Denying them the opportunity at all is much kinder and more mutually beneficial.

The common sense, fair thing to do with people in dire financial straits is to cut off any more access to commercial credit, and not allow them any more until they've paid everything they currently owe (WITHOUT raising their interest rate). This can be a long penance, but it's better than a BK.

I know this is happening in England, but I can easily see it happening here.

Does the word USURY mean ANYTHING anymore????

FYI, I've never filed a BK; I've had one charge-off that ended up being three DIFFERENT items on my CR (ALL of which remained after reaching, and satisfying, a settlement with a CA).

In the current credit system, there is no nobility in paying off bad debt. Corporate loansharks are as helpful as free beer at an AA meeting.

you can file a dispute with the credit agency; the claimant company then has 30 days to confirm the bad debt or the credit agency must remove it from your record. If you've made good on the debt, they often won't "confirm" w/in 30 days and it will be wiped from your record.

"daddy," i wonder how you would feel about the comment "the common sense thing to do to combat gun violence is to cut of people's access to guns." freedom of contract is a constitutional right.

without a credit card, one can't rent a car, engage in transactions over the internet, get a hotel room without putting down a hefty deposit, etc. denying people access to a credit card is to make them a second class citizen of sorts. is it your position that people with a poor credit history just flat out as a matter of law shouldn't be permitted to engage in certain activity?

also, are you really suggesting that people should be able to "lock in" their interest rate by defaulting?

there has been a lot written on this topic in connection with a case called "williams v. walker thomas furniture." you may want to check it out.

Actually, the first time I filed the dispute, it came back VERIFIED!! (It's since been dropped, but damage was done). And there HAS been a lot written about the topic--on creditinfocenter.com. Check out the discussion boards.

"the common sense thing to do to combat gun violence is to cut of people's access to guns." Ummm, if the person has previously committed a crime with a gun, the answer is YES! That's why we have BACKGROUND CHECKS!! And the right to bear arms is a Constitutional Right, too. If Eric Harris and Dylan Klebod wanted to buy guns today, would we be up in arms (no pun intended) over the loss of their constitutional rights (if they weren't dead)?

We do have freedom to enter into contract, but illegal agreements are not covered by the constitution. A 49% interest rate is usurious. Usury is illegal. Ergo, the agreement in the original post is illegal.

are you really suggesting that people should be able to "lock in" their interest rate by defaulting?

We need some common sense (I have to say it like that--spam censor). Does it make sense to charge people MORE money when they obviously can't pay off what they already owe?? We all know credit card companies jack up their rates when you're as much as TWO DAYS LATE!! (yes, I'm angry). So by the time someone has defaulted, they are likely paying 25% today. So, yeah--I'm saying shitcan the late fees, take your 25% legal f--in' usury, and shut the f*** up. 25% is not a break, and it's not a privilege. It is a penance. It is ENOUGH of a penance.

Finally, regarding the things one cannot do with a credit card--
1) What the hell is somebody doing renting a hotel and a car when they can't even meet their own bills?, and
2) VISA check cards, issued by most consumer banks to those with accounts, have rendered conventional credit cards useless. I've engaged in plenty of internet transactions with my check card, as well as reserved hotel rooms (they can't tell it's a check card over the phone). Renting a car can be a hassle, but putting a $300 "hold" until I return the car is much more palatable than paying 28% because I was 48 hours late with their payment. Furthermore, I believe that paying 50% MORE for a good or service, while others pay no more than 25%, IS a form of 2nd-class citizenship. It is the financial version of the Scarlet Letter.

As conservatives, we like to blame the consumer for entering into bad business transactions with companies. Well...it goes both ways. If companies enter into a contract with a bad CONSUMER, you eat your debt and learn for the next time. But credit card companies don't want to do that.

It is bad business, and it is bad for the economy, to engage in predatory lending and usurious interest fees. It's enough to make someone never want to buy anything again.

WHEW! Although my "kids" are the 4-legged kind, I call myself "Daddy". It's a quirk I have.

Look forward to your response.

