Source: Rebel Yell
It’s the home stretch for seniors, halfway through their last semester. Job searches, grueling interviews and fancy resumes have placed the goal of actually making money in the forefront, but the threat of paying back student loans awaits.

College tuition is rising far faster than inflation. On average, students at a public university will accumulate student loan debt of approximately $19,000. In Nevada, the estimate is about $16,700 on average. Compounded with payments on the loan, students will also be facing an all-time high interest rate of 6.8 percent. If your debt is close to these numbers, expect to pay around $400 a month for the next seven years.

It makes sense: You have to spend money to make money. But what about saving for that rainy day, your dream home or a wedding? You go into further debt. The bills add up. Let us count the ways: credit cards, car payments, car insurance, rent/mortgage, utilities, student loans, food, health/dental insurance and traffic tickets. Even if one manages to skim over a couple of these, the point is, living in America is not cheap.

Interest rates have been rising for a while. Tuition has increased faster than the low-paying jobs that students usually maintain. A student who has $20,000 in debt, with payments for 30 years, can expect to pay $27,000 when you include interest. Going to college is big business. Many students think their debt will disappear once they graduate. This is true if they find a limited teaching or nursing job that qualifies for federal loan forgiveness. however, the odds of either happening are slim. Instead, we are pushed into the work force.

Source: Aberdeen News
“If you would be wealthy, think of saving as well as of getting.” A mind-set such as this is rather difficult to find. Saving money seems to be either on the back burner or nearly impossible for many Americans today. In the eighteenth century, the enlightened thinker and early American, Benjamin Franklin knew the problems that debt brought on.

More American households are in debt today than at any point in the past 15 years. In fact, debt is rising faster than income. This is especially true in middle-class households. There seem to be two major components to the debt crisis in America: people spending money on things they do not need and cannot afford, and banks and other sources encouraging us to do so.

Franklin also said, “Pride is as loud a beggar as want, and a great deal more saucy.” Today there are many items that could drive a person into debt. Take a look around you. There are many new electronic devices, fashions, toys, cars, etc. The list could stretch out for miles, which would probably not come as a shock to many people. It seems as if we live in a world where “keeping up with the Joneses” is not a simple saying, but a way of life.

Source: Mortgage Solutions
The discovery that one in 20 teenagers does not believe that money borrowed on a credit card needs to be repaid must have made debt counsellors’ hearts sink, while also reassuring educationalists that the introduction of lessons in finance into the school curriculum has not arrived a day too soon. A survey, published in February by the charity Personal Finance Education Group (PFEG), of 1,000 teenagers aged 14 to 18, found that by the time they were 17, more than half of those surveyed had already been in debt and 90% worried about their money.

Source: Cardguide UK
Over recent weeks a number of credit card companies and issuers have been announcing that they will be charging fees to customers that hold credit cards but do not use them.

Card issuers have argued that these customers are actually costing them money because they have to pay administrative costs for issuing statements and administrating accounts, but they are not actually making them any money because they are hardly ever using their credit cards. However, some think that the fees that are being applied to the inactive or rarely used accounts of many credit card holders are just another way for card companies and banks to try and recoup losses that resulted from the ceiling limit that was placed on credit card penalty fees by UK financial regulators last year.

Source: Alternet
America is very wealthy country, but one has to wonder how much of our wealth is in fact a chimera, spun of a consumerist ideal and given the appearance of solidity by a flood of easy credit? How much poverty and real economic pain is covered up by an endless succession of pay-day loans and EZ-finance rip-offs that eventually just bury people under mountains of debt from which they have little chance of digging themselves out.

Today’s bankruptcy rate is ten times what it was during the Great Depression, foreclosures are at a 37-year high and the United States has a negative savings rate, yet we’re told every day that the economy is going gangbusters. George W. Bush often points out that more Americans own their own homes today than ever before. He doesn’t mention that they also have less equity in those homes than ever before. Every day brings news of the potential scope of the emerging “sub-prime” loan scandal — what Robert Kuttner called “deregulation’s latest gift” — and new indicators that the housing market that’s driven so much of the economy for the past five years is a bubble that’s begun to burst right before our eyes. Compounding our personal debt problems are our representatives, equally profligate spenders who are just as happy to run up enormous budget deficits and who reflexively guarantee and subsidize trillions of dollars of new loans to already strapped American businesses and consumers.

