Saturday, January 29, 2011

Junk debt usurers continue to leech off of cash-strapped people

CNNmoney reports on record interest rates.

"Revolving debt" is the polar opposite of a mortgage or other loan that goes away as you make payments. Credit cards and other instruments are designed to keep piling on debt and keep the borrower paying.

This is really vile in a time when unemployment is high, wages are stagnant and cost of living is going up. Oh, and when some of the companies doing this stuff received public money to stay in business.


Anonymous said...

Guess how much profit the US Government (which is the people, which includes you) are making off the money lent to the companies you complain about?

Pretty great return on the investment in these times.

TLF+ said...

Anonymous - thanks for that link.

I don't object to the existence of financial service companies. As I said in my post, a mortgage is just one example of an instrument that makes sense to the borrower on its face, where the disclosure page of the what's borrowed, the time it will take to repay and the amount it will cost the borrower are quite clear.

I am writing here about credit cards, which are bad news.

And I don't know that "I" profit just because the govt. is "making money" off the bailouts - a bloated govt. doesn't give me choice over how "my" money is being spent.

Likewise, revolving debt puts money in somebody's pocket but, really, it is money that the borrower would have spent in some other sector of the economy. The exorbitant amount paid (not repaid, as it becomes way more than what is fair repayment of cash advanced and sane interest) is money the borrower would have spent (but now can't) on the butcher, baker and candlestick maker.

Really, some of this is no better than the govt. claiming to "help the children" by "making money for schools" off of family-wrecking "industries" like casinos.

caheidelberger said...

I'm with you, Tim! It's time to rein in the predators. A little nanny-state action on interest rates would be good.

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