Ultimately, if the loan officer would have been deceitful in her statements (where have we heard that before?) then I would have been stuck with a high rate loan and would have have had to pay origination fees to take out a new one. All because the credit rating agencies have a monopoly on your profile which directly relates to the rates you can get. Previous to that, you had a relationship with your local bank and they alone judged your credit worthiness. You'd think I could go into the local bank, show them my rent + utilities + no other debt obligations and my 50k salary and that would be enough to get a loan at market rates.

Quote :

"Probably because debt/credit ratios are more indicative of your likelihood and ability to pay a loan back rather than your total available credit."

Maybe, maybe not. I closed a 31k card that carried about 1-1.5k per month on average on it for a card that has a 2k limit. Which ratio looks better? My ability to pay back a loan certainly didn't change, but the credit rating agencies certainly think so and I'm sure I've been dinged because of this.

Quote :

"It's all a matter of weighting, and just because you think something is counter intuitive doesn't mean it doesn't make sense."

Well, apparently there are loan officers at banks out there that have a similar sentiment, advising a potential debtor to close credit lines. It is absolutely intuitive that from the banks perspective this lowers their risk. So it is counter intuitive that closing these lines would actually knock your score down.

Quote :

"Here's an idea, if we stop letting the government stick its paws where they don't belong, they won't be able to socialize private losses."

It won't happen any our lifetimes, so I don't know what you spend so much time being focused on it. Especially on the damn wolf web. Here's a hint, get off the wolf web and go be an actual advocate for your cause.

5/21/2009 2:55:30 PM

This might help you fail boat. Might explain why your score might go down when you dropped your high limit card. Let say you originally had the 30k limit, but usually only carried 1k a month. You ratio was low. But if you dropped down to a 2k card limit and still carried the 1k, youve got a 50% ratio, which will make you LOOK like you are more of a risk. At least on one part.

http://www.bankrate.com/brm/news/debt/20020927a.asp

5/21/2009 3:42:58 PM

*facepalm*

That is exactly what we are debating. I know how the existing system works and I know why my score has probably dropped recently. I'm in a 30 yr fixed with no new loan needs any time soon so I didn't care. But there is something broken about the system and the score for instances like what I did because nothing materially changed in my ability to repay a loan and in actuality (and apparently at least one banker/loan officer out there agrees) my risk of default on a future loan is actually lower because I've remove 29k of credit that was extended to me.

5/21/2009 3:58:31 PM

I was just trying to help.

I do agree with you about the score not making too much sense. People who have no debt would have an extremely low FICO score. The issue would be with the companies who rely on this score to determine rates instead of using some common sense. When dealing with most lenders though, you can always keep asking for supervisors until you get someone who has the ablity to THINK and adjust your rate to what you deserve. But if you dont plan on borrowing any money, dont let your score bother you.

5/21/2009 4:53:42 PM

1337 b4k4 probably saw a few cool looking and intriguing line graphs depicting supply and demand curves in Econ205. With this important knowledge in his cerebral toolbox he is thus now the arm chair expert on economics and free markets.

5/21/2009 5:33:47 PM

fail boat, have you ACTUALLY shopped around for rates or have you just heard that's the way it is at all companies. I had no problem picking up a new Discover card with a 6K limit last month and my score is a good bit less than 800. In both of your anecdotes thus far you've countered the "just take your business elsewhere" argument with an anecdote where you only go to a single lender and then assume the rest of the market is that way.

Quote :

"Previous to that, you had a relationship with your local bank and they alone judged your credit worthiness. You'd think I could go into the local bank, show them my rent + utilities + no other debt obligations and my 50k salary and that would be enough to get a loan at market rates."

guess what you can still do this...just not with Chase, Capital One, Bank of America, Wachovia, etc... go to a small town local bank and they won't just make an evaluation on your score, they'll take the time to look at the individual situation.

basically I see you as bitching about "there's no where else to go" when in fact you just haven't looked in more than one place

5/21/2009 6:06:14 PM

Don't like this

Quote :

"Customers have to be more than 60 days behind on a payment before seeing a rate increase; and even then, the company has to go back to the lower interest rate after six months if the customer pays the minimum balance on time."

and don't like this

Quote :

"Before getting a card, customers under 21 have to prove they can repay the money or that a parent or guardian could pay off the debt"

But mostly it seems to be feel good BS that will do little to actually stop people from spending money they don't have.

5/21/2009 6:43:18 PM

Quote :

"No, no it isn't. Did you not read? I closed a 31k card and have near 800 fico score with a flawless credit history and the best Capital One could do is a 2k limit. I have liquid assets more than 15x that and illiquid assets nearly 50x that. I suppose I could shop around but I expect a lot of them in this environment are going to be extremely hesitant to extend reasonable credit lines to anyone. I mean, I agree with you that the free market will work, when I run up to my limit, I'll just switch over to my debit card and they'll be down that 2% on every purchase I was giving them. The problem is it just takes the free market entirely too long to work because we let behemoths develop."

So choose someone other than Capital One. The whole point of competition is that you look at the competitors. But if you're just going to go with the first people to say yes, you will get screwed, all the time, every time. But this is not something the government can or should fix. Your failure to take advantage of the opportunities available to you is not the responsibility of the government.

Quote :

"I have a good personal anecdote here. When I graduated college and landed a job making 50k, it wasn't long before I wanted to splurge in the rewards of a high paying job and what better way than to dump the 10 yr old American car with 100k miles on it for a hot barely used S4. I did this, balked at the initial 14% rate given for a loan, but took it on the loan agents good faith that a few months of on time payments on that + a credit card I opened and they'd lower my rate automatically with no fees. Had I a payment history via a credit card on shit I paid with a debit card all through college, then there is a real possibility I would have a better rate from the beginning. Ultimately, if the loan officer would have been deceitful in her statements (where have we heard that before?) then I would have been stuck with a high rate loan and would have have had to pay origination fees to take out a new one."

Is there some part of the story that you're leaving out? Somehow, you managed to graduate college making 50k/year and the best rate you could get for a car loan was 14% (again, did you take advantage of competition?) You then somehow managed to acquire a credit card with a 32k limit and maintain a supposed 782 FICO score, but then when you decided to close that account, couldn't find a better card that a capital one card with a 2k limit, but you've still also managed to secure a (presumably) traditional 30 year mortgage? With a history like that, I wouldn't want to lend you money either, because it tells me that something is making it so that people don't want to lend you money and don't think you're a low risk borrower. Either that, or you're just fantastically horrible about being suckered in to shit deals. Tell me, is your mortgage rate above 15% too?

