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3/05/2010

America tightening the ropes on credit card robbery

The Fed is proposing to limit the excessive late fees imposed by credit card companies on their card holders. An example of the change is that 'a person cannot be made to pay more than the sum he is owing for late fees. So if one is owing $20, the card company cannot charge the bugger for $60 as late fee. Holycow, I thought this is only a decent thing to do. You mean they have been allowing such robbery to go on for so long and just work up to it? And there are several other commonsensical changes to limit the credit card companies from robbing their cardholders, like suka suka imposing higher interest rate, or the number of days that the payment was late before penalty can be imposed. But regulators complained that the Fed forget to lower the absurdly high interest rate of 2% monthly, which is quite similar to what loan sharks are charging. But I think the Fed's hands are tied. The bankers and credit card companies need the huge interest and profits to pay themselves billions in bonuses, and this must come from somewhere. Talking about robbers, I was robbed by a local bank of several hundred dollars in a dormant account which I had forgotten because of the $2 monthly fee charge for anything less than $1,500 left in the account. Some people are reviving this complain, that people's bank must also take care of the small people. But the message is that if you cannot have $1,500 in your account, please don't 'kar chow' the big banks. They got no time for small people. And since we are the admirers and blind followers of the American system and anything American is good, would the credit card changes in America be followed here?

8 comments:

Wally Buffet said...

I brought my maid to open a POSB account and she was told to deposit minimum $500 to do so. Previously, even my grandchildren could open an account with $1. What happened? The People's bank has become a part of a bank run by foreign talents that's why. In the end, I convinced her to "bank" with me and I will pay her double the interest that POSB gives. She is happy because she knows I am as solid as the People's bank but my rules and regulations are very flexible. No $2 charge, no minimun balance and can withdraw even 24/7 that's providing I am not sleeping or having my afternoon nap.

Hehe.

Wally Buffet said...

This thingy about the exorbitant charges levied by credit card companies on unpaid charges is to my mind quite fair because when you spend over your income limit and cannot pay, it's right you should be penalized with loan shark interest charges.If anything else, it reminds you not to do it again next time or be pained by the penalty.

Most financial problems faced by individuals are self inflicted because of poor spending habits, gambling addiction etc.

Chua Chin Leng aka redbean said...

Wally,

you running a govt or running a biz?

Matilah_Singapura said...

Can't blame lah. The banks are in be with the Fed.

REcently I spoke to a friend in the US -- formerly "successful" now in deep shit. HE, along with many of his friends and hundreds of thousands of others have outrightly REFUSED to pay their CCards. There is mass anger directed toward the banks -- who are collapsing but with "bonuses" paid to the head-crooks.

No wonder people are angry.

Anonymous said...

With the jobless rate at 10%, no wonder so many Americans are not paying their Credit Card debts.

This was supposed to be the third factor blowing up during the recent financial crisis, besides the mortgage defaults and toxic financial products weighing in on the banking system then. But, it seems that the credit card problem was not evident, until now.

If banks are collapsing because of non payment of credit card debts in America, it is not surprising. What is surprising is that they are still paying huge bonuses to the head crooks despite this. They must think the American public really stupid.

Chua Chin Leng aka redbean said...

Don't worry, the big crooks are heading to town and will be welcomed with open arms here, and with super pay as well.

Chua Chin Leng aka redbean said...

POSB has replied to say that they have been very kind.

Anonymous said...

I am spiritually consoled by having such a caring banker like POSB.

Their kindness by paying such low interest rates, after being taken over by DBS, is 'killing the old like me with too much kindness'

Anything lower and I think I will just keep my money under my pillow.