It’s a pretty good time to ask ourselves just how we got here.

Source: Courant.com
The credit card industry is bilking millions of Americans. Since 1990, credit card debt has more than tripled, fueled largely by aggressive and reckless lending by card issuers. Today, Americans owe roughly $800 billion in credit card debt. Nearly 60 percent of cardholders carry a balance regularly. Seventy percent of credit card industry profit comes from interest and late payment fees. In fact, in 2005, banks collected almost $8 billion from penalty fees. [more]

Source: Nevada Thunder
In addition to borrowing from the world’s poorest countries, Bush & Co. are secretly confiscating your hard-earned dollars to support their out-of-control spending habits. In short America has been living beyond its means for too long and the reckoning is looming. The consequences of delaying action to address the root causes of the problems are serious and long-lasting. The time for action is now. For further information on how to get involved visit: http://www.time-bomb.org/

Source: China Daily
“Enjoy today’s happiness using tomorrow’s money” is a slogan that has been deeply rooted in the heart of many young credit card holders. However, a recent survey found that some of them are worried about becoming card slaves, a term used to refer to people pay only the minimum amount against their credit card debt every month.

Conducted by China Youth Daily and www.sina.com, the survey collected roughly 1,800 ballots and found that 23.7 percent of them were worried about becoming slaves, borrowing money from one card company just to pay off the debt on another and always living on the edge of bankruptcy.

Following relentless promotions by banks in recent years, credit cards are now popular in several large cities in China. Holders have an average of more than two cards. The survey found that 35.8 percent of people have one credit card, 34.8 percent have two or three, and 20 percent have more than three. Although about 85 percent of people said they pay off their credit card debt every month, roughly 12 percent of people said they pay only the minimum balance, the survey found. Young people have become the mainstream of credit consumption. A credit card website - www.51credit.com - has more than 300,000 registered members, including many undergraduates and middle school students. The members’ average age is just 26.

“When paying for things with my credit cards I never think about how much I earn each month, only what is left of my credit line. My monthly salary often fails to cover my debts. Credit cards stimulate consumption, and help me to enjoy my life now and worry about my debts later. I bought my computer, mobile phone, iPod and other expensive items using my credit cards.” (Xia Xiaoxue, 24, an office employee).

Comment: So an increasing number of the Chinese population are falling into the same trap that many Americans have fallen into… and can’t get out of anymore. Debt for life. Slavery to the banking system to repay debts a dozen times over.

Source: Stuff
Nelson has had one of the highest increases in bankruptcies in the country, prompting a Nelson budget adviser to warn money lenders and spenders to be become more responsible.

Finsec, the bank workers’ union, is also calling on banks to change their pay systems so that bank workers are not encouraged to sell credit card debt to customers. Nelson has had the third largest leap in the number of bankruptcies between 2003 and 2006, up 55.1 percent from 49 to 76. It follows Dunedin, up 62.5 percent from 88 to 143 bankruptcies, and Napier, with a 60.9 percent rise from 87 to 140 bankruptcies. Bankruptcies in New Zealand have hit an eight-year high, with 2380 people declared bankrupt in the first eight months of this financial year, a 22 percent rise on the same period last year, the Sunday Star-Times reported on Sunday. The main causes of people going bankrupt were unemployment, overusing credit, bad health, relationship breakdown and lack of health insurance. [more]

Source: El Paso Times
Easy credit, predatory lending, trapped borrowers. As Americans rack up ever more debt, the winners are the big banks and real estate millionaires, and the losers are — increasingly — everyone else. So says filmmaker James Scurlock, whose new documentary “Maxed Out” casts a gimlet eye on our nation’s debt-laden way of life.

The evidence he presents is compelling. Americans owe more than $2.4 trillion in consumer debt, according to the U.S. Federal Reserve. Our savings rate has fallen below zero. Scurlock accuses the financial industry of issuing far more credit than people will ever be able to pay back, ensuring it will collect interest payments into eternity.

Source: Telegraph
The Government is to remove all barriers to banks sharing data on us in a bid to curb irresponsible lending. But the potential for error is huge, writes Teresa Hunter

The Government is poised to remove all privacy to our financial arrangements by allowing banks and other institutions to reveal full details of our accounts to each other and credit reference agencies, even though we may not have given permission for this data to be shared.