Quote :

"Previous to that, you had a relationship with your local bank and they alone judged your credit worthiness. You'd think I could go into the local bank, show them my rent + utilities + no other debt obligations and my 50k salary and that would be enough to get a loan at market rates."

Yes, yes you can. But Capital One, BOA, Wells-Fargo, Wachovia, BB&T etc are not local banks.

Quote :

"Which ratio looks better? My ability to pay back a loan certainly didn't change, but the credit rating agencies certainly think so and I'm sure I've been dinged because of this."

Because your FICO score is a snapshot of your financials as they exist now, meaning with a 2k limit and a 1.5k balance you're using 3/4ths of your available credit, meaning you look like a high risk borrower. Again this is why your FICO score is just a small part of what your bank uses, and if it isn't, you need a new bank.

Quote :

"Well, apparently there are loan officers at banks out there that have a similar sentiment, advising a potential debtor to close credit lines. It is absolutely intuitive that from the banks perspective this lowers their risk. So it is counter intuitive that closing these lines would actually knock your score down."

Not at all. Looking at your FICO score is like looking at a BMI. Just because the score holds well in the general sense doesn't mean that in any particular instance it is a good accurate representation. Again this is why banks pull your history and not just your score. And again, if you are dealing with ANYONE who just looks at your score, you should run fast in the opposite direction because these people would also send professional athletes to obesity camp. Furthermore, what ever happens to your FICO score is entirely irrelevant when it comes time for the loan. If the banker you're working with says "To get a better rate with us, close your extra accounts" then it doesn't matter if your FICO plummets temporarily, because you don't get your loan from FICO, you get it from your banker.

Quote :

"1337 b4k4 probably saw a few cool looking and intriguing line graphs depicting supply and demand curves in Econ205. With this important knowledge in his cerebral toolbox he is thus now the arm chair expert on economics and free markets."

Not at all, just a guy who had a shitty start to his financials (never had below 50% DTI all through college, not counting the 40k in student loans) and who still managed to get an up charge reversed and then some and a car loan (2 actually) at significantly less than 14% and an unsecured personal loan, and a computer loan. And it didn't take any magic or dancing around, no FICO finagling (I have never seen my FICO score, no need) no high paying jobs, no huge liquid cash reserve. Just calling around until I get a good deal and a banker who will work with me, not against me.

I have no love for the credit card companies or any of the banks and have no interest in defending them, but if baffles the hell out of me that so many people find the concept of "shopping around" to be some huge mystery. It isn't rocket science, and if it is to you, you honestly have no business getting credit cards and loans anyway.

5/21/2009 6:54:01 PM

Quote :

"Chase, Capital One, Bank of America, Wachovia, "

Ya whoever it was is better of not getting a credit card from these assholes.

Quote :

"that will do little to actually stop people from spending money they don't have."

You are right, its will do NOTHING to stop people from spending money they do not have. Unless they are a 19 yr old unemployed
college kid whose parents are not nice enough to co-sign. This being the only part of the bill i found questionable. Otherwise
I think you 100% completely missed the point of such bill.

Big Banking spends $Millions on lobbyists and pushing legislation or lack there of. Big banking does not get their way for once
Fuck em'

If only if it were as easy to get millions of the dumbass people in america people to pull out their mathematical models
or even just use a little common sense to avoid such predatory practices. If though the gov't can instead with one swoop of the
pen target these policies of big banking; policies that are present merely to swindle customers out of $millions of dollars per year....

All my accounts are with Credit Unions so I have never been effected by any of the shady bank policies. Nonetheless
its ridiculous that banks for so long with regards to policies were allowed to operate in such a way to prey on their otherwise
customers.

HEAVEN FORBID Bank of America from sending your Grandma a notice within ample time to allow your dad to explain to her (since she can
not read very well) that the bank wants to increase her interest rate 5% to help pay Hugh McCall's golden parachute. Instead
of Uncle Rick being surprised when he does Grandma's finances and she had $3000 in increased interest.

Besides if for whatever reason you had to take on a large balance, which you are paying off, it is not always as simple as being like Fuck you CiTi i'm going somewhere else. After they double your interest rate, not because you paid your bill late, but because you missed a car payment to a completely different company.

5/21/2009 7:08:01 PM

Quote :

"I think you 100% completely missed the point of such bill. Big Banking spends $Millions on lobbyists and pushing legislation or lack there of. Big banking does not get their way for once Fuck em'"

So the point of the bill was to say fuck you? Is that your standard for quality legislation?

Quote :

"...the bank wants to increase her interest rate 5% ..."

In case you didn't notice, I didn't quote the 45 day notice of rate changes as bad.

Quote :

"after they double your interest rate, not because you paid your bill late, but because you missed a car payment to a completely different company."

Credit card companies extend credit based on your credit-worthiness. When your credit-worthiness changes, you don't think that should affect the conditions under which you receive credit?

5/21/2009 8:30:59 PM

Quote :

"Credit card companies extend credit based on your credit-worthiness. When your credit-worthiness changes, you don't think that should affect the conditions under which you receive credit?"

^ They can as long as they give you the 45 day window as prescribed in the bill.

[Edited on May 21, 2009 at 10:44 PM. Reason : l]

5/21/2009 10:44:16 PM

Quote :

"The point is as a consumer i should not have to read the fine print and check my APY every month checking against back bills to see if my card company is trying to give me the screw job."

Why? Why shouldn't you be responsible to know what is in a contract to which you are agreeing?

5/22/2009 5:55:21 PM

Maybe you should ask the 90 senators, or the 40 of 50 Republican senators who apparently thought this was a good idea.

5/22/2009 6:40:22 PM

^^^ In the interest of fairness then, you should be required to notify your credit car companies of any changes in your credit status 45 day in advance. Plan on getting a car loan or lease? 45 day advance notice. Looking to close out a few accounts? 45 day advance notice. Changing jobs voluntarily? 45 days advance notice.

^ Because politicians have never been wrong before. Lord knows especially not federal politicians and certainly not republicans.

5/22/2009 7:36:06 PM

Do you think this legislation was just some mental ejaculation of a hippy liberal douche bag that spends all day crying about the big corporations????

Apparently someone or someones in the power glutches in our nation thought some credit card issuing banks were taking advantage of customers in such a way that legislation needed to be passed in teh interest of the consumer.

