Credit Card Co. pay cash to close accts.

[Missourian]

Credit card firms pay some clients to close their accounts

By Kathy Chu, USA TODAY NEW YORK — If you've recently been offered cash from a credit card company to reduce your debt or close your account entirely, be forewarned: Your business may no longer be wanted. "What the card company is saying is that right now we're playing nice, but if you don't take it, we might start playing hardball" by raising rates or cutting credit limits, says Justin McHenry...

For an industry that makes money when consumers pile on debt and pay the minimum, the promotions are a telling sign of issuers' struggle to shed risk and clean up their balance sheets. In recent months, banks have also closed inactive credit card accounts or slashed borrowers' credit limits en masse...

<More>http://www.usatoday.com/money/industries/banking/2009-03-05-paid-to-close-credit-card-account_N.htm

Ever heard of anything like this before?

Rats scurrying off a sinking ship?

 

[auditor0007]

I read something similar not too long ago. This is actually a good sign. These credit card companies need to reduce risk, and people need to reduce debt. The only way to get this economy moving again is by reducing debt and increasing savings. There are signs this is already happening as more Americans are saving money. Once savings hit a certain point, people will feel more secure spending again, and they'll actually have some cash on hand to do it. This is when we'll begin to see a real turnaround, probably in about five years.

 

[Zoom-boing]

Our credit card rate has already increased by 5%. We're deadbeats who pay the bill off in its entirety when we use it. My husband's boss's credit card holder didn't like the fact that he pays his bill off in full so they cut his limit to $300.

I asked this on another thread. If living in debt is bad for an individual, why would it be good for a country?

 

[Valerie]

We don't have any credit card debt, but we have an open line of home equity credit since we purchased our home several years ago. We never tapped into it, but it was part of the deal when we got our mortgage and the rate on this is locked at 5.75%. Around the holidays this year we received a form letter out of the blue, offering to pay us 2% to pay off the debt and close the account. I made a phone call to be sure they had it correct that we did not ever tap into it, and they confirmed that and then offered us 2% of the line of credit amount to close the line of credit. Hundreds of dollars just to close it! I did not bite. They are bound to give us that money at that rate any time we might need it and we're going keep our options open and hold them to it. I think the indication is that interest rates this low won't be around much longer. I'm sure many people took their offer and will find themselves looking for a different loan at a higher rate later on.

 

[toomuchtime_]

I read something similar not too long ago. This is actually a good sign. These credit card companies need to reduce risk, and people need to reduce debt. The only way to get this economy moving again is by reducing debt and increasing savings. There are signs this is already happening as more Americans are saving money. Once savings hit a certain point, people will feel more secure spending again, and they'll actually have some cash on hand to do it. This is when we'll begin to see a real turnaround, probably in about five years.

If the US were an export oriented economy like Japan and China, perhaps American workers could ratchet up savings and still have jobs to go to, but in the US household consumption accounts for about 70% of GDP - by contrast China's domestic consumption accounts for about 36% of GDP - so if we deleverage too much now, we might well be deepening and lengthening the recession.

 

[toomuchtime_]

Our credit card rate has already increased by 5%. We're deadbeats who pay the bill off in its entirety when we use it. My husband's boss's credit card holder didn't like the fact that he pays his bill off in full so they cut his limit to $300.

I asked this on another thread. If living in debt is bad for an individual, why would it be good for a country?

Who says living in debt is bad for an individual? How many people would be able to go to college or own a house or a car without living in debt?

 

[wimpy77]

having debt isn't bad it's having debt to live is the bad thing.

 

[Immanuel]

I wish mine had offered me cash. Last year 3 days before Christmas (if you can believe that) I got a letter from Chase, my credit card company, well one of them. I had maintained the account as an emergency card just in case. My main card was from a credit union and I am only paying 8.5% on balance. But I had the Chase card just in case. Well, three days before Christmas I get a letter telling me that because I had not used the card in three years they were canceling my card and there was not a thing I could do about it. They couldn't even wait until after Christmas just in case!

The bastards did this three days before Christmas. I hope they are one financial institution that goes belly up and everyone of the bastards that work there end up on the unemployment line for at least a full year.

Immie

 

[toomuchtime_]

I wish mine had offered me cash. Last year 3 days before Christmas (if you can believe that) I got a letter from Chase, my credit card company, well one of them. I had maintained the account as an emergency card just in case. My main card was from a credit union and I am only paying 8.5% on balance. But I had the Chase card just in case. Well, three days before Christmas I get a letter telling me that because I had not used the card in three years they were canceling my card and there was not a thing I could do about it. They couldn't even wait until after Christmas just in case!

The bastards did this three days before Christmas. I hope they are one financial institution that goes belly up and everyone of the bastards that work there end up on the unemployment line for at least a full year.

Immie

And you hope this happens three days before Christmas, right?

 

[CaféAuLait]

I wish mine had offered me cash. Last year 3 days before Christmas (if you can believe that) I got a letter from Chase, my credit card company, well one of them. I had maintained the account as an emergency card just in case. My main card was from a credit union and I am only paying 8.5% on balance. But I had the Chase card just in case. Well, three days before Christmas I get a letter telling me that because I had not used the card in three years they were canceling my card and there was not a thing I could do about it. They couldn't even wait until after Christmas just in case!

The bastards did this three days before Christmas. I hope they are one financial institution that goes belly up and everyone of the bastards that work there end up on the unemployment line for at least a full year.

Immie

Wow, incredible!

