This didn't take long...
I bet the new offers were in the mail before the ink dried on the bankruptcy bill...
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Newly Bankrupt Raking In Piles of Credit Offers
By TIMOTHY EGAN
New York Times
Published: December 11, 2005
TACOMA, Wash., Dec. 9 - As one of more than two million Americans who rushed to a courthouse this year to file for bankruptcy before a tough new law took effect, Laura Fogle is glad for her chance at a fresh start. A nurse and single mother of two, she blames her use of credit cards after cancer surgery for falling into deep debt.
Ms. Fogle is broke, and may not seem to be the kind of person to whom banks would want to offer credit cards. But she said she had no sooner filed for bankruptcy, and sworn off plastic, than she was hit with a flurry of solicitations from major banks.
"Every day, I get at least two or three new credit card offers - Citibank, MasterCard, you name it - they want to give me a credit card, at pretty high interest rates," said Ms. Fogle, who is 41 and lives here. "I've got a stack of these things on my table. It's tempting, but I've sworn them off."
If it seems odd to Ms. Fogle that banks would want to lend money to the newly bankrupt, it is no mystery to the financial community, which charges some of the highest interest rates to these newly available customers.
Under the new law, which the banking industry spent more than $100 million lobbying for, they may be even more attractive because it makes it harder for them to escape new credit card debt and extends to eight years from six the time before which they could liquidate their debts through bankruptcy again...
..."The whole business model of the credit card industry is built around outstanding debt," said Ellen Schloemer, a researcher at the Center for Responsible Lending, a nonprofit group that tracks lower-middle-class financial issues, based in Durham, N.C. "This is the only industry that calls people deadbeats when they pay all their bills every month."
----------------
I learned this when I worked on a project for a credit card company about 8 years ago. At the time, since I had never paid my balance all the way down to zero, I was technically still paying for a pizza I ordered in college 7 years before that.
The worst thing about credit card debt is that you don't even realize how awful it is. It wasn't until Rachel and I finally paid off all of our credit card debt and our cars. At one time, we were paying something like $1,700 a month between our two cars and all of our credit cards. And we were just paying the minimum on the cards. That's money paid with post-tax dollars. We were essentially bleeding $20,000 a year. So when we finally got it all paid off, it was like getting a $29,000 raise to our annual salaries. All of a sudden we had money left over in our bank account at the end of the month. It was a huge struggle to get out from under, and we didn't realize how bad it was until we were out from under it.
It's nice to have credit when you need it. But it's tough sometimes to differentiate between need and want. And it's easy to run them up quick.
What's worse, to me, is how quickly they jack up your rates. That stupid Classmates.com web site charged my credit card $39 without my knowing. Apparently when you sing up once you somehow "authorize" them to renew each year. And since I never use my card, I didn't check my bill. And then I got a call. I was charged a late fee that was more than the original charge and my rate was instantly jacked up to 24% or so. I spent probably 9 hours trying to get Classmates to reverse the charge and complaining to Citibank.
The commercials make it sound so easy - a charge you didn't pay for? No problem sir, we'll take care of it. It ain't that easy. I finally did get the charge reversed and my rate lowered back to 12% or whatever. But I bet you it still shows up on my credit report as a "late" payment.
Big Energy, Big Pharma, Big Agriculture, Big Chemical, and Big Banks. I hate them all. They are wicked big, unassailable institutions.
I hate Big Energy. They pollute the Earth and people die because of their toxins. And they are responsible for violence against native people in 3rd world countries. But I heat my house and drive my car.
I hate Big Pharma. They advertise every imaginable illness and prescribe the cure. They claim that drugs are expensive because of the costs of research and development. But what about Vioxx? They falsified tests to pass FDA regulations and get approval to sell their drug. And people died because of it. So they lobby congress to protect themselves from "frivolous" lawsuits. But I take medicine when I'm sick. And Remicaid sure works like a miracle drug. But why does it cost $30,000 per infusion? Jake needs 9 infusions per year. That's the only reason Insurance companies aren't on my hate list.