As far as gov't regulation goes i think there are far more questionable mandatory regulations than making BAC ensure their customers know everytime they are about to get butt raped. Lets just end any kind of regulation by the fed. If my landlord wants to leave his asbestos insulation intoxicating my family with cancerous fiber particles than its my fault for not testing my apt for asbestos along with lead, toxic mold, etc. If i don't like than I can move out AM I RITE!

5/22/2009 8:46:51 PM

Quote :

"So choose someone other than Capital One. The whole point of competition is that you look at the competitors. But if you're just going to go with the first people to say yes, you will get screwed, all the time, every time. But this is not something the government can or should fix. Your failure to take advantage of the opportunities available to you is not the responsibility of the government."

The point was not about me, it was an indictment of the FICO rating and generally the fucked up state of the economy that I can't close one card with a 31k limit and turn around and get a certain Capital One card with anything close to that limit. The system is certainly not efficient if this is the status quo, and it is. I also did a ton of shopping around and found Cap One has the best no-fee rewards cards out there. It also would have done me no good to shop around on the credit limit point because a large majority of the card offerers don't make that information known to you up front. I imagined I'd have a lowered limit, but not that low. Again, capitalism works best when all parties know all the information, saying that I'm free to choose any other card while ignoring the really stupid leg work that goes in to finding one that is suitable is being disingenuous about free markets.

Quote :

"Is there some part of the story that you're leaving out? Somehow, you managed to graduate college making 50k/year and the best rate you could get for a car loan was 14% (again, did you take advantage of competition?)"

This was right at 6 years ago now. I had NO credit history, my FICO if I remember correctly was like 480 or something when they ran it. I don't remember too many other details about the purchase as far as shopping around for rates. Suffice to say that at the time I wasn't drastically different than the type of people that were given loans to homes they couldn't afford. I assumed that with no credit history and your average auto loan running at 7% that most of the banks would be similar in their quotes.

Quote :

"You then somehow managed to acquire a credit card with a 32k limit and maintain a supposed 782 FICO score,"

It started out with a 1000 limit and I imagine 6 years of on time payments to that card, to 2 home loans, and payments to utilities tends to make everyone's FICO look great.

Quote :

"but you've still also managed to secure a (presumably) traditional 30 year mortgage?"

Yup, 20% down on a home in your favorite suburban utopia of Cary at 4.625%.

Quote :

"With a history like that, I wouldn't want to lend you money either, because it tells me that something is making it so that people don't want to lend you money and don't think you're a low risk borrower."

This statement falling everything you just mentioned sounds like the most retarded thing I've ever heard. You're telling me, a flawless credit history is a reason NOT to lend me money?

Quote :

"Yes, yes you can. But Capital One, BOA, Wells-Fargo, Wachovia, BB&T etc are not local banks."

The 14% auto loan was from RTPFCU.

Quote :

"Because your FICO score is a snapshot of your financials as they exist now, meaning with a 2k limit and a 1.5k balance you're using 3/4ths of your available credit, meaning you look like a high risk borrower."

No fucking shit asswipe. Do you read anything? It's already been discussed that this part of the FICO methodology is fucking stupid.

Quote :

"Again this is why your FICO score is just a small part of what your bank uses, and if it isn't, you need a new bank."

Well, if it were only banks interested in FICO, it wouldn't be that big of a deal.

Quote :

"Furthermore, what ever happens to your FICO score is entirely irrelevant when it comes time for the loan. If the banker you're working with says "To get a better rate with us, close your extra accounts" then it doesn't matter if your FICO plummets temporarily, because you don't get your loan from FICO, you get it from your banker."

Thats great, but it doesn't address the broken debt/credit ratio methodology.

5/22/2009 8:48:49 PM

Quote :

"Do you think this legislation was just some mental ejaculation of a hippy liberal douche bag that spends all day crying about the big corporations???? Apparently someone or someones in the power glutches in our nation thought some credit card issuing banks were taking advantage of customers in such a way that legislation needed to be passed in teh interest of the consumer. "

It doesn't matter if it's some hippy liberal or a emotionally stunted conservative. When the government goes sticking its nose where it doesn't belong that's a bad thing. This sort of legislation makes the value of lobbying go up, and then that value goes up, the government and the industry in question become more intertwined which is never a good thing for the rest of us.

Quote :

"As far as gov't regulation goes i think there are far more questionable mandatory regulations than making BAC ensure their customers know everytime they are about to get butt raped. Lets just end any kind of regulation by the fed. If my landlord wants to leave his asbestos insulation intoxicating my family with cancerous fiber particles than its my fault for not testing my apt for asbestos along with lead, toxic mold, etc. If i don't like than I can move out AM I RITE!"

And thank god the government is here to stop us from killing ourselves with evil drugs like weed! And thank god Bush had the convictions to tap american citizens to protect us from the terrorists! Anything the government does that it says is for our own good is clearly good and wholesome and should not be questioned. And if you don't believe that, you're a terrorist who wants to end all regulation and laws by the government AM I RITE!?!!?!

Look ma! I can make a strawman!

Quote :

"The point was not about me, it was an indictment of the FICO rating and generally the fucked up state of the economy that I can't close one card with a 31k limit and turn around and get a certain Capital One card with anything close to that limit. The system is certainly not efficient if this is the status quo, and it is. I also did a ton of shopping around and found Cap One has the best no-fee rewards cards out there. It also would have done me no good to shop around on the credit limit point because a large majority of the card offerers don't make that information known to you up front. I imagined I'd have a lowered limit, but not that low. Again, capitalism works best when all parties know all the information, saying that I'm free to choose any other card while ignoring the really stupid leg work that goes in to finding one that is suitable is being disingenuous about free markets."

So because it takes more effort than filling out a double sided piece of paper that they mail to you to find a good deal, suddenly the free market doesn't work? Bullshit. Let me guess, you also didn't look for your car at any dealerships that weren't within walking distance, and this too is a condemnation of the free markets and proof that they aren't working.

Quote :

"This was right at 6 years ago now. I had NO credit history, my FICO if I remember correctly was like 480 or something when they ran it. I don't remember too many other details about the purchase as far as shopping around for rates. Suffice to say that at the time I wasn't drastically different than the type of people that were given loans to homes they couldn't afford. I assumed that with no credit history and your average auto loan running at 7% that most of the banks would be similar in their quotes."