The move is likely to prove controversial as credit reference agencies can be prone to errors. Citizens Advice confirmed that the bureaux regularly deal with clients who have been refused credit because of problems with their files. Moira Haynes of Citizens Advice says: “There can be things on files which customers do not agree with, or imply financial associations with other people which do not exist. We do what we can to help them get the mistakes corrected.” [more]

Source: Scotsman News
It was introduced to help tackle credit card fraud, but now chip-and-PIN technology has been blamed for fuelling the ongoing rise in consumer debt. The claim was made by the online consumer advice service uSwitch.com, which said that the popularity of the new system has made it easier for people to get cashback on credit card purchases at the till and overspend.

Chip and PIN was introduced in February 2006 as a replacement for the old-style signature strip system, which was considered to be an easy target for potential fraudsters. Since its introduction, it has been credited with cutting down on fraud, but a report produced by uSwitch.com suggests this has not come without a cost to consumers. The service said the introduction of the new technology had led to a “dramatic increase” in credit card debt, and added that up to one million people believe that charges on credit card cash withdrawals are free, as they are on debit cards. This is not the case. [more]

Source: Sunday Star Times (NZ)
Bankruptcies have reached an eight-year high and experts are warning people to reduce their personal debt. In the first eight months of this financial year, 2380 people have become bankrupt, a 22% rise on the same period last year. Until this year, bankruptcies have been rising by only a few percentage points each year.

The five main causes of people going broke are job loss, excessive use of credit, relationship breakdown, ill health and a lack of health insurance and decisions to stand as guarantor for someone else’s loan or business venture. Business commentator Rod Oram said people had been pushing their luck for a long time and warned bankruptcy rates would accelerate should there be a severe recession and unemployment. “It’s time to start reducing debt now.”

Household debt levels had rocketed, in part because banks and other lenders were pushing the boundaries of lending, including offers of 100% mortgages. Consumers were also enjoying competitive credit card rates and finance firms had eased their lending criteria. “I think it will come back to haunt them,” said Oram. People were less paranoid about debt and there were many who owed more than the value of all their assets, he said.

Source: Easier Finance
From this weekend people will have a new home for their money as credit unions launch current accounts. Credit unions are financial co-operatives set up to give access to financial services to their members. Over the last 25 years the sector has seen massive growth and the introduction of current accounts is a major step forward in the development of credit unions in the UK.

Even today many people in the UK do not have current accounts. This is for a number of reasons, but the Government has identified that individuals without current accounts are generally at a disadvantage in society. Some people are unable to provide the utility bills or passports that banks require to open current accounts. Others may be concerned about opaque pricing strategies by the High Street banks. Whatever the reasons, the new credit union current account is designed to provide access to current account services to many more people.

Source: Cardguide UK
For the first time the number of people in the UK seeking insolvency in 2006 broke the 100,000 barrier, illustrating the high consumer debt level problems that have emerged, with nearly one and a half trillion pounds worth of consumer debt in total. Banks have taken the hit pretty hard, with many major banks complaining about the high levels of bad debt that they have been left with as a result of consumers seeking protection through bankruptcies and IVAs because they cannot afford to keep up with repayments on financial commitments such as loans and credit cards. And it seems that some major banks are now intending to take a stance against these bad debts. One of the UK’s major banks, Barclays, is planning to revamp its credit card services to focus on mainstream borrowers, and it is looking to do this through getting rid of its sub-prime credit card division according to recent reports. [more]

Source: AZ Central/WSJ
Debit-card use is soaring, but a series of recent scams highlights the growing risk of fraud to consumers who use the method of payment. Thieves are always inventing new ways to steal consumers’ account information, whether they use debit or credit cards. But debit cards typically put consumers at greater financial risk because they offer less legal protection than credit cards in the event of loss. And because debit cards access funds directly from your bank account, the money is missing while you sort out any theft, which could mean bounced checks, late fees and other problems. [more]

Source: Washington Post
The Washington Post received this question; “I have an annuity worth $10,000 from a lawsuit many years ago. I currently have about $15,000 in student debt. I’m planning on attending graduate school in a few years and was wondering if I should use that annuity to pay off my student debt or keep it and use it for graduate school costs. I think the biggest issue is probably how either choice affects student aid: do they count student debt in your favor, and do they count an annuity against you?“

Read the answer and advice here.