The word usury is indeed appropriate. If there were no options for people with bad credit, your argument would be weak, but would at least exist. The obvious way to limit risk for a credit card issuer is to issue a card with a low limit. Capping someone's limit at say, $500 leaves the issuer with a very manageable risk. Furthermore, a person can obtain a credit card from reputable banks by placing a deposit down. There is also the option of check cards as mentioned by Daddy.

At the interest rates mentioned, the issuer is obviously looking for people to default, and then seeking to try to recover what our legal system will allow.

So my answer is, no they are not providing a service. They are simply yet another company that equates making a dollar with doing good or being right. There are plenty of opportunities for people and companies to make an honest living without resorting to garbage like this. Yeah, I know, I can hear all the cries about a "nanny state" already, but I suggest to you the issue is not black or white, and that there is an awful lot of gray area between these people and the nanny state. It is perfectly possible to defend free markets and limited government without coming to the defense of predatory lenders.

"Daddy," i don't mean to be making fun of your name by putting it in quotes, i just don't feel quite right referring to someone as "daddy." ;-)

i don't know much (anything, really) about usury law, so i can't speak to the legal issues of charging such a rate. my point is only that i don't automatically think that 50-70% interest is unconscionable.

first, we should remember that if you pay your bill in full, on time, you pay no interest - - so whether the rate is 3% or 300%, it makes no difference.

second, keep in mind that credit card debt is unsecured debt, so it can all be wiped away, i.e. with bankruptcy. it's not like we're selling people into indentured servitude.

third, this group of people already has a history of not paying their bills. if their credit report is bad enough that they can only get this card, there is a high risk that they're on the way to filing for bankruptcy soon anyway, esp if they default on your card. so any racked up debt will be wiped away, since it is unsecured.

in a world where rates are capped at say 5%, there are a small number of people that can get credit cards, as companies won't be willing to enter into agreements with consumers that may be a little more high-risk. raise that rate to 10%, 15%, 20%, and at every step along the way, more and more people are able to get credit cards.

right now, there are some people who are unable to get a credit card at all in the US because of a poor credit history. and it's really too bad, b/c every item on your credit report sticks with you for 7 years, and the only way to build good credit is to have open accounts and pay them on time. so once you get yourself into trouble, you cant open new accounts, so you cant improve your score, etc - it's a catch-22.

this card, with its high rate, gives people the opportunity to open a line of credit and to pay on time. making ontime payments on a revolving credit account is the best way to restore your credit. and the higher the interest rate, the more likely people are to pay on time.

you seem to be pretty upset about late fees, but the reason late fees exist isnt to make the credit card company untold billions in "easy money," it's to get people to pay their bill on time. it's what's called a negative incentive. a parking ticket is another example of negative incentive to get people to obey parking laws. when was the last time you saw a person parked illegally in a handicapped spot? that's something that you rarely see b/c the fine for that in most states is hundreds of dollars. given the opportunity, people park illegally in other places, where the fine is lower. similarly, when it comes to paying bills, people make an effort to pay those with a hefty late-fee on time.

when i was in college, the late-fee on our electric bill was .5%. guess which bill got paid last?

i have a hard time having sympathy for people that make agreements and don't abide by them. if i loan you $ and you promise to make a payment on the 15th of every month, then gosh darn it, you'd better make that payment by the 15th. i'm not interested in your excuses for being late, etc. you made an agreement, stick to it. i expect the money on that day, i should get it. if our agreement says that you have to pay a $20 late fee, and you already agreed to do so, then how can you complain about it later? how can you say "aw, comeon, it's only one day late?" a deal is a deal.

BV Big Bro, you say that the "obvious way to limit risk for a credit card issuer is to issue a card with a low limit." i don't think that's right - - here you have a company that is already engaged in the credit card business. they want to add a service where they issue credit cards to high-risk people. these high-risk people as a group have a much higher default rate than the existing customer base. if you issue the cards at the same interest rate, you lose money, no matter what the credit limit is.

i think it's great that this card company provides people with an opportunity to build their credit reputation. i dont think that they are "fleecing" anyone, because i think that they are taking a huge risk, and of those people that default, they probably won't get paid at all by many of them.

if you make this rate illegal per se, the result won't be these people getting a lower rate, it will be these people not getting the opportunity at all. that, i think, is much more unconscionable.