So you admit you had no credit history, and therefore nothing except your good word and your recently acquired job and somehow the fact that banks weren't keen on lending to you is a condemnation of FICO? Really? Further, you assumed, which means you didn't look. Again, your failure to take advantage of the opportunities available to you is not the problem, responsibility or domain of the government, and it certainly isn't a strike against FICO or the credit card companies or the credit system in general.

Quote :

"This statement falling everything you just mentioned sounds like the most retarded thing I've ever heard. You're telling me, a flawless credit history is a reason NOT to lend me money?"

No, your supposedly flawless credit history but complete inability to secure lines of credit from other lenders is a reason to not lend you money. It means something is scaring the other lenders about you. At first it was your lack of credit history, but 6 years later the best you can do is a lousy 2k capital one card after previously having 32k + 2 home loans? You're telling me you wouldn't be concerned either? Of course, it's just as likely that you're terrible at price shopping and dealing, which gives me as a banker no incentive to offer you any more credit or any lower interest than whatever will get you to say yes, which appears to be 2k at 14%.

Quote :

"The 14% auto loan was from RTPFCU."

So did you try to negotiate and provide other forms of assurances like assets, or at least shop around? Or did you just assume that because the first bank you went to said no, everyone else would too?

Quote :

"No fucking shit asswipe. Do you read anything? It's already been discussed that this part of the FICO methodology is fucking stupid. "

And yet for some reason you seem to think that the FICO is supposed to be something other than what it is.

Quote :

"Well, if it were only banks interested in FICO, it wouldn't be that big of a deal."

The sentiment applies to anyone you do business with. If FICO is all they're using, you don't want to be doing business with them, any more than you want to be doing business with a doctor that uses just your BMI to evaluate your health.

Quote :

"Thats great, but it doesn't address the broken debt/credit ratio methodology."

It isn't broken at all. Again the FICO score gives an evaluation based on a series of current numbers about your current status as a credit worthy person. It does this by assigning various weights to various financial information, including number of open accounts, total credit available, debt to credit ratios, length of financial history and current and past scores. A sudden change in your credit status, like the loss of 32k worth of available credit has an impact on your score based on the remaining factors. All of these factors are then summed up into a single number which is supposed to represent the level of caution a lender should use when determining your next advancement of credit. The FICO score is not supposed to provide reasons for why your score may be a certain way, nor is it supposed to provide a complete overview of your history. That is why creditors do more than get your FICO score and why you should run far from any person or business who judges you based solely upon your FICO score. I'm not sure what you think is broken about the system and therefore I can only assume that you are misinformed about what the FICO score actually is.

5/23/2009 12:24:11 AM

Quote :

"Bill Major Loss for Banking Industry boo hoo hooo hoo Don't we all feel so sorry for Bank of America, Chase Financial, CiTi Group, and RBC Centura"

As I tried to explain in the other thread, I strongly suspect this bill was lobbied for by CITI, RBC, and BoA. Afterall, no one had more to gain from increasing non-diversified risks, and therefore driving their smaller competitors out of the business, than the largest card issuers in the nation. Now, freed from competition from sall lenders they will be free to raise everyones interest rates and cut rewards programs more than they otherwise would be.

5/23/2009 2:28:50 AM

^ I doubt it.

the smaller banks had more to lose by practicing the shit legislated against in this bill. On the other hand BAC, CiTI, and chase make their bread and butter by shady policies.

5/23/2009 11:06:06 AM

^^^ Your reading comprehension is severely suspect

Quote :

"So because it takes more effort than filling out a double sided piece of paper that they mail to you to find a good deal, suddenly the free market doesn't work?"

I suppose it takes being a pompous jack ass to assume how much someone else spent looking for credit cards.

Quote :

"Bullshit. Let me guess, you also didn't look for your car at any dealerships that weren't within walking distance, and this too is a condemnation of the free markets and proof that they aren't working."

Are you an asshat by birth or is it something your practice on message boards when you're not getting laid?

Quote :

"So you admit you had no credit history, and therefore nothing except your good word and your recently acquired job and somehow the fact that banks weren't keen on lending to you is a condemnation of FICO? Really?"

No, that statement was to show how FICO was supposed to help replace the old fashion way of getting loans yet it fails in many instances thanks to busted methodologies.

Quote :

"Further, you assumed, which means you didn't look."

You're right, even after I told you I don't remember if or how many banks I shopped around for rates for, it obviously means I didn't look at all. No really, are you an asshat like this in person or just when your stupid fucking arguments fail on the wolfweb is it you get all ornery?

Quote :

"Again, your failure to take advantage of the opportunities available to you is not the problem, responsibility or domain of the government, and it certainly isn't a strike against FICO or the credit card companies or the credit system in general."

Awesome!

Quote :

" No, your supposedly flawless credit history but complete inability to secure lines of credit from other lenders is a reason to not lend you money."

Again, fuckface, I already told you once this wasn't about me. I have good reason to suspect I could go up 5 other cards right fucking now. The point wasn't about having choices, I know I have them. The point I was making is there is something busted with the FICO rating that Capital One doesn't see that I closed a card with a limit 15x the one they gave me. Ultimately, it probably isn't about FICO anyway and it's just a fact of this credit crunch we're under. But please, keep typing til your fingers bleed that having the card I have is some deficiency of my own.

Quote :

"It means something is scaring the other lenders about you."

Oh look, you're a banker now, too?

Quote :

"You're telling me you wouldn't be concerned either? "

Why should I be concerned. Why would I close a card with a limit that makes your head spend if I actually needed it?

Quote :

"Of course, it's just as likely that you're terrible at price shopping and dealing"

Really, just as likely huh? You have no clue how well I deal. Dick.

Quote :

"which gives me as a banker no incentive to offer you any more credit or any lower interest than whatever will get you to say yes"

Yes, you're right, what the fuck was I thinking. I should have pleaded harder with the online application to give me the limit I wanted. Maybe I should have used Safari instead of Firefox, would that have gotten me a higher limit?

Quote :

"So did you try to negotiate and provide other forms of assurances like assets"

I was barely 3 months into my first job out of college. I can imagine my total net worth was less than 5 grand at that point.

Quote :

"Or did you just assume that because the first bank you went to said no, everyone else would too?"

Does it really matter? I called RTPFCU up within 3 months and they lowered it to a normal fee after I had made a few on time payments.

Quote :

"And yet for some reason you seem to think that the FICO is supposed to be something other than what it is."

