economy
Portuguese families struggle to meet debt repayments
Portugal’s economy is strapped for cash – but so too are its citizens. With unemployment at a 30-year high, millions of families are struggling with debt, and an increasing number are defaulting on their loans. Duration: 02:13
Duration : 0:2:14
Economist likens U.S. debt default to “Doomsday”
Business and economics correspondent Rebecca Jarvis reports on the measures taken by the U.S. Treasury to prevent a debt default, which economists predict would be catastrophic.
Duration : 0:3:9
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
Al Hunt on U.S. Debt-Ceiling Debate, Eric Holder
May 13 (Bloomberg) — Al Hunt, executive editor at Bloomberg News, discusses negotiations between Republican and Democratic leaders over extending the U.S. government’s borrowing authority.
Hunt, speaking with Margaret Brennan on Bloomberg Television’s “InBusiness With Margaret Brennan,” also previews his interview with U.S. Attorney General Eric Holder, which airs this weekend on “Political Capital With Al Hunt.” (Source: Bloomberg)
Duration : 0:2:59
Missionaries of Debt: ‘We help them to help themselves’
Watch full episode 146 of Keiser Report on Thursday. This week Max Keiser and co-host, Stacy Herbert, report on collectivist top down tyranny running our monetary system. In the second half of the show, Max talks to Eric Sprott about precious metals, the ever increasing margin requirements and the ever decreasing dollar.
KR on FB: www.facebook.com/keiserreport
Duration : 0:1:48
RBS’s Cailloux Sees `Huge Uncertainty’ Around Greek Debt
May 11 (Bloomberg) — Jacques Cailloux, chief European economist at Royal Bank of Scotland Plc, discusses the response by European policy makers to the Greek debt crisis.
He talks with Mark Barton on Bloomberg Television’s “Countdown.”
Duration : 0:3:55
Jack Bogle on Risks From U.S. Government Debt
Vanguard Founder Jack Bogle on why investors should be cautious because America is facing a real crisis due to the government’s debt.
Duration : 0:3:23
U.S. student loan debt passes credit cards
With more students borrowing money for college, student loan debt in the U.S. is now greater than credit card debt. But, as Dean Reynolds reports, it’s still a smart investment.
Duration : 0:2:3
Diagnosis Negative: Severe case of debt, contagion risk high
Global markets are catching their breath after taking a big hit on Monday. That’s after Standard and Poor’s cut the U.S. economic outlook from stable to negative, over the country’s spiraling debt. RT’s Marina Portnaya has the story from New York.
RT on Facebook: http://www.facebook.com/RTnews
RT on Twitter: http://twitter.com/RT_com
Duration : 0:1:39
‘Average Joes’ Take on Soaring U.S. Debt
FBNs ‘Average Joes’ tackle the growing impact of the nations increasing debt problem.
Duration : 0:3:51
Search
Guaranteed Cash
Articles
- Credit Cards (392)
- Debt (404)
- Get Cash Now (484)
- Loans (419)
- Money (246)