I hate big agriculture - they too are ruining the Earth. And genetically modifying crops. But I eat food.
I hate Big Chemical. They pollute and have ruined the world's fresh water supply. Ever wonder why cancer has become so common in our generation? But I use cleaning products.
And I hate Big Banks. They charge unfair interest rates. I remember when ATMs came out and we were all encouraged to use them for free. Then they started charging for their use. And you can complain all you want, you aren't getting your money back. Pull $20 from an ATM at a convenience store. You'll get charged $1.50 from the ATM company and another $2.50 from you own bank. That's a 20% charge just to get your own money. It's sick. So I always pull the maximum available at the machine so it only works out to 2%. But it's still wicked. But there is just no way you can get by without a bank account, and in reality, you really need a credit card too. Try renting a car without one. Or flying.
And now I am dangerously close to going off on a Homeland Security rant - but it's late so I'll wrap this one up.
I think the problem with all of those industries that I hate is their size. They are too big. Too big. If they were smaller, and if there were more, smaller companies instead of fewer and fewer giant ones with subsidiaries, the free market might work. There would be competition and industries would police themselves out of self-interest.
My friend Gary is a rabid Libertarian and I think he thinks my progressive utopian ideal is impossible. I agree. But so is his Libertarian utopia. As individuals, all humans are good at heart - I believe that. Or at least there is some good in everyone. But put too many of them together and they somehow turn evil. This is why the Free Market will never work and we NEED government legislation to regulate and try to keep the playing field level. Unfortunately, our government has taken the side of big industry more and more - here's two recent examples:
- The prescription drug bill that makes it illegal for the government to negotiate bulk pricing from the drug companies.
- The bankruptcy bill that makes it harder for people to seek bankruptcy protection from creditors who target the recently bankrupt.
We need a government to protect us from large corporations. And if they don't protect us, it's time for a new government. Fortunately, in our country, we can vote them out instead of using violence.
-------------
Newly Bankrupt Raking In Piles of Credit Offers
By TIMOTHY EGAN
New York Times
Published: December 11, 2005
TACOMA, Wash., Dec. 9 - As one of more than two million Americans who rushed to a courthouse this year to file for bankruptcy before a tough new law took effect, Laura Fogle is glad for her chance at a fresh start. A nurse and single mother of two, she blames her use of credit cards after cancer surgery for falling into deep debt.
Ms. Fogle is broke, and may not seem to be the kind of person to whom banks would want to offer credit cards. But she said she had no sooner filed for bankruptcy, and sworn off plastic, than she was hit with a flurry of solicitations from major banks.
"Every day, I get at least two or three new credit card offers - Citibank, MasterCard, you name it - they want to give me a credit card, at pretty high interest rates," said Ms. Fogle, who is 41 and lives here. "I've got a stack of these things on my table. It's tempting, but I've sworn them off."
If it seems odd to Ms. Fogle that banks would want to lend money to the newly bankrupt, it is no mystery to the financial community, which charges some of the highest interest rates to these newly available customers.
Under the new law, which the banking industry spent more than $100 million lobbying for, they may be even more attractive because it makes it harder for them to escape new credit card debt and extends to eight years from six the time before which they could liquidate their debts through bankruptcy again...
..."The whole business model of the credit card industry is built around outstanding debt," said Ellen Schloemer, a researcher at the Center for Responsible Lending, a nonprofit group that tracks lower-middle-class financial issues, based in Durham, N.C. "This is the only industry that calls people deadbeats when they pay all their bills every month."
----------------
I learned this when I worked on a project for a credit card company about 8 years ago. At the time, since I had never paid my balance all the way down to zero, I was technically still paying for a pizza I ordered in college 7 years before that.
