I thought Loan Sharking was illegal? But not if you make enough at it to lobby congress. Every time they talk of reform, the consumer gets the shaft and the game goes on even deeper than before.
Take some time to google up predatory lenders and you will read some real stories from real folks many you might assume are low income folks but think again. These are everyday hard working, middle income Americans who you probably would not hear from unless it be the Internet and the time to look at what they are saying.
So I asked around to friends who never say much about the stuff that gets under their skin and was very surprised to find that almost every one of them have a bad story about more than one credit card company and at least half of them with Bank Of America.Maybe that is because they are the largest? And perhaps that is because they have bought many smaller company’s in resent years?
This surprised me very much as I thought I was one of a few. I had always thought of them as a reputable company but as I see, they have diminished their name as one of those “gotcha” type companies you wish you never got involved with in the first place. They have become the poster child for reform but will we get any this time around ? Oh, I’m sure we will see congressional leaders “speak well” for the taxpayers but the bottom line is these companies are major funds for their campaigns so who do you really think things are worded for regardless of how good the speech is.
In knowing that the taxpayer has a large investment in the company, it seems as our money is being used against ourselves. The tactics seem to revolve around a ill guided system of credit rating that lenders can have some control of when they want it to be in their favor. Those of you who never run a balance will find yourselves with lower credit availability than you are worth. Those who do run a balance, will find yourself with higher than should be limits and high interest rates.
The first trick is to get you to run a balance. This is done with a promise of low rates or other promotional ideas, either for a short or extended period. Some so good that you might think yourself a fool to go to the bank for the same money. After all you must need it for something to use it in the first place.
When they feel that you have no chance of paying the balance off in the near term if a sudden change of terms were applied, they begin to work on just that. Using various methods to be sure. One method is to lower credit ceiling so that you owe more than 50% of your available credit line. That makes your credit score go down and classifies you as higher risk and will cause your rate to go up.
Because I do get a free credit report from each of the credit reporting agencies spread out once every four months, I keep track of just who is looking. I had one credit card co check every month before selling account to new bank (makes lenders think you may be seeking additional credit) this spiked my credit score lower and ran my rate up. Well I paid it off and canceled the card. What did that do for me? Canceling the card actually lowered my credit score once again because it lowered my available credit while debt remain the same and caused my interest rates with all other creditors went up this time.
It simply is a no win situation. Had I not been watching my report for fraud (identity theft) I would not realize what or why it was happening. Any attempt to make your situation better actually makes it worse. Go Figure?
While I understand the need to prop-up the banks without really nationalizing them (although appearances are strong), just at the root of the matter is lending practices itself. This is what got the banks in need of bail-out in the first place. Well it is still going on but with the aid of your money. So many folks are paying for it at both ends!
Well I hate to sound like Dick Cheney but I can only wish Bank Of America failure. Unless the government can establish some guidelines for credit ranking, this practice will continue because it can. Please lets not do a reform again, I don’t think the public can afford giving the credit card companies a new round of what they want. Seeing a release of rate caps disappear came from one of the last few reforms. No matter what they want to do they will change your terms that allows them to do what they could not do in the original that you may have spent the time to read but can not understand the details of the amendment/change.
Someone needs to act on the public behalf and if not the federal government, then the states need to take up the issue but I don’t think any of them have the guts to do so. Or could it be that on one of those reforms, the states have lost the right to regulate them? Yes I believe in free markets but gee whiz, I believe in creating rules for those who will not behave. That’s is why murder is illegal. If they continue, I think loan sharking should also be legal because why should these companies be the only ones to make money at it. I’d like a shot at it !
The only thing the current laws provide for is to keep the little guy out of the action while protecting corporate loan sharks and now they are doing it with your money.
See the updates link at bottom of this post.
New legislation a hoax , BOA – One mans typical story