Can we agree that people have to take responsibility for the debt they accumulate AND our governments should have rules in place limiting term changes and interest rates and factor service charges into interest rate caps?
But the kicker is that if this is done then credit will dry up to those that are not well qualified or those that need short term cash.
Let say we get our wonderful people responsive government cap interest rates at 20% and factor in service charges to the interest rates. This is a very reasonable sum and for standard credit cards and loans is plenty to ensure profit. So the total service charges and interest could never exceed 20%. Service charges are processing fees, balance transfer fees, late charges, prepayment fees, collections fees, legal fees. anything you would pay to someone loaning you money. Just keeping it simple we know government won’t but let’s just pretend they are capable of doing so.
The most they could charge for a $400 loan is .22 a day both interest and service fees. This would make it hardly worth it to provide payday loans and other short term incremental credit or loans to those likely to default.
In other words the less profitable something is the more limited it will be.
Another conclusion considering how abundant easy credit is would lead one to believe that it is extremely profitable.
The practice, called universal default, started after a rash of bankruptcy filings in the mid-to-late 1990’s and has increasingly become standard in the industry.
You’re welcome… I like coming here for the info, but sharing the good is also nice. I still look and use this new lappy with awe. I got some chat thing called Skype yesterday and yakked with the ‘angel’ who sent this, and he’s a geniuinely nice dude in Texas… (I could listen to that drawl all day). My fella and I spent about an hour yakking about Macs, Dogs and all with him.
Poor guy’s wife was t-boned yesterday outside of Houston, she’ll be OK, some broken bones, but is staying a couple of days in the hospital, so he needd to just chat and yak for a while. Man, I know he works in insurance, so at least they’ll be one up on the other person who ran the red and hit her (More towards the back passenger side, so her injuries weren’t “Severe”). Dang it. He says she’s a firecracker and will be ‘juuuust Fah-n’… AWWW!
I actually got Quicken and have been using it here on the new lappy. I think keeping a watch on my spending (Online pays and ATM/Checks etc) here instead of relying on what online sites say will be better . So this brings to mind a question: What software, if any, do folks use to track their financial activity?