Source: USA Today
USA TODAY states that the lenders who “are so incompetent that they extend credit to people who can’t handle it deserve some of the blame and some of the bill” (“When interest rates hit 32%, there ought to be a law,” Our view, Credit practices debate, Friday). The lenders aren’t the incompetent ones; the card holders are. Credit card companies are a type of business. Their goal is to make money. There are rules that go with the use of a card: Break the rules, pay the penalty.

Source: Daily Gotham
One of the more alarming developments of life for ordinary people during the years of Bush Jr. has been the explosive growth of consumer debt. As it turns out, the reason for the vast increase in such debt because you and I buy too much. In fact, explained Harvard Law Professor Elizabeth Warner, the big factor in debt increase over the years has been the stagnation and decline in real wages together with vast increases in the core costs of housing, medical care, child care and transportation. [more]

Source: ABC News
Another expert with a passionate opinion is Elizabeth Warren, a professor at Harvard Law School who teaches contract law, bankruptcy and commercial law.

“The ideal customer is the one who is in serious financial trouble: stumbling, making a payment, missing a payment but making another payment, staying just barely on their feet, making three payments in a row, catching up a little, falling behind a little and staying in this sweatbox for years and years and years,” she said. [more]

Source: Pahrump Valley Times
According to Scurlock, incomes have risen about 1 percent in “real terms” in the past generation, while household debt increased over 1,000 percent. Scurlock cites the Federal Reserve in saying that 12 percent of young families were more than two months behind on their debts in 2004. With new bankruptcy laws, that figure has undoubtedly gone up. Scurlock interviewed people in the industry and, to his shock, found that credit card companies and big banks encourage debt-to-the-extreme.

Fees and “extras” such as unneeded insurance are the ways that banks make their money. For instance, although Scurlock says they take little to no time to process, there’s a reason that “bounced checks” come with a $25 or higher bank fee.

Source: HLS
“Maxed Out,” a new documentary examining the proliferation of debt in America, was shown at an advanced screening in Ames Courtroom. Filmmaker James Scurlock and Professor Elizabeth Warren, a leading bankruptcy expert who appears in the documentary, were on hand after the film for a panel discussion.

“Credit cards are transforming middle class America, and James Scurlock is determined to tell the story,” says Warren. “Maxed Out pieces together clips and interviews to tell a tale that startles, and eventually outrages, the viewer. The film is a reminder that one person with an idea, a camera, a few friends and a lot of perseverance can help change a national conversation.”

In the film, Scurlock interviews debt collectors, pawnbrokers, people in debt, and experts like Warren to show how the credit industry unfairly targets consumers, wreaking havoc upon the lives of Americans.

“We’re all led to believe that people get into financial trouble because they are irresponsible, but I’ve learned that most people are getting in trouble because the banks and credit card companies are setting their customers up to fail,” said Scurlock. “The more credit they give us, the more credit we need. When we inevitably fall behind, they can charge the huge late fees and the over-limit fees and the stratospheric interest rates that drive their profits.”

To solve the debt problem, Scurlock calls on the government to pass tougher regulation on the credit industry as well as the industry itself to change its practices. Instead of targeting the least responsible consumers, Scurlock argues, lenders should take income into account when offering credit to consumers. Scurlock is also the author of the book “Maxed Out: Hard Times, Easy Credit, and the Era of Predatory Lenders,” which is a companion to the documentary. Warren has written several books and articles exposing the credit industry, including “All Your Worth: the Lifetime Money Plan” and “The Two-Income Trap: Why Middle-Class Fathers and Mothers are Going Broke.” The screening is sponsored by the Consumer Law Unit of the Hale and Dorr Legal Services Center.

Click here to view a trailer of the “Maxed Out” documentary.

Source: USA Today
An Ohio man whose $3,200 credit card debt mushroomed to $10,700 with interest and fees told his story Wednesday to senators who denounced the industry for confusing billing practices and shifting interest rates.

Executives of three major banks defended their credit card practices as responsible and responsive to consumers’ needs in testimony at the hearing of the Senate Homeland Security and Governmental Affairs’ investigative subcommittee. Those from Citigroup Inc. and Chase Bank USA said their companies were eliminating some practices — including the one that hit Wesley Wannemacher of Lima, Ohio, with over-limit fees on his Chase card account 47 times although he went over his credit limit only three times.

The interest charges and fees on Wannemacher’s account more than tripled his debt despite his having made payments averaging $1,000 a year over six years, noted Sen. Carl Levin, D-Mich., the subcommittee’s chairman.

