President Obama is meeting on Thursday with the CEOs of fourteen top credit card issuers. According to reports, the President will tell them that they have to "make those increases a lot easier to understand" and "make it so it doesn't look like you're taking advantage." Those, at least, are the words Chuck Todd used on the NBC Nightly News on Wednesday evening to describe what the President will "flat out tell" the executives. I don't know whether his characterization is accurate, but if it is, it would be plainly insufficient to deal with these brazen pirates.
The American people do not want the unconscionable interest rate increases made "easier to understand"; we want them reversed. We don't want it made so it doesn't look like we are being taken advantage of; we want not to be taken advantage of.
At the same time, Barney Frank is moving a "Credit Cardholders' Bill of Rights" (H.R. 627) through his committee. But will it be strong enough? Not without significant changes, which will not happen without massive pressure from the public. Let's put that pressure on.
For the good of the nation, as well as their own political good, President Obama and the Democrats in Congress need to get out in front on this growing issue and demand not merely a rollback of the rate increases but an overall lowering of rates to a reasonable level. Perhaps the threat of a presidential push for a federal usury law would get their attention, but we need more than the threat--we need to have such a law enacted, with teeth and retroactivity.
{Historian Robert S. McElvaine is Elizabeth Chisholm Professor of Arts & Letters at Millsaps College & author of:
The Great Depression: America, 1929-1941 
(Random House) and
Down and Out in the Great Depression: Letters from the "Forgotten Man" 
(North Carolina).
His latest book is Grand Theft Jesus: The Hijacking of Religion in America 
(Crown).}
But the credit card companies are not making obscene profits now. BofA lost money in its credit card division. inspite of the obscene interest rate charges (made money on Investment mgmt services and Refi)... they all are taking big hits. When they lose money, our bank regulations force them to raise them or be insolvent.
Want rates not to go up... then pay our bills. A 20% default rates means a doubling of ratest just to breakeven /make up for the losses of those not paying. We all pay more for goods due to shoplifters.
Americans amassed 14 trillion in personal debt. Thats equal to the GDP. First time since 1929. 80% of americans have no networth, thus almost all of the borrowing is w/o any security backing up the debt.
In the mean time , we have asked banks to be less risky/deleverage which means less loans and then we have asked them to lend more.
We aren't here so much because of banks , but because of what we voted for 30 years and the cheap imported goods we bought while our plants closed/good jobs moved offshore to low wage plants ...that we built and the huge trade, budget deficits/ debt we used up pretending that all was right.. hiding declining wages. Chanting Free trade when no one else played that game.
Regards
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The Bankster CEOs are thinking of Obscene profits again. Citigroup's stock price has already gone up by $2 and that means CEOs have cashed out MILLIONS in just a short time.
Insider Stock sales should be STOPPED until the TARP Bailout/Loans have been repaid in total. These Banksters should not be allowed to profit off of the US Taxpayer monies.
STOP the Banksters now - Help the Consumer!!!
Please call your Congress Reps. Toll Free Capitol switchboard 1-800-828-0498
White House Comments 202-456-1111, Switchboard: 202-456-1414
The Credit Card Banksters can currently borrow from the Fed at 0%.
I get my statements electronically - operating costs are minimal. The days of Multi-Million dollar salaries, Bonuses, and perks needs to be Over.
Obscene profits are OVER for the Banksters - at least until they repay the US Taxpayer.
Let's out them!!
...Just stop playing their reindeer games!
Here is a simple question: "If you raise interest rates on credit cards, will that cause consumers to spend or become more conservatives with their money?"
What are these Credit Card Company CEOs are thinking? I have a hunch such extreme interest rate increases reflects on the overall health of their industry (Their debt, remember, was securitized too). These companies are not going to recover from rate hikes, only inspire more credit card defaults. Maybe they think the Bankruptcy Reform Bill will protect what's owed them, but with 600k people losing their jobs every week a flood of credit card defaults is on the horizon. A flood the Government is not prepared to address before the Credit Card Companies die.
These CEOs need to wise up and make it easier for their card holders to pay them back not harder ... raising rates will only lead to regret for all involved.
The Bankster CEOs are thinking of Obscene profits again. Citigroup's stock price has already gone up by $2 and that means CEOs have cashed out MILLIONS in just a short time.
Insider Stock sales should be STOPPED until the TARP Bailout/Loans have been repaid in total. These Banksters should not be allowed to profit off of the US Taxpayer monies.
Please call your Congress Reps. Toll Free Capitol switchboard 1-800-828-0498
White House Comments 202-456-1111, Switchboard: 202-456-1414
I've wondered the same thing. If someone is late or lost a job or had a sudden illness and have to turn to the credit card...constant raising of the interest rate (when a high of 15% ceiling would be EXTREMELY profitable for banks that get their money for 0, 1, 2, 3 %.
But it's about QUARTERLY profits.
They don't care about the long term health of the economy. Just getting THEIRS while they're in the game.
But so far, they're only pretending to do that.
As is so often the case, they really do not seem to grasp either the level of piracy going on or the level of anger that is inspiring in Americans.
If they were smart, they'd get way out in front of this. But so far, they're just playing for the camera.
Unbelievable. And only possible in America.
Our FICO score is listed as N/A b/c we don't use debt. Our mortgage broker told us that even if we cash flowed $1m a month, we would not be able to get a loan with no FICO score.....SO...that's how hard it is to not use credit cards.
The rating agencies, FICO scores etc. are a giant scam. They charge for reports, "monitoring" and then the banks peddle expensive "prepaid credit cards" for people in a bad credit/ no credit situation.
Something is wrong with a system that penalizes you for being debt free and rewards you for consistently living above your means with 5-6 active cards, a car loan, a home loan and a student loan. (Recommended by experts to get a good FICO score.)
So the government should be able to dictate what interest rates companies can charge now? Considering the risk involved in holding that debt, does it make sense for investors to buy risky credit card debt at low yields? It doesn't to me. And what is a "reasonable level"? A level that suits the government's agenda or the political winds of the time?
However, there should be caps on rates that companies can charge. There should be hard limits for individual accounts tied by a fixed interval (whatever that interval may be) over prime rates. There should be limits on what fees they can charge for being overbalance, late, or whatever else they can think up.
Banking used to be a boring, slow-paced 'industry' - with darned reasonable profits. Perhaps it should be again?
Not a chance
Bankers need to charge 24% and high fees to survive...
You just don't understand how important the banks are