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Wed Dec 30, 2020, 02:24 PM

Would it be good idea for those who are in credit card debt because of

the pandemic - at no fault of their own, be granted a much lower bank interest rate, say for 2 or 3 years. We know the virus will be with us for a year, and probably longer, this would ease some of the burden that many will be facing for a long period of time.

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Reply Would it be good idea for those who are in credit card debt because of (Original post)
42bambi Dec 2020 OP
BainsBane Dec 2020 #1
Massacure Dec 2020 #4
BainsBane Dec 2020 #5
soothsayer Dec 2020 #6
Massacure Dec 2020 #8
Clash City Rocker Dec 2020 #2
Wellstone ruled Dec 2020 #3
Deuxcents Dec 2020 #9
Wellstone ruled Dec 2020 #11
Chainfire Dec 2020 #7
42bambi Dec 2020 #10

Response to 42bambi (Original post)

Wed Dec 30, 2020, 02:25 PM

1. Yes it would

and it would be a good idea if companies weren't at all allowed to charge the incredibly high rates they do.

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Response to BainsBane (Reply #1)

Wed Dec 30, 2020, 03:02 PM

4. In which case, lower income people's access to credit would be curtailed

Pulling some data from Lending Club's website for example -

A-grade loans originating between Q1 2007 to Q3 2016 paid an average interest rate of 7.14% and the average net annualized return was 4.62% for investors. These stats were 10.6% and 5.79% for B-grade loans, 13.93% and 6.1% for C-grade, 17.42% and 5.91% for D-grade, 20.40% and 5.35% for E-grade, and 24.52% and 3.92% for FG-grade.

The difference between paying 24.52% and 7.14% on a 60 month, $10,000 loan is about $92.04 a month. I don't know how much that $92 per $10,000 borrowed difference will impact loan discharge rates, but I suspects it's not enough to go from 20-ish% to under 7%.

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Response to Massacure (Reply #4)

Wed Dec 30, 2020, 03:12 PM

5. I don't believe 30% interest rates are necessary

for credit card companies to turn a profit. As it stands, credit card debt is toxic debt. It will bury a person.

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Response to BainsBane (Reply #5)

Wed Dec 30, 2020, 03:13 PM

6. I'm with you.

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Response to BainsBane (Reply #5)

Wed Dec 30, 2020, 03:23 PM

8. I agree with you that credit card debt is toxic debt

That said, if a company expects to charge off 20% of their money lent to a certain demographic, they are not going to lend to that demographic unless they can charge 25-30% interest.

The pertinent question is whether that demographic is better off locked out of the credit card market? I don't think there is a right or wrong answer to that, it's a matter of values.

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Response to 42bambi (Original post)

Wed Dec 30, 2020, 02:26 PM

2. It would be a great promotional idea

Any company that does that should advertise it. Itís a good selling point.

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Response to 42bambi (Original post)

Wed Dec 30, 2020, 02:35 PM

3. That would be Fantastic,

 

but,it ain't going to happen. Just paid off our one Son's card for him as a Covid result. His Card holder jacked the interest rate to 28% because he only made a partial payment. Plus put a demand payment of his balance with in ninety days. Got his payoff reduced to one third of the balance if paid via electronic payment within thirty minutes.

Got to love good old Wells. Still the same old POS from years gone by.

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Response to Wellstone ruled (Reply #3)

Wed Dec 30, 2020, 03:46 PM

9. Check out

Credit Unions. Their rates are good and offer the same services as any bank. Profits are returned to us in better rates for loans, savings, mortgages..

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Response to Deuxcents (Reply #9)

Wed Dec 30, 2020, 04:20 PM

11. Been a Credit Union member since 1981.

 

This Covid thing has messed up millions of Households. When your hours get cut,and the same happens to your partner,it is a matter of survival mode. Once that demand notice is cut,your credit score goes sub 600 asap. Wells as well as others post to Experion before sending out their demand orders.

Yes Credit Unions are the only way to go. He has moved his direct deposit to his partners Federal Employees Credit Union.

There are thousands of parents bailing out their Adult Kids at this point.

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Response to 42bambi (Original post)

Wed Dec 30, 2020, 03:20 PM

7. Credit companies being generous

Somebody must be on dope. You could easier convince a lion to become a vegetarian.

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Response to Chainfire (Reply #7)

Wed Dec 30, 2020, 03:47 PM

10. You gave me a giggle - I am eating pistachio nuts, maybe

they are better than dope. That said, you are probably correct. I'm just sad for all those who have nowhere to go for help - losing your credit in todays environment will be devastating for them.

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