“Unfair? Clearly, I think,” Levin said. He said an investigation by the panel found that “sky-high interest charges and fees are not uncommon in the credit card industry. While the Wannemacher account happened to be at Chase, penalty interest rates and fees are also employed by Bank of America, Citigroup and other major credit card issuers.”

Source: AJC
Ten thousand dollars in credit card debt sneaked up on Randy Arroyave like a ninja in the night. When he got his first card, he would only use it for big-ticket items, like a $300 leather coat or trips home to Latin America. Then he would pay it off, diligently but slowly. “I was very careful and very apprehensive to use it,” recalled Arroyave, 30.

But he relaxed his credit card code when he quit working to attend Hunter College of the City University of New York, using it for meals, entertainment and small things. It wasn’t long before he had two cards — and mounting debt. And still, the tempting offers for new cards arrived daily in the mail. “I didn’t check for the interest rates,” he said. “I chose the first one in the mail that looked pretty.”

Like Arroyave, millions receive a dizzying array of credit offers. Banks promise everything: low introductory or annual interest rates, rewards programs, and cards that come in gold and platinum. Making sense of it all can stump even the most financially savvy. But a little knowledge can go a long way. “Know how much you spend,” said Curtis Arnold, founder of CardRatings.com. “And know your lifestyle.”

First, you need to decide how you’ll be using your card, Arnold said. If you plan to carry a balance, then the annual percentage rate is going to be the most important piece of information. The APR is the amount of interest you’ll pay on any balances you carry. The lower the rate, the better. Just a few percentage points can make a huge difference, saving hundreds of dollars and cutting the length of time it takes to pay off your debt. Also, beware of introductory offers. Some cards promise rates as low as 0 percent interest on balance transfers, but if you miss one payment, the rate can jump as high as 30 percent.

Many of these deals can also come with hidden fees attached. “They’ll talk about the 0 percent rate [on balance transfers], but generally they won’t advertise they’re hitting you with a $300 fee,” said Arnold. And remember — be honest with yourself about your ability to pay off your balance before your introductory rates expire. “Everyone has good intentions, but life happens,” said Arnold.

Reward cards may seem tempting, but their higher interest rates nullify any benefits if you carry a balance. But if you can afford to pay off your balance each month, a reward card may offer the best deal. Now all you have to do is sort through the offers and choose the right one. “It’s not one size fits all,” said Monica Beaupre of American Express. But a 2004 law sponsored by Sen. Chuck Schumer (D-N.Y.) made it easier. It requires all solicitations to include a table of information, called the Schumer Box, which contains most of the information you’ll need. Web sites like CardRatings.com, which ranks hundred of credit cards, can also make comparison shopping easier.

Which is exactly what Arroyave did. When he graduated from Hunter and started working as a biology lab technician, he set out to rid himself of his credit card debt. His goal: freedom in six months.

Source: MSNBC
Major lenders to testify at hearing about ‘abusive’ practices.

A Senate panel is examining complex billing and interest-rate practices for credit cards that critics say confuse consumers and can push them deeper into debt. Sen. Carl Levin, D-Mich., chairman of the Senate Homeland Security and Government Affairs subcommittee, said an investigation by his panel found “abusive” and confusing practices by credit card companies that can increase financial pain for many families.

“The penalties are repeated and they keep you in debt,” Levin told reporters in advance of a hearing Wednesday at which major credit card issuers were expected to testify.

Source: David Bach
Of all the games the credit card companies play that end up costing you thousands of dollars (late fees, over-limit fees, transfer fees, and so on), it’s always been the interest rate game that hurt the most — until now. There’s a new, completely legal game they’re playing, and it can literally wipe you out financially if you’re not careful. Read the full article to learn about The Universal Default Clause, The Late Payment ‘Trigger’, and Other Triggers to Worry About.

Source: BBC News
More credit card companies have been quietly raising a variety of charges to restore their profitability, says the information service Moneyfacts.

Its latest survey shows that six card companies have made big changes to their charges in the past two weeks. Offers to transfer a card balance free of charge have almost all disappeared. Moneyfacts says banks are responding to last year’s ruling by the Office of Fair Trading (OFT) that credit card default fees should be cut to just £12.