I usually have my shopping done three days before Christmas. /sarcasm

 

[Immanuel]

I wish mine had offered me cash. Last year 3 days before Christmas (if you can believe that) I got a letter from Chase, my credit card company, well one of them. I had maintained the account as an emergency card just in case. My main card was from a credit union and I am only paying 8.5% on balance. But I had the Chase card just in case. Well, three days before Christmas I get a letter telling me that because I had not used the card in three years they were canceling my card and there was not a thing I could do about it. They couldn't even wait until after Christmas just in case!

The bastards did this three days before Christmas. I hope they are one financial institution that goes belly up and everyone of the bastards that work there end up on the unemployment line for at least a full year.

Immie

And you hope this happens three days before Christmas, right?

Nah, the earlier the better... if it happened tomorrow and they were all unemployed until after next Christmas then they would really be having a hard time by the time Christmas came along... Don't even say it... Yes! I am as vindictive as Hell!!!

Wow, incredible!

I usually have my shopping done three days before Christmas. /sarcasm

Actually, I did have my Christmas shopping done the weekend before Christmas this year. They didn't know it though. But, I had received the letter three days before Christmas. Typically I'm still "Santa shopping"... no, my kids don't still believe in Santa, but we still have gifts from "Santa" on Christmas Eve. This year, however, I said, screw it, I'm not going shopping on Christmas Eve come hell or high water!

Immie

 

[CaféAuLait]

Credit card firms pay some clients to close their accounts

By Kathy Chu, USA TODAY NEW YORK — If you've recently been offered cash from a credit card company to reduce your debt or close your account entirely, be forewarned: Your business may no longer be wanted. "What the card company is saying is that right now we're playing nice, but if you don't take it, we might start playing hardball" by raising rates or cutting credit limits, says Justin McHenry...

For an industry that makes money when consumers pile on debt and pay the minimum, the promotions are a telling sign of issuers' struggle to shed risk and clean up their balance sheets. In recent months, banks have also closed inactive credit card accounts or slashed borrowers' credit limits en masse...

<More>Credit card firms pay some clients to close their accounts - USATODAY.com

Ever heard of anything like this before?

Rats scurrying off a sinking ship?

You know if credit card companies wanted people to pay off debt, why they don’t lower interest rates instead of raising them. How about a low or 0% interest rate for a year with the money going straight to the principal? They must be making a killing on their interest rates to pay people to close instead of asking them to pay the debt off.

 

[Zoom-boing]

Our credit card rate has already increased by 5%. We're deadbeats who pay the bill off in its entirety when we use it. My husband's boss's credit card holder didn't like the fact that he pays his bill off in full so they cut his limit to $300.

I asked this on another thread. If living in debt is bad for an individual, why would it be good for a country?

Who says living in debt is bad for an individual? How many people would be able to go to college or own a house or a car without living in debt?

Some debt is necessary. You need to establish credit in order to get loans (for houses, cars) and to do that you incur debt. But too many people live in perpetual debt. Run up credit cards, pay minimum, pay high interest, continue using card. This is what I mean by living in debt. Take a 4 year car loan. You end up paying xx in interest for the car. When the 4 years are up, many, many people turn around and sell or trade in that car to get a new one, thus continually living in debt. If they can do this an also save, ok. If they can do this and live within their means comfortably, ok. But again, many, many people simply do not do this. They turn around and, because they have to have that new car, keep themselves in perpetual debt.

I don't know, I was raised that it's better to own than to rent and to buy the best quality you can afford. It never made sense to me to not pay things off because by keeping that debt, you end up paying so much more for the item. When my husband and I bought our first house we had each saved a pretty damn decent chunk of change individually. We took that money and with the money we received as wedding gifts, used it all as a down payment for our house. It didn't matter that 'only' 5 or 10 percent was required; we dumped as much as we possibly could into the down payment because it reduced the amount of what we had to borrow.

We both worked full time for several years before we had kids. We lived off of one check and saved the other. We also paid extra on our mortgage every month. Because we paid so much down on our first house (and yes, the value of the house increased substantially) we sold that house to move into our current house and we again had an extremely good chunk to use for the down payment, thus keeping the mortgage on this house lower.

Managing your debt and using credit wisely is a good thing; living in perpetual debt isn't. At least that's how I see it.

 

[Missourian]

When I read this article, my first thought was 'The credit card companies see some real hard times coming down the pike".

I think the credit companies are going to return to the 'you must prove you don't need credit to get credit' model that was the status quo for lenders when I was a young man. It looks to me like they are purging the folks who may actually need credit from their customer rolls.

 

[editec]

I discovered recently that I have less than ideal credit as I was changing car isnurance policies. Hence at least one insurer took that as their excuse for wanting to (and failing, of course) to charge me more for car insurance.

I have no credit cards, nor credit card debt, but I do have a mortgage in good standing and a truck payment also in good standing.

So why do I apprently not have a good credit score?

Because I don't have a credit card?

Apparently.

I so don't give a shit, of course, but this indicative of the insanity of this credit card nation of ours.

REfusing to play the credit card game apparently makes you a suspect citizen who must pay more for car insurance?

Yeah...that almost makes sense.

 

[auditor0007]

Our credit card rate has already increased by 5%. We're deadbeats who pay the bill off in its entirety when we use it. My husband's boss's credit card holder didn't like the fact that he pays his bill off in full so they cut his limit to $300.

I asked this on another thread. If living in debt is bad for an individual, why would it be good for a country?

Who says living in debt is bad for an individual? How many people would be able to go to college or own a house or a car without living in debt?

Homes and cars are one thing; the rest is another.