If you could at all comprehend one iota of what you read, you'd realize just how stupid you sound.

Quote :

"The sentiment applies to anyone you do business with. If FICO is all they're using, you don't want to be doing business with them, any more than you want to be doing business with a doctor that uses just your BMI to evaluate your health."

You tell me which major credit card carrier I can talk to that will look at anything OTHER than fico, and I'll give them my business.

Quote :

"It isn't broken at all. Again the FICO score gives an evaluation based on a series of current numbers about your current status as a credit worthy person. It does this by assigning various weights to various financial information, including number of open accounts, total credit available, debt to credit ratios, length of financial history and current and past scores. A sudden change in your credit status, like the loss of 32k worth of available credit has an impact on your score based on the remaining factors. All of these factors are then summed up into a single number which is supposed to represent the level of caution a lender should use when determining your next advancement of credit. The FICO score is not supposed to provide reasons for why your score may be a certain way, nor is it supposed to provide a complete overview of your history. That is why creditors do more than get your FICO score and why you should run far from any person or business who judges you based solely upon your FICO score. I'm not sure what you think is broken about the system and therefore I can only assume that you are misinformed about what the FICO score actually is."

Didn't read any of this drivel.

5/23/2009 5:29:26 PM

Quote :

"I suppose it takes being a pompous jack ass to assume how much someone else spent looking for credit cards. ... Are you an asshat by birth or is it something your practice on message boards when you're not getting laid? ... No really, are you an asshat like this in person or just when your stupid fucking arguments fail on the wolfweb is it you get all ornery? ... Again, fuckface, ... Dick. ... If you could at all comprehend one iota of what you read, you'd realize just how stupid you sound. ... Didn't read any of this drivel. "

I'm not making you mad am I?

Quote :

"o, that statement was to show how FICO was supposed to help replace the old fashion way of getting loans yet it fails in many instances thanks to busted methodologies."

Again, you are misunderstanding (either purposefully or intentionally) the point of FICO. It isn't a replacement, it is a convenient supplement. Until you understand this critical point, you are going to continue to think a system which accomplishes its objectives remarkably well is somehow horribly broken.

Quote :

"Ultimately, it probably isn't about FICO anyway and it's just a fact of this credit crunch we're under. "

Finally, now you're admitting that FICO really isn't your problem.

Quote :

"Why should I be concerned. Why would I close a card with a limit that makes your head spend if I actually needed it? "

And you say I've got bad reading comprehension. I was asking if you were a banker, and someone came to you telling you about how they have a perfect credit history, but can't get a line of credit better than 2k, would you not be concerned and a little cautious?

Quote :

"Really, just as likely huh? You have no clue how well I deal. Dick. "

Don't get pissy with me. You're the guy with a near perfect credit score, a (presumably more than) 50k / year job, 3 different house payments under his belt, a car payment, >30k in liquid assets, over 100k in illiquid assets who had a 32k revolving credit account and can't get anything better than a 2k revolving account from Capital One. Like I said, either there's a part of this story you're leaving out, or you just really suck at negotiating, or you just don't really give a damn in which case I can't figure out why you're so hot a bothered about your FICO score when it clearly doesn't matter.

Quote :

"Yes, you're right, what the fuck was I thinking. I should have pleaded harder with the online application to give me the limit I wanted. Maybe I should have used Safari instead of Firefox, would that have gotten me a higher limit? "

Of you could have called a human... I would think an expert wheeler and dealer such as yourself with thousnads in assets would be able to get through to a live human to talk about your new line of credit. After all, us poor plebeians and pompous jack asses manage to do that just fine.

Quote :

"Does it really matter? I called RTPFCU up within 3 months and they lowered it to a normal fee after I had made a few on time payments. "

So then what is your problem? It seems like the system worked just fine.

Quote :

"You tell me which major credit card carrier I can talk to that will look at anything OTHER than fico, and I'll give them my business. "

They all do, but you have to talk to someone other than a computer first. And even if they didn't, if the business isn't giving you what you want, why are you doing business with them in the first place? Again, your failure to take advantage of the opportunities present is not the domain or responsibility of the government.

[Edited on May 23, 2009 at 9:19 PM. Reason : asdf]

5/23/2009 9:16:50 PM

looks like a lotta blah blah blah to me

Anyone else care to read that crap and let me know if it is a waste of time or not?

5/23/2009 11:18:48 PM

Suck on it anime fag

http://www.bloomberg.com/apps/news?pid=20601213&sid=aDdhtcEykjR8

Quote :

"“It’s not obvious to me that having the score change because of limit cuts is the wrong thing. The bank’s action may signal a riskier environment and the view that you are a riskier consumer.” "

Sounds like beka. The bank just decides to limit some risk even though there is no material change in the debtors ability to pay. Cleary, the bank knows something the debtor doesn't.

7/1/2009 4:47:08 PM

Quote :

""Gabby Ornelas, a former teller at the giant Bank of America Corp., remembers the training sessions. And she remembers her marching orders: "Sell, sell, sell." Ornelas was instructed to use her Spanish language skills and Latina heritage to sign up customers for as many kinds of banking services as possible, she said -- services that led to lucrative fees for the bank and financial entanglement for many customers. "We were coached every day to push multiple checking accounts, credit cards and debit cards even when the customer didn't understand how to use them," said Ornelas, who lives in Landover Hills, Md., a town with a large immigrant population and a per-capita income of less than $19,000. In one case, she described a Central American mother of three who came back to see her at the bank, distressed about $300 in overdraft fees incurred after Ornelas persuaded the woman to open a second checking account. (...) The former workers said they were going public to lay out what they saw as a little-known side of BofA's business model: encouraging working-class customers to sign up for high-interest-rate credit and cash advance services and structuring an array of check and debit card services to maximize overdraft fees and other charges.""

http://www.latimes.com/business/la-fi-bofa30-2009jun30,0,1275075,full.story

7/1/2009 5:24:01 PM

The theme of this thread and of the current recession has been that stupid people dont understand personal finance. The proposed solutions are A) to use the law to prevent stupid people from getting loans/credit/accounts/whatever they might not know how to use or to B) educate the populace on personal finance.

I'll take a little out of column a and a lot of column b pls.

7/1/2009 5:30:57 PM

YEah, I dunno why letting banks fail that give money to stupid people would be behind option C.

That makes entirely too much sense.