“Battling with rising bad debts and a huge loss in revenue from the capping of default fees, credit card providers have been forced to look for other ways to maintain their income stream,” said Michelle Slade of Moneyfacts. “Changes range from interest rate increases, by as much as 10% (on cash transactions), to shortening of interest-free deals,” she added.

Balance transfers: The six major credit card firms highlighted by Moneyfacts for the recent introduction of higher charges are the Co-operative Bank, GE Money, Marks & Spencer, the Nationwide and Northern Rock. But Moneyfacts accuses Lloyds TSB of being particularly sneaky. “Cash withdrawal fees and foreign usage charges are rising, but perhaps the sneakiest of all is the requirement to make purchases as part of a 0% balance transfer deal,” said Michelle Slade.

Moneyfacts says Lloyds TSB is negating the apparent advantage of its 0% nine-month deal for balance transfers, by insisting that customers make a purchase of at least £100 with their new card within the first three months. That purchase will attract an interest charge of either 15.9% or 17.9% and will not be paid off at all until the cheaper, transferred, debt has been paid off in full. However, in response, Lloyds TSB said that the full terms of the 0% deal was “very clearly communicated in customer literature.” In addition, the bank said that the £100 purchase that customers had to make to obtain the 0% deal was itself subject to an initial three-month interest free period.

OFT: All this has been part of a growing trend. In the aftermath of the OFT’s ruling that credit card default fees should be slashed to just £12, many credit card companies raised their basic interest rates. Since then, the banking group HBOS has revealed that it would lose £60m in income this coming year as a result of the OFT’s ruling. Other charges were introduced as well. Last month, Lloyds TSB announced it would charge customers £35 a year if they did not use their credit cards enough.

And in January, HSBC said it would charge much higher interest rates when customers used their credit cards for gambling. Meanwhile, 0% deals for balance transfers, which gave birth to a breed of people called “rate tarts”, now almost all come with a transfer fee attached, typically of 3%. Only the Britannia building society does not charge such a fee.

Source: JEANNINE AVERSA, AP Economics Writer
Late mortgage payments shot up to a 3 1/2-year high in the final quarter of last year and new foreclosures surged to record levels as borrowers with tarnished credit histories had trouble keeping up with monthly payments.

The Mortgage Bankers Association, in its quarterly snapshot of the mortgage market released Tuesday, reported the percentage of payments that were 30 or more days past due for all loans tracked jumped to 4.95 percent in the October-to-December quarter.

Source: Home and Family Bills
Let’s face it folks – the average American is a compulsive spender, and here are the statistics to prove it. The American Consumer Satisfaction Index (ACSI) in May this year predicted that consumer spending was likely to increase, even as the growth of wages and salaries continued to slow down and the national savings rate went into the red. While increased consumer spending may be good for the national economy, it’s definitely not so for the bank balance of the average family, more so when you spend $12 for every $10 that you earn. It’s high time the purse strings were tightened, and we all started focusing on saving.

It turns out that the simplest ways to cut costs are the most practical ones – the lessons you learned from Mom, but somehow forgot all about as you grew up. Well, it’s not too late to jog your memory, dust those mental cobwebs, and get your financial act together with these easy cost-cutting tips.

Source: Chicago Tribune
When you watch Janne O’Donnell and Trisha Johnson talk, you almost vow on the spot to never use a credit card again. Each is a mom who had a college-age child commit suicide while loaded with credit-card debt. They are among many people interviewed in a new film documentary, “Maxed Out,” which explores the U.S. consumer’s addiction to debt and unapologetically blames the industry as making it nearly impossible for people to ever get clean.

“Maxed Out” debuted in select cities Friday and will open in Chicago on March 16.

Source: Consumer Affairs
After years of docilely taking orders from banking interests, Congress is at least trying to assert a bit of independence, as evidenced by recent Congressional hearings that have spotlighted the abusive, predatory and usurious practices that have come to characterize the credit card industry. Check out this lengthy article that goes into issues such as; Universal Default, Trailing Interest, Penalty Fees, Complex Statements, Hidden Costs, and passing the buck on Identity Theft.

The article concludes with something we fully agree on; Consumers need to know a lot more about how to manage their personal finances. More schools should offer classes devoted specifically to teaching students how investing works, how debt can be accrued, and how credit is not a blank check.

Source: USA Today
Sandra Block has written an article on debt and credit cards that is worth reading. She starts by writing that, “If you want to get a group of people riled up, ask them how they feel about their credit card issuer. But send the children out of the room first, because you’re likely to hear language that’s inappropriate for tender ears.”

