By most accounts, she seems to be kind of out there. But I can’t really blame her on this one. I realize that the banks and the credit car companies need to make their money, but not every way of doing so – even if legal – is ethically legitimate. Customers that make their payments on time and don’t overdraft should not be penalized because the banks made some bad loans to other people.


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6 Responses to HCW: Rock On, RockerChic

  1. Kirk says:

    Her speech would have been a little more effective if it hadn’t been for all the expensive knicknacks behind her. However, as a bank has got to be the easiest business in the world to start, I do think the big banks should have been allowed to fail.

  2. ? says:

    I can appreciate the cruel irony of imposing the highest credit costs on those people (the unemployed) who need the money the most. And I am tentatively in favor of reinstating the anti-usury laws of yore. But we should be clear-headed about what this would mean: consumer credit would largely dry up for everyone except the very rich. I embrace this effect because our credit-happy populace needs to have some Calvinist fiscal rectitude imposed on them, but I don’t think the woman in the video is quite aware of what she is asking for.

    Speaking of which . . . I don’t think her one-woman revolt is going to turn out well for her. The only way I know for her to escape the rapidly compounding interest on her debt is to declare bankruptcy. Unfortunately, the effect on her credit score will have all kinds of negative effects, since everyone from employers to insurers use the credit score as a proxy measure for general conscientiousness.

  3. trumwill says:

    Kirk,

    Eh, those are knick-knacks. If I saw a Lexus out the window, I might feel differently.

    Banks may be relatively easy to start on a small-scale, but banks that can loan out huge chunks of capital are somewhat harder to start. One of the best arguments as to why banks should not be allowed to fail whereas car companies should is that if someone wants to start a bank… where are they going to get the capital?

    That being said, letting banks get to the size that they are too big to fail does not seem to have worked out for us very well.

  4. trumwill says:

    Her revolt actually worked out very well. The bank caved, apparently. That was, of course, due more to the negative publicity than it was to her actions.

    I’ve thought about whether or not I would be willing to do what she did, but have determined that I am not. I don’t think that there’s anything morally wrong with it (she’s taking advantage of her rights in no way less than the bank is taking advantage of theirs), but I’m a weenie and have too much to lose. Of course, I am unlikely to get into credit card debt in the first place.

    As far as anti-usury laws go, it depends on which aspect you mean. I don’t have a problem with really high APRs and am unconvinced that it should be regulated. I do have a problem, though, with their willingness and ability to change the terms of the agreement at the drop of a hat and often due to no failure on the part of the borrower. That’s where I do think that the law should get involved. They should have the right to change interests rates, but there should be better processes and criteria for the consumer.

    Namely, the customer needs to be given more notice and their APR should change because of something they did financially that puts them at higher risk. Things like missed payments, the sudden accumulation of large amounts of debt, and things like that. Not because they started shopping at places where people with higher credit risks shop or because they bought a house in a neighborhood where people with higher credit risks live.

    Unless you slapped on some pretty serious anti-usury laws, I doubt that credit lines would become provinces of the rich. I think what you would see much more limited lines of credit given to people of more limited means. You’d see more cards with credit limits of $300 or $500 than we presently do. The large credit lines I was given just out of college would be a thing of the past. That would not be a bad thing.

  5. web says:

    Things like missed payments, the sudden accumulation of large amounts of debt, and things like that.

    Uhm, on the second, NO. if you were offered a credit line at a particular amount and interest rate, and you actually use that credit (especially due to something like catastrophic car failure, medical bills, etc) then they should not be allowed to jack your rate up.

    This actually has happened to a number of people I know – they have a “$XX,000” credit limit, they put medical bills on it, and then saw their rate raised (with only minimal notice) because “well your credit score went down due to your moving from X% of available debt to Y% available debt.”

  6. trumwill says:

    That’s where “notice” comes in. By “notice” I don’t just mean BIG LETTERS. Really, I mean a time period between the notice and the change taking effect. Well, time-delay and BIG LETTERS. But mostly time-delay.

    I agree that it’s unacceptable to give someone a $6,000 line of credit and then as soon as they use the first $2,000 to cut it to $3,000. At the same time, credit lines should not be completely impervious to someone’s changing financial situation.

    My compromise is that any rate changes have to occur with 6-months notice or something like that. Give people that suddenly have an influx of expenses time to get their house in order. At the end of six months (or nine months or a year), they can’t be charged for going over their original LOC, but they can’t use the card again until they’re below the new limit. The same would apply to APRs. The new APR could not take effect for a six month (9 month or one year… I’m flexible) period.

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