The worst thing about credit card debt is that you don't even realize how awful it is. It wasn't until Rachel and I finally paid off all of our credit card debt and our cars. At one time, we were paying something like $1,700 a month between our two cars and all of our credit cards. And we were just paying the minimum on the cards. That's money paid with post-tax dollars. We were essentially bleeding $20,000 a year. So when we finally got it all paid off, it was like getting a $29,000 raise to our annual salaries. All of a sudden we had money left over in our bank account at the end of the month. It was a huge struggle to get out from under, and we didn't realize how bad it was until we were out from under it.
It's nice to have credit when you need it. But it's tough sometimes to differentiate between need and want. And it's easy to run them up quick.
What's worse, to me, is how quickly they jack up your rates. That stupid Classmates.com web site charged my credit card $39 without my knowing. Apparently when you sing up once you somehow "authorize" them to renew each year. And since I never use my card, I didn't check my bill. And then I got a call. I was charged a late fee that was more than the original charge and my rate was instantly jacked up to 24% or so. I spent probably 9 hours trying to get Classmates to reverse the charge and complaining to Citibank.
The commercials make it sound so easy - a charge you didn't pay for? No problem sir, we'll take care of it. It ain't that easy. I finally did get the charge reversed and my rate lowered back to 12% or whatever. But I bet you it still shows up on my credit report as a "late" payment.
Big Energy, Big Pharma, Big Agriculture, Big Chemical, and Big Banks. I hate them all. They are wicked big, unassailable institutions.
I hate Big Energy. They pollute the Earth and people die because of their toxins. And they are responsible for violence against native people in 3rd world countries. But I heat my house and drive my car.
I hate Big Pharma. They advertise every imaginable illness and prescribe the cure. They claim that drugs are expensive because of the costs of research and development. But what about Vioxx? They falsified tests to pass FDA regulations and get approval to sell their drug. And people died because of it. So they lobby congress to protect themselves from "frivolous" lawsuits. But I take medicine when I'm sick. And Remicaid sure works like a miracle drug. But why does it cost $30,000 per infusion? Jake needs 9 infusions per year. That's the only reason Insurance companies aren't on my hate list.
I hate big agriculture - they too are ruining the Earth. And genetically modifying crops. But I eat food.
I hate Big Chemical. They pollute and have ruined the world's fresh water supply. Ever wonder why cancer has become so common in our generation? But I use cleaning products.
And I hate Big Banks. They charge unfair interest rates. I remember when ATMs came out and we were all encouraged to use them for free. Then they started charging for their use. And you can complain all you want, you aren't getting your money back. Pull $20 from an ATM at a convenience store. You'll get charged $1.50 from the ATM company and another $2.50 from you own bank. That's a 20% charge just to get your own money. It's sick. So I always pull the maximum available at the machine so it only works out to 2%. But it's still wicked. But there is just no way you can get by without a bank account, and in reality, you really need a credit card too. Try renting a car without one. Or flying.
And now I am dangerously close to going off on a Homeland Security rant - but it's late so I'll wrap this one up.
I think the problem with all of those industries that I hate is their size. They are too big. Too big. If they were smaller, and if there were more, smaller companies instead of fewer and fewer giant ones with subsidiaries, the free market might work. There would be competition and industries would police themselves out of self-interest.
My friend Gary is a rabid Libertarian and I think he thinks my progressive utopian ideal is impossible. I agree. But so is his Libertarian utopia. As individuals, all humans are good at heart - I believe that. Or at least there is some good in everyone. But put too many of them together and they somehow turn evil. This is why the Free Market will never work and we NEED government legislation to regulate and try to keep the playing field level. Unfortunately, our government has taken the side of big industry more and more - here's two recent examples:
- The prescription drug bill that makes it illegal for the government to negotiate bulk pricing from the drug companies.
- The bankruptcy bill that makes it harder for people to seek bankruptcy protection from creditors who target the recently bankrupt.
We need a government to protect us from large corporations. And if they don't protect us, it's time for a new government. Fortunately, in our country, we can vote them out instead of using violence.
posted by Eric Soderstrom at 12:35 AM
1 Comments:
I can't believe your post generated an automatic spam from a credit card company. Amazing and very big brother like.
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