The Coming Credit Card Crisis

Thank you for your program and this one in particular.

I want someone to explain how we as a nation can accept outrageous interest rates, the foundation of credit card companies. In effect, they have benefited FOR YEARS from the status of "legal loansharks".

The lack of oversight (or guidance) is disturbingly similar to the outrageous mortage "deals" that we're now reeling from as a nation.

While you're at it, perhaps you can explain how American Express can now call itself a bank and reap the benefit of bailout money! This is sick.

Laura: I was surprised to hear you ask me "Why don't you just say "cash only"?". Would YOU shop at a store, restaurant, gas station, etc that DIDN"T take credit cards? The (small) merchant is getting "crunched" and, usually, has NO viable option. The surprise surcharges, chargebacks, fees, assessments, and whatever else "they" can dream up are staggering. And, there's no end in sight.
GREAT PROGRAM, wouldn't miss a day of it.

Background: Over 20 years ago I was one of Kerry York's clients who successfully completed the consumer counseling process after several emergency surgeries left me with financial troubles. NPR later did and interview w/me. In 2004, after taking care of an elderly father, I was forced into bankruptcy (Cht 7). I am a self employed daughter of a bookkeeper who is VERY responsible about communicating and paying my bills. I have a few points to make about the whole credit system:

1. It exists to protect big business-not consumers--that is where the problem lies. Why can't I shop around for the best rate when I am looking for credit (i.e. a computer lease) and yet that penalizes my score? Recently, I had decided to get 3 bids on a computer system before making up my mind--by the time the first two checked me out, my credit score was so low the last one which had the best pricing offered me the highest interest rate! It is a set up to fail. I had to go with the first company, which was not the best price but gave me a better financing rate! It does not make sense!

2. The one time I was 30 days late on a bill was when I buried my Dad. I called the company and took care of it but still got a black mark on my credit report. Can't this go BOTH ways? My credit report doesn't show that I paid a funeral parlor $25 a month for several years to pay off his cremation bill--why aren't THEY required to send in a GOOD mark for my credit report? Same with my doctors & hospitals (6 of them)--they each get a payment like clockwork. It took me 3 years to pay off my colonoscopy but I paid it. But that goes unnoticed. It should go on my credit report as a GOOD mark that says--this woman pays her bills-no matter what!

3. Consumer counseling affects your credit adversely and stays on your report longer than a bankruptcy does.(unless that's changed--I think not) It's as if the system is penalizing someone for asking for help and actually taking responsibility to pay their bills. It doesn't make sense.

4. I would never have started using or even attained a credit card for my business if banks would be better about giving small biz "seasonal lines of credit". For instance, I'm a graphic designer who bought a small advertising shopper 11 years ago "for cash flow." It worked great all year long but clients stopped paying me in the winter so I had to take out a biz credit card that winter to keep afloat. That spring I approached a bank for a loan to pay off the credit card debt which had gotten ridiculous because of the high interest rates and also asked for a seasonal line of credit because I didn't want to repeat this cycle. I was always told the same thing--we'll give you the loan but not the line of credit. I told them, I'll see you in two years to do this again because , the nature of my business was, people stop paying me in the winter! It took me almost 20 years to find a bank who would listen to me and I haven't had a biz credit card since.

My suggestions to help the little businesses:

1. Stop penalizing our credit reports because we shop around for the best credit deal OR mandate lending or leasing companies disclose their interest rates to you BEFORE they check your credit and lower the score.

2. Start giving us some good points as consumers. Mandate that companies whose accounts we settle admirably--like hospitals and others we make payment arrangements with--have to give us points which make our credit score go up.

3. MANDATE that all credit card and lending institutions use the POSTMARK date on the envelope as the posting date. If the IRS and Publishers Clearing House can do it--then so can they. Why should I get a late fee when I mail a check 10 days before the due date but either the post office messes up or they post it late?

My biggest point is that almost everything about the credit industry is to protect themselves and screw the consumer. I see it as that simple. The boards who make decisions about this stuff need some consumer advocates to sit on them.

Thanks for listening. I love your show--just wished it was longer sometimes.