7/1/2009 5:53:49 PM

Quote :

"The bank just decides to limit some risk even though there is no material change in the debtors ability to pay. Cleary, the bank knows something the debtor doesn't."

Yes they do. Namely their own risk. When credit was easy and cheap and the economy was booming, a risky loan was less risky to the bank than it is in a time of economic hardship, so they cut your limit, thereby reducing the risk you represent to them by having high limits during a time when your ability to pay back may be in question. I seriously don't understand what you find so difficult about the whole credit rating deal, it really is simple, everything you do has a positive and negative effect on your credit, the weight of those effects changes based on time and the environment you are in, or did you really think that college kids could get low APR card with huge credit limits from guys with free T-shirts because their risk (if they existed in a vacuum without any relation to the economy around them) was really low?

Further, the two consumers quoted hardly have my sympathy. The one was counting on her "credit cushion" because she was worried about the down economy, but what she's really concerned is that she won't be able to finance a new house and car at low rates? If you're worried enough about the down economy that you need to rely on your credit cushion, you shouldn't be buying new cars and houses. The other guy has 12 different credit cards? Yeah, if I were a bank, I would be reevaluating his risk level too.

^ Yeah, I prefer a mix of B and C.

[Edited on July 1, 2009 at 7:09 PM. Reason : dasf]

7/1/2009 7:08:48 PM

I think their is a difference between having policies and fees to which dumb people keep making the same mistake or do not use common sense and having your business model or profit strategy, at least for the consumer division; based on taking advantage of people's lack of expertise in personal finance, massaging contracts with piles of paperwork containing clever ways to squeeze more money out of their customers, and trying to make up for lost profits in other segments of your business by find arbitrary ways to increase the loan interest rate or fees.

The classic story being (that i know multiple people that got hit by this) when Person A deposits $100 into his account. Makes two small purchases with his debit card Friday evening. Before this though an outstanding check or automatic debit occurs friday afternoon depleting his account to say $20. On Saturday thinking they have $78 left they purchase a $50 [insert item here]. Monday they are shocked to discover not only that, oopps i fucked up and got a $35 overdraft fee, but in reality they got 3 overdraft fees. The reason being some backwards manipulative policy that BoA justifes in processing the "bigger" ticket item first causing the first $35 overdraft fee, then two more for the two small debit card purchases.

Ya ya ya some of our perfect holier than thou hyper capitalist soap boxers are going to be like ZOMG they should carry their ledgers to balance their checking account wherever they go!!! Get real in the modern age of debit purchases and automatic electronic debits I would say its almost impractical to log into your homebanking on your iphone three times a day or scribble in your balance while 10 people wait for you in line at the Kangaroo. Yes you fucked up that is why you get the $35 overdraft charge but manipulating your bank policies as the situation above is just ethically wrong.

7/1/2009 8:12:04 PM

Quote :

"Ya ya ya some of our perfect holier than thou hyper capitalist soap boxers are going to be like ZOMG they should carry their ledgers to balance their checking account wherever they go!!!"

No, what they should do is research this kind of thing - like how the bank calculates overages - when they open the account, or, failing that, change banks to a different bank which does not practice this if they get burned by it.

The problem is that people don't go to this basic effort. (Beyond, of course, actually bothering to keep tabs on their spending, which of course may explain why the government can't seem to balance a checkbook either - because they're elected by morons who can't manage that task, either...)

Also, I can't help by comment on the irony of how quick you are to dismiss personal responsibility when it's likely to hit white, middle-class people like yourself but so quickly drag out the example of Shaniqua (or some other ghetto-sounding name you decide to conjure up for the moment) and her infinite children on welfare when it's likely to cost you money.

[Edited on July 1, 2009 at 8:22 PM. Reason : Shaniqua lives.]

7/1/2009 8:19:02 PM

should they be able to manipulate it like that? If their policies explicitly say so, then sure. Is it a shitty thing to do? Absolutely. And you are free to go to, say, a local credit union, where such policies are few and far between.

At the end of the day, your poor schmuck still over-drafted his account, no matter how the numbers are added up. What you fail to note is that the guy hasn't yet been hit w/ the overdraft fee at the start of the scenario, when he has, by your own admission, already fucked up.

7/1/2009 8:21:17 PM

so banks with explicit business practices of seeking out the ill-informed and poor and screwing them for fees and overages and whatnot is cool with everybody? i see.

7/2/2009 1:52:42 AM

There's lots of things that aren't okay - this being one of them. This, however, does not mean automatically that it should be illegal, or that the law is the first (or best) remedy.

Not that I expect you to grasp this subtlety. Carry on.

7/2/2009 6:55:30 AM

Quote :

"What you fail to note is that the guy hasn't yet been hit w/ the overdraft fee at the start of the scenari"

huh??

considering that many of these banks took big gov't bail out money; they kind of sacrificed themselves to the pen of the legislature anyway. The gov't wants its money back eventually and preferably not simply by conjuring up new crafty ways to shake people for money.

Yes it would be nice if people were not so dumb and stopped using this shitty banks BoA, Chase,etc

[Edited on July 2, 2009 at 7:34 AM. Reason : l]

7/2/2009 7:31:18 AM

Quote :

"There's lots of things that aren't okay - this being one of them. This, however, does not mean automatically that it should be illegal, or that the law is the first (or best) remedy. Not that I expect you to grasp this subtlety. Carry on. "

7/2/2009 7:36:35 AM

Considering the fact that banks have considerable money and influence; enough to lobby congress for favorable legislation throws at the free
markets approach anyway as related to this industry. Why else do you think Credit Unions are restricted to only allow a certain scope of
membership......

7/2/2009 8:21:08 AM

Quote :

"YEah, I dunno why letting banks fail that give money to stupid people would be behind option C"

that options doesn't conflict with either A or B. A and B seek to protect individuals from themselves. Banks should be allowed to fail just like every other business if they still manage to sell shit to retards who cant pay them back regardless of a or b

[Edited on July 2, 2009 at 9:33 AM. Reason : r]

7/2/2009 9:32:50 AM

Quote :

"so banks with explicit business practices of seeking out the ill-informed and poor and screwing them for fees and overages and whatnot is cool with everybody? i see."

personally i think these people should have been better educated by our government so they would be able to understand personal finance. As it is, the only problem with stupid people getting loans is that the American people end up paying for it. If you get rid of bailouts and freddie and fannie then that backstop disapears and lenders become more careful.