It is clear that Sandra has a good understanding of credit cards in our society when she writes, “Americans use credit cards to pay for everything from groceries to speeding tickets. But they’re increasingly besieged by colossal fees and interest-rate increases that seem to hit them without warning or justification.”

Read more on unpopular credit card and bank practices such as Universal Default and Double Billing.

Source: Scrippsnews
This question was presented to a debt adviser:
My friend has several credit-card accounts totaling more than $35,000 in debt. My friend has a steady, well-paying job. But the debt-to-income ratio is too high for the banks, so a personal loan could not be approved and tapping into home equity is out of the question. I have considered using my home-equity line of credit to help, but am very concerned about putting myself into that situation. It’s a close friend, but someone whom I have known only for a couple of years.

Please read Steve Bucci’s excellent advice on this situation.

Source: London Independent
Paying for goods with notes and coins could be consigned to history within five years, according to the chief executive of Visa Europe.

Peter Ayliffe said that, by 2012, using credit and debit cards should be cheaper and more convenient than cash. Some retailers could soon start surcharging customers if they choose to buy products with cash, because of the greater cost of processing these payments, he warned. Visa Europe briefed the British Retail Consortium last month on new “contactless” cards that can be waved in front of a scanner to make small payments. However, the consortium dismissed this vision and claimed that card processing fees, which regulators are investigating, are still too high. One member of the consurtium said that the estimated “interchange” fee charged to retailers amounts to some 4p for each transaction. Nick Mourant, treasurer at Tesco, said: “There is a duopoly between Mastercard and Visa in the UK. Their setting of fees is anti-competitive.”

Comment: When is the last time you TRUSTED a BANK to tell you that their new services and offerings were going to SAVE money and BE cheaper? They only do this so you no longer have a choice and THEN they raise the cost in gradual steps, just like they have done every time with new services you’re supposed to be excited about. Of course, it is also easier for banks to track your activities, whereabouts, and payments.

Source: New York Times
On March 1, a Wall Street analyst at Bear Stearns wrote an upbeat report on a company that specializes in making mortgages to cash-poor homebuyers. The company, New Century Financial, had already disclosed that a growing number of borrowers were defaulting, and its stock, at around $15, had lost half its value in three weeks.

Now, as then, Wall Street firms and entrepreneurs made fortunes issuing questionable securities, in this case pools of home loans taken out by risky borrowers. Now, as then, bullish stock and credit analysts for some of those same Wall Street firms, which profited in the underwriting and rating of those investments, lulled investors with upbeat pronouncements even as loan defaults ballooned. Now, as then, regulators stood by as the mania churned, fed by lax standards and anything-goes lending.

Already, more than two dozen mortgage lenders have failed or closed their doors, and shares of big companies in the mortgage industry have declined significantly. Delinquencies on loans made to less creditworthy borrowers — known as subprime mortgages — recently reached 12.6 percent. Some banks have reported rising problems among borrowers that were deemed more creditworthy as well.

Source: MCA
U.S. Rep. Marsha Blackburn, R-Tenn., introduced legislation Monday that would prevent illegal immigrants from receiving credit cards from American financial institutions.

The Photo Identification Security Act would require banks to use what Blackburn calls “secure forms of identification” to obtain credit. In a statement put out by her office, she says that Bank of America “has come under fire in response to reports that it allows illegal immigrants access to credit cards without proper documentation.” Bank of America spokesmen maintain that they follow the letter of the law in permitting customers to use the forms of identification permissible under the U.S.A. Patriot Act. That includes matricula consular cards issued by the Mexican government.

“The American people deserve to know that the integrity and security of our financial institutions will remain intact,” Blackburn said in a statement Monday. “This bill closes a critical loophole that banking institutions have used to circumvent the letter of the law they have used to target illegal aliens as a new source of revenue. It says to banks and illegal immigrants alike, ‘You can’t get a Visa, without a visa.’” Bank of America issues the secured, or collateralized, credit cards only after a customer has established a deposit account, and to get a deposit account, the company requires a Social Security number, proof of U.S. government federal taxpayer status, or other documents listed as identification by the Patriot Act.
Don’t forget: the more credit banks give out, the more dollars are printed, the more dollars are borrowed, the higher the tax pressure will be for citizens.