Given a Shovel, Americans Dig Deeper Into Debt »
Posted by: engineer 1 month, 2 weeks agoThis is a story of the debt crisis facing millions of Americans and the reasons for it
Read Full Story at nytimes.com
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engineer1 month, 2 weeks ago
To be sure, the increased availability of credit has contributed mightily to the American economy and has allowed consumers to make big-ticket purchases like homes, cars and college educations.
But behind the big increase in consumer debt is a major shift in the way lenders approach their business. In earlier years, actually being repaid by borrowers was crucial to lenders. Now, because so much consumer debt is packaged into securities and sold to investors, repayment of the loans takes on less importance to those lenders than the fees and charges generated when loans are made.
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engineer1 month, 2 weeks ago
Lenders have found new ways to squeeze more profit from borrowers. Though prevailing interest rates have fallen to the low single digits in recent years, for example, the rates that credit card issuers routinely charge even borrowers with good credit records have risen, to 19.1 percent last year from 17.7 percent in 2005 รข;; a difference that adds billions of dollars in interest charges annually to credit card bills.
Average late fees rose to $35 in 2007 from less than $13 in 1994, and fees charged when customers exceed their credit limits more than doubled to $26 a month from $11
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Beau78901 month, 2 weeks ago
Well, it's a good thing the Republicans--aided by Joe Biden and Hillary Clinton--rammed that bill through Congress that made it harder for Americans to file for bankruptcy.
Why, without that bill, those poor, hardworking predatory lenders might not be able to afford their third or fourth summer homes...
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MajJohn1 month, 2 weeks ago
I guess I find it hard to relate to someone who pays out $20,00.00 a year to finance her debt on a $47,000.00 income. She admits to being way over her head and that it's mostly her fault. She should stop there and not also try to place the blame on predatory banking practices. She is where she is solely because of her poor choices. Make me out to be a meanie but I don't want to bail her out. I'm sick of the government going into debt bailing out anyone.
A responsible person is not late in paying their bills, insures against unforeseen circumstances, and for those crazy enough to pay 19% interest, let them, not my problem.
I, like other consumers, have credit but pay between 5 to 9% for it and never pay late fees or over the limit fees. Am I lucky? No, just responsible.
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quackpot1 month, 2 weeks ago
We need law makers that set an example for personal responsibility, not ones who join in on the fleecing.
Mr. Paulson is more than happy to bail out Fannie May and Fredie Mac, the semi-private corporations designed to vige investor profit in good years and the tax-payers a load of bad paper in poor years.
Mr. Paulson is more than happy to provide hundreds of billions in exchange for nearly worthless wall street paper to bail out his wall street friends.
Mr. Paulson and the entire congress is happy to ignore the Banks' use of overly complex loan agreenemts that urry significant charges in the fine print.
Mr. Paulson is fine when two significant portions of the Bush economy depend on MASSIVE public debt and devaluation of the currency via MASSIVE printing of new money.
Mr. Paulson, Bush's secretary of the Treasury and ex-wall-street executive, certainly knows about fleecing.
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Beau78901 month, 2 weeks ago
MajJohn:
You blame the woman who has made poor choices. Granted, she has.
But let me ask you this--to put an end to drug use, would you go after the dealers or the users?
There are laws against usury. Some credit card offers contain small print saying that if you are late with a payment by a day, only once, your rate can go as high as 42% per year. If it's a card that figures interest using the odious "two-cycle method," that means a consumer could end up paying 84% interest because a mail carrier lost his payment. That's perfectly legal.
Do you really want to say the lender is not to blame for these outrageous terms?
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Justice4All1 month, 2 weeks ago
Wow, the preditors are even here as we read an article on preditory lending.
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nikkibabe1 month, 2 weeks ago
You are a nation a "whiners". John McCain, Phil Graham & "PIG" Joe are the right people to be elected to get you all out of debt.
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nostalgia1 month, 2 weeks ago
I'm sure many will certainly welcome this news given the state of personal finances in this country
Hike in federal gas tax floated
A federal commission created by Congress called for big increases to the federal gas tax on Tuesday as part of a sweeping overhaul of how America builds and pays for its highways, bridges and transit systems.
The proposal for a 40-cent increase over five years touched off a stormy debate in Washington that is expected to last until at least 2009, when legislation governing scores of transportation programs expires and must be rewritten.
http://www.dallasnews.com/sharedcontent/dws/new...
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Charlson1 month, 2 weeks ago
"But behind the big increase in consumer debt is a major shift in the way lenders approach their business. In earlier years, actually being repaid by borrowers was crucial to lenders. Now, because so much consumer debt is packaged into securities and sold to investors, repayment of the loans takes on less importance to those lenders than the fees and charges generated when loans are made."
I believe this change in lenders approach to lending (lenders lending someone else's money to unqualified borrowers to make money on fees and charges than on repayment of loans) was made possible by deregulation of our banking and mortgage policies and caused our mortgage debacle.
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Howtogo1 month, 2 weeks ago
More people in debt! Wow just think that maybe buying things you could not afford to have when you bought them has anything to do with it? The live good now attitude and worry about how to pay for it later is coming home to roost.
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Tcaros1 month, 2 weeks ago
Thanks to Bush Co. the US dollar is worth .7 Euro.
$1.00 = .7 Euro today.
They get a kick out of the few republicans that still are "too dumb to know" that they are bieng ripped off. Filling their tanks with $4.00 gas and talking about voting for McCain. What a bunch of idiots.
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Hi My background is Biomedical engineering with an MBA As you know from all my comments where I almost stand politically. I have loads of ...
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