As a stop gap, making it illegal for stupid people to get loans is not such a bad idea, but any such law should have a built in timeout.

7/2/2009 9:36:40 AM

Quote :

"Yes they do. Namely their own risk. When credit was easy and cheap and the economy was booming, a risky loan was less risky to the bank than it is in a time of economic hardship, so they cut your limit, thereby reducing the risk you represent to them by having high limits during a time when your ability to pay back may be in question. I seriously don't understand what you find so difficult about the whole credit rating deal, it really is simple, everything you do has a positive and negative effect on your credit, the weight of those effects changes based on time and the environment you are in, or did you really think that college kids could get low APR card with huge credit limits from guys with free T-shirts because their risk (if they existed in a vacuum without any relation to the economy around them) was really low?"

I don't get it? You don't get it, at all. I understand why banks are cutting lines of credit to limit THEIR exposure, but why should that negatively effect someone that had no material change in their credit profile. Hell, by bank A cutting their line of credit, bank B also has less risk to the same consumer and stands a higher chance of getting paid off in the event of a default because the individual can't run up debts on bank As card.

Quote :

"Further, the two consumers quoted hardly have my sympathy. The one was counting on her "credit cushion" because she was worried about the down economy, but what she's really concerned is that she won't be able to finance a new house and car at low rates?"

Are you kidding? Your reading comprehension really does fly out the window when you're trying desperately to argue a point you've already lost. What part of this

Quote :

"in case she was affected by the decline in the economy."

don't you understand?

Quote :

"If you're worried enough about the down economy that you need to rely on your credit cushion, you shouldn't be buying new cars and houses."

No, you're making entirely too many assumptions (like you always do about everything) with not nearly enough information. You don't know what her savings are like, you don't know what she intends to spend on a home or a car (if at all, we don't know what liberties the story writer took), etc. We do know that she has a 760 credit score and is a paralegal, so we could be reasonable to assume she isn't a complete financial illiterate.

Quote :

"The other guy has 12 different credit cards? Yeah, if I were a bank, I would be reevaluating his risk level too."

Again, thats fine for a bank to do that, but it shouldn't negatively effect his credit score. It's what I've maintained all along and you've yet to make a compelling case as to why it should be the status quo.

7/2/2009 10:33:22 AM

credit scores are dumb ass voodoo shit. They're really only meaningful for people with really shit credit scores and people with really good credit scores. For folks in the middle, the credit score is pretty much a universally agreed upon random number that gives banks something to point at when they pick whatever percentage best suits them for your loan. Until you get 10 years of on time payments under your belt, you aren't really going to have much pull. Its complete bullshit for sure, but we let it happen cause we want to borrow money.

For house loans and car loans this isn't so much of a problem. You're going to get your rate and pay that shit for the next few years. The problem comes from short term credit like credit cards. There are all kinds of bullshit theories about using credit card to better your credit score. like "dont close your credit cards cause they see that as you having less available credit" Which is absolutely fucking stupid because having a credit card with no balance vs closing that card has 0 effect on your ability to pay back a house loan. Any reputable bank knows this and is instead going to look at past loan payments + income + assets.

The people who get fucked the most are those who never build up long term credit and go straight to a credit card and then start carrying a monthly balance.

7/2/2009 11:50:37 AM

Quote :

"The people who get fucked the most are those who never build up long term credit and go straight to a credit card and then start carrying a monthly balance."

you are right these people are dumb.

Also what is dumb is if say person A has a medical emergency or a major car problem that they are forced to charge on their 9.95% capital one card due to not having enough in savings. A couple months later while on vacation they forget and end up being a week late on their phone bill; which is of course a completely different company. The bank hears they were late on their phone bill and uses this as an excuse to jack their interest rate to the 20.95% default limit, even if they were Never late on a credit card payment. Of course until recently this consumer might not realize at first that this happened unless they scrutinize their credit card bill to ensure their interest rate has not changed month to month.

Sure they can never use the card again but they still have to pay off their balance.

7/2/2009 12:43:48 PM

Quote :

"personally i think these people should have been better educated by our government so they would be able to understand personal finance. As it is, the only problem with stupid people getting loans is that the American people end up paying for it. If you get rid of bailouts and freddie and fannie then that backstop disapears and lenders become more careful. "

This.

Quote :

"I understand why banks are cutting lines of credit to limit THEIR exposure, but why should that negatively effect someone that had no material change in their credit profile."

Because people don't exist in a vacuum. Again, do you really think that the hey day of easy credit was because so many americans were individually low risk? IOW, as the economy as a whole has changed, the amount of risk that each individual person represents to the banks have changed, and therefore, so does their credit score, which is supposed to represent that risk.

Quote :

"No, you're making entirely too many assumptions (like you always do about everything) with not nearly enough information. You don't know what her savings are like, you don't know what she intends to spend on a home or a car"

Doesn't matter. If you are worried about the effect of the economy on you enough to be relying on your credit to get you through, then you shouldn't be buying new cars and homes. The only way this makes sense is if she plans to come out positive after the deal (downsizing to a cheaper home / car) in which case she doesn't need the credit anyway. I suppose that yes, she could also have a significant amount of savings, enough to buy a new product and still come out with cheaper monthly payments than she has now, but again that leaves the question of why she's so keen to drain her savings when she's worried about how the falling economy is going to affect her.

Yes, it is possible the reporter put that in there on his own and it wasn't a fear she expressed, but you have no evidence of that. However, since her FICO score really only matters when she's looking to take on further debt, the general point still stands that if you're planning on needing to rely on your credit in the near future, you shouldn't be seeking out new forms of debt.

Quote :

"Again, thats fine for a bank to do that, but it shouldn't negatively effect his credit score. It's what I've maintained all along and you've yet to make a compelling case as to why it should be the status quo."

Why shouldn't it? He's a guy with 12 credit cards in an economy where many people's jobs and income are uncertain. That makes him riskier to the bank now than he was a few years ago when the economy was good and jobs were steady. Why shouldn't his credit score change to reflect his new level of risk?

Quote :

"Any reputable bank knows this and is instead going to look at past loan payments + income + assets. "

I've been saying this for pages, but apparently the only banks Fail Boat has ever known are ones that pull a FICO score from Experian.com and call it a day.

Quote :

"The bank hears they were late on their phone bill and uses this as an excuse to jack their interest rate to the 20.95% default limit, even if they were Never late on a credit card payment. Of course until recently this consumer might not realize at first that this happened unless they scrutinize their credit card bill to ensure their interest rate has not changed month to month. Sure they can never use the card again but they still have to pay off their balance."

