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PBS Frontline Secret History of the Credit Card
In “Secret History of the Credit Card,” FRONTLINE® and The New York Times join forces to investigate an industry few Americans fully understand. In this one-hour report, correspondent Lowell Bergman uncovers the techniques used by the industry to earn record profits and get consumers to take on more debt.
“The almost magical convenience of plastic money is critical to our famously compulsive consumer economy,” Bergman says. “With more than 641 million credit cards in circulation and accounting for an estimated $1.5 trillion of consumer spending, the U.S. economy has clearly gone plastic.”
Millions of American families use their personal, general-purpose credit cards such as Visa, Mastercard, American Express and Discover to make ends meet; credit cards have been a discreet lifeline for families in financial straits.
But other consumers, like actor and author Ben Stein, use plastic purely for convenience. While it would appear that Stein — who says he charges a small fortune every month on his credit cards — is the ideal customer, in reality, he is what some in the industry call a “deadbeat.” That’s because he pays his balance in full every month.
The industry’s most profitable customers, the ones being sought by creative marketing tactics, are the “revolvers:” the estimated 115 million Americans who carry monthly credit card debt.
Ed Yingling, incoming president of the American Bankers Association, tells FRONTLINE that revolvers are “the sweet spot” of the banking industry. This “sweet spot” continues to grow as the average credit card debt among American households has more than doubled over the past decade. Today, the average family owes roughly $8,000 on their credit cards. This debt has helped generate record profits for the credit card industry — last year, more than $30 billion before taxes.
Some experts say the profitability of credit cards really began twenty-five years ago, when the banking industry successfully eliminated a critical restriction: the limit on the interest rate a lender can charge a borrower. Deregulation, coupled with a revolution in technology that enables the almost real-time tracking of personal financial information and the emergence of nationwide banking, has facilitated the widening availability of credit cards across the economic spectrum. But for some, the cost of credit is often far greater than it appears.
According to Harvard Law Professor Elizabeth Warren, the credit card companies are misleading consumers and making up their own rules. “These guys have figured out the best way to compete is to put a smiley face in your commercials, a low introductory rate, and hire a team of MBAs to lay traps in the fine print,” Warren tells FRONTLINE.
Warren and other critics say that a growing share of the industry’s revenues come from what they call deceptive tactics, such as “default” terms spelled out in the fine print of cardholder agreements — the terms and conditions of which can be changed at any time for any reason with 15 days’ notice.
Penalty fees and rates are sometimes triggered by just a single lapse — a payment that arrives a couple of days or even hours late, a charge that exceeds the credit line by a few dollars, or a loan from another creditor which renders the cardholder “overextended” as defined by the nation’s three all-powerful credit bureaus. This flurry of unexpected fees and rate hikes come just when consumers can least afford them.
“[Banks are] raising interest rates, adding new fees, making the due date for your payment a holiday or a Sunday on the hopes that maybe you’ll trip up and get a payment in late,” says Robert McKinley, founder and chairman of Cardweb.com and Ram Research, a payment card research firm. “It’s become a very anti-consumer marketplace.”
Banking Association spokesman Yingling defends industry practices. Because the credit card business is basically unsecured lending, he says, the risks associated with the business must be offset.
But that’s of little consolation to consumers who may be in trouble. According to the Better Business Bureau, credit card and banking companies are the subject of a record numbers of complaints. “It’s not an accident that the banking and credit card business generates more complaints nationally, across the country, than any other industry…Out of one thousand industries that we track, they are number one,” says Pat Wallace, head of the San Francisco Bay Area Better Business Bureau. “There are irritated, unhappy, dissatisfied customers in this industry.”
As Professor Warren sees it, the industry is operating without fear of penalty. “There’s no regulator, and there’s no customer who can bring this industry to heel,” Warren says.
Duration : 0:56:9
Two Loan Officers Tortured; Should Juveniles Receive Life in prison?
Torture charged in L.A.-area mortgage rescue case
http://www.reuters.com/article/GCA-Housing/idUSTRE59Q03Q20091027
Dow and gold hit the heights
http://www.ft.com/cms/s/0/0fcfc08c-ccfe-11de-a748-00144feabdc0.html
WHO: AIDS leading cause of death, disease in women
http://news.yahoo.com/s/ap/20091109/ap_on_he_me/un_un_women_s_health_2
Cuts, layoffs in Ketchikan budget
http://www.ktuu.com/Global/story.asp?S=11470178
High court looks at life in prison for juveniles
http://www.msnbc.msn.com/id/33789880/ns/politics-more_politics/
Check out my blog:
http://demcad.blogspot.com/2009/11/nobody-will-be-able-to-escape.html
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http://youtube.com/user/davincij15
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Duration : 0:5:4
Car Eliminating Debt with Bad Debts
The national debt is making highs it hasn’t seen in a long time. In fact, higher than we have ever seen. The amount of people whom owe to financial institutions like JP Morgan and Citi is very high. The amount owed to the credit card companies and any other company keeps going higher.