1) If they signed a contract that allows their rate to change without notice, they should be checking their bill every month.

2) This is where consumers need to take their credit into their own hands and either not sign with companies that do this, appeal or close out the account as even with their medical emergency, they should be able to get a better rate somewhere else and just close the account. If more people would do this, the banks would stop pulling such bullshit real fast, because it means they're losing customers.

Incidentally, this is also where better financial education should come into play. People should be aware that there are other options for these things than using credit cards. Many hospitals will allow payment over time and if you have the chance, you can secure personal loans from banks which as I said before are usually competitive with credit card rates, and even better are fixed rate.

7/2/2009 2:38:25 PM

Quote :

"There's lots of things that aren't okay - this being one of them. This, however, does not mean automatically that it should be illegal, or that the law is the first (or best) remedy. "

what would you suggest? the market will work it out? of course. that's the answer to everything.

also this thread has reminded me to cancel the credit card i have that just decided to raise my rate for no reason.

[Edited on July 2, 2009 at 2:53 PM. Reason : .]

7/2/2009 2:50:06 PM

Quote :

"Because people don't exist in a vacuum. Again, do you really think that the hey day of easy credit was because so many americans were individually low risk? IOW, as the economy as a whole has changed, the amount of risk that each individual person represents to the banks have changed, and therefore, so does their credit score, which is supposed to represent that risk."

What? No really, what? Are you essentially saying that because the economy is in the shitter, EVERYONES credit score should be automatically lowered by some fixed percentage because they are all inherently more risky? Because that is certainly what it seems like you are saying.

Quote :

"If you are worried about the effect of the economy on you enough to be relying on your credit to get you through, then you shouldn't be buying new cars and homes. The only way this makes sense is if she plans to come out positive after the deal (downsizing to a cheaper home / car) in which case she doesn't need the credit anyway. I suppose that yes, she could also have a significant amount of savings, enough to buy a new product and still come out with cheaper monthly payments than she has now, but again that leaves the question of why she's so keen to drain her savings when she's worried about how the falling economy is going to affect her."

Again, you continue to assume way too fucking much in an attempt to make a point. We don't know nearly enough about her situation. We don't know what her bills are, what she intends to do if she is laid off, what her rate is on her credit cards (entirely possible they are pretty low thanks to her good credit score). That fact that she has a good score, works a white collar job, and has such a massive limit tells me that she has had that card for quite awhile and knows what she is doing finance related. I love how you try to just automatically assume the worst case scenario for her in an attempt to stick to your original point which was first destroyed by me when I brought this up weeks ago and now confirmed by a national media outlet echoing my exact point.

Quote :

"Yes, it is possible the reporter put that in there on his own and it wasn't a fear she expressed, but you have no evidence of that."

Well, welcome to reality. Everything you said previous to this about her situation is now null and void.

Quote :

"However, since her FICO score really only matters when she's looking to take on further debt, the general point still stands that if you're planning on needing to rely on your credit in the near future, you shouldn't be seeking out new forms of debt."

This doesn't have anything to do with a discussion about her score lowering when the bank closes some of her credit line. If she needs a life coach, maybe she'll be in touch with you.

Quote :

"Why shouldn't it? He's a guy with 12 credit cards in an economy where many people's jobs and income are uncertain. That makes him riskier to the bank now than he was a few years ago when the economy was good and jobs were steady. Why shouldn't his credit score change to reflect his new level of risk?"

Now you're arguing my point. I contended originally that someone with more credit lines shouldn't be negatively effected by the closing of those lines. This was anecdotally verified by a caller to Clark Howard who said her bank advised her exactly this and yet it lowered her FICO score.

Quote :

"I've been saying this for pages, but apparently the only banks Fail Boat has ever known are ones that pull a FICO score from Experian.com and call it a day."

I haven't been arguing that point and never claimed anything like that. Thanks for failing.

7/2/2009 3:03:25 PM

Quote :

"Ya ya ya some of our perfect holier than thou hyper capitalist soap boxers are going to be like ZOMG they should carry their ledgers to balance their checking account wherever they go!!! Get real in the modern age of debit purchases and automatic electronic debits I would say its almost impractical to log into your homebanking on your iphone three times a day or scribble in your balance while 10 people wait for you in line at the Kangaroo"

First off, I do agree there is a lot of shady business practice that I do not agree with coming from banks and credit card companies etc. Rates getting changed should definitely have a little more notice than they do. And I also agree with what people have said about a lot of the things that help/hurt credit scores are stupid.

However in regards to keeping track of your own finances and keeping balances/making sure you never overdraft etc., it is not that hard at all. I usually check first thing when I get in at work and spend a few minutes quickly scanning my credit card statements and my bank accounts. I do the same thing in the evening before I go to bed. I take about 15 minutes to glance at my statements and I also update my expenses spreadsheet.

In total on a normal day (unless im weighing larger/off-normal purchases) I spend no more than 25 minutes total over the entire day looking at my accounts online. This little bit (and heck it doesnt have to be done every single day if you dont want) should pretty much eliminate any overdrafts or charging over limits etc. There really isnt an excuse for that.

Which leads me into the fact that I will be pissed if banks start charging everyone monthly for usage of standard checking accounts (http://moneyfeatures.blogs.money.cnn.com/2009/07/02/is-free-checking-on-its-way-out/) simply to make up for the fact the government is cracking down on their overdraft policies. Basically, he is suggesting the government might move towards holding the hands of people who aren't financially responsible adults (aka can't balance their finances), which might cause the banks to charge monthly to recuperate the lost profit.

[Edited on July 2, 2009 at 3:22 PM. Reason : ]

7/2/2009 3:18:03 PM

one excuse is not having easy access to the internet or sources for how to get this sort of knowledge of how to manage your own finances.

7/2/2009 3:20:08 PM

well certainly. And in that case, yes it is slightly less convenient, but only causes you to do it like it was done for all the years before online banking.

7/2/2009 3:25:14 PM

Quote :

"Which leads me into the fact that I will be pissed if banks start charging everyone monthly for usage of standard checking accounts "

I thought this was fairly common. I pay $1 to the NCSECU

7/2/2009 3:40:28 PM

most commercial banks have free checking.

[Edited on July 2, 2009 at 3:43 PM. Reason : for individuals.]

7/2/2009 3:43:25 PM