This is because we live in a system where we charge interest and this comes from no where but the increase of debt. Because the central bankers all over the world monopolize the money system, it is impossible to pay this debt back. If we were on a gold and/or silver standard then we could at least mine our own metals to pay interest expenses and charging interest could work.
It does not work with fiat dollars and in this video I go through what seems to be accounting basics that would eliminate debt. However, for this to happen we would need to see all the creditors of the world be nice to eliminate debt. This in turn would lower than equity and profits significantly.
Thank you for watching
Derek
Duration : 0:9:35
More infos at http://economycollapse.blogspot.comMarc Faber on the debt threat
more Marc Faber Interviews at http://www.MarcFaber.tk
also the blog http://marcfaberchannel.blogspot.com
Duration : 0:7:34
Peter Schiff Video Blog – Sovereign debt crisis and Greece defaulting 04 Feb 2010
more infos at http://www.peterschiffnews.com
Duration : 0:8:22
Sovereign Debt: The Next Crisis – Marc Faber
Posted Jan 13, 2010 01:00pm EST
After every financial crisis there’s a sovereign debt crisis, Marc Faber says. Countries that borrowed too much during the boom times start struggling to pay their competitors back, and eventually some of them default.
The countries most likely to blow up this time around are the “PIIGS”: Portugal, Ireland, Italy, Greece, and Spain. One ore more of them, Faber says, will likely default in the next couple of years. And, that could result in the death of the Euro currency.
Longer-term, Faber says, Japan and the US are in line for the same fate.
The US crisis won’t hit us this year or next year. But within 5-10 years, the United States will be forced to quietly default on its debt, most likely by printing money and destroying the value of the currency.
The main problem comes down to two things: 1) ballooning debts and 2) future interest costs.
As these charts from Faber’s Gloom, Boom, And Doom Report show, in the past decade, the U.S. government’s total debt and liabilities have gone through the roof, especially when Fannie, Freddie, Medicare, and Social Security are taken into account. This trend is unsustainable, and it will correct itself only through a rapid acceleration of economic growth and tax revenues, a new-found financial discipline, or a crisis–or a combination of all three.
The second problem is interest costs. Right now, the government’s debt and deficits aren’t creating an undue burden because the government can borrow so cheaply. Eventually, however, as the country’s financial situation gets weaker, interest rates will likely rise, and our interest costs will go through the roof.
According to Faber, our annual interest costs currently amount to 12% of the government’s tax revenue. Within five years, Faber estimates, these costs will soar to 35% of tax revenue. This will force the government to cut spending (unlikely) and/or frantically print money.
Duration : 0:3:48
Chase Credit Card Ripoff Scam (part 2)
In this second installment, I continue my discussion about how corrupt financial institutions like Chase Bank need to be boycotted.
I also recommend not using Visa and Mastercard checking cards, even when the money exists in your checking account. Even though this doesn’t incur interest on you, the merchant has to pay anywhere from 2-4 percent to that financial institution. Mom & pop stores are up to their eyeballs in this financial crap, and every time I go to a diner or low-cost store, I use cash or check, as well as reusable shopping bags.
But the main thing is to put a monkey wrench is this creepy financial system we have all become so accustomed to accepting.
Please make 2009 the year of paying down debt and saying “screw you” to these parasitic institutions. And if you must default on just one credit card, let it be your Chase Card. After all, they have no compassion on you, right? You’re just returning the favor.
Please feel free to leave your comments and do as much research as you can on this subject.
Duration : 0:10:0
Chase Credit Card Ripoff Scam (part 1)
In this video, I explain how corrupt of a financial institution Chase Bank is. This is not just my opinion, but the opinion of thousands of others that have filed complaints and class action lawsuits against this financial juggernaut.
I missed one payment. I had a super record with this company for eight solid years. One missed payment brought my minimum payment up three times. I went from an 8.45% interest rate to 29.99%. When I called the company to negotiate, all three parties refused to change anything. In the past, all other creditors behaved amicably; not this company though.
Boycott Chase at all costs, and tell your friends what their real plan is. They are preparing for the worst economic collapse in 2009, and by ridding themselves of customers, they limit their liabilities. After all, no job equals no way in to pay your minimum payments. I believe this is their plan.
Check out some of these links:
http://chase-bank.pissedconsumer.com/
http://www.consumeraffairs.com/finance/chase_bank.html
http://www.complaints.com/directory/2005/june/15/20.htm
Feel free to post your replies and any bad experience you’ve had with these parasitic predators!
Duration : 0:10:26
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