There's been a lot of buzz and hum about credit cards recently. And why not? Credit is a sore subject to some, a point of pride for others, and for folks that never had it? Could go either way, really.
So, let's highlight some credit card stories of the past few days:
One of the biggest stories: The Heartland Systems break-in. I wrote a piece for the CU Soapbox on the hack about a week ago (click to read), and new horror stories just keep popping up. Wired Magazine has been keeping tabs on the accounts affected (click here to read) and CreditCards.com say the effects have hit financial institutions on all levels and in many states (click to read).
More and more, banks and credit card companies have been driving up the rates (click to read).
Have anything else to share on credit cards? Our comments section is always open.
They'll Be Runnin' from Collectors When They Come! The next hill to climb
by Ron Daly
Ready for some good news in all this doom-and-gloom? We've turned a corner in the financial crisis!
Ready for the bad news? It's the corner of Wall Street and Main Street.
What does that mean? Not everyone had stocks. Not everyone had thousands/millions/billions tied up in the market. Not everyone has 401k's and retirement packages.
But doggone if just about everyone has a credit card.
And now, banks and credit card companies are shielding themselves against bankruptcy by calling in the tab, so to speak - massive rate hikes, lowering of credit limits, and seizure of assets.
Be Upset...Be Very Upset: Bankers come forward to CNN about predatory lending
by Ron Daly
As the Financial Crisis looms and the bailout comes to life, the amount of damning evidence against finance companies continues to grow. This story, from CNN (click here for print), comes from two bankers who were pressured by Bank of America to drive cardholders deeper and deeper into debt.
Watch the video to see the story, or click the above link to read.
I got curious when I saw this story pop up in my blog reader. It has to do with loans. Not car loans, which, like home loans, are defaulting at an alarming rate following the bad tidings from this weekend.
No, these were loans for fuel. I'll say that again - a loan for fuel.
This winter, the Maine Credit Union League has authorized small loans to people who have to keep warm. The loans, which have a $5,000 cap, are intended to keep people with high heating costs from getting stuck paying for outrageous fuel prices. The CU decides on the loan and, if and when the loan is approved, mail a check directly to the oil company.
This made me think about Microloans - Kiva.org is a good place to learn more - which involve loaning a small amount of money to a small, poor business to get them started/keep them going. The default rate on these loans is usually very small, and the business model leaves a bit to be desired - read this article from the New Yorker. All in all, however, microloans can make a difference in the lives of the "working poor" as they're often described.
As America has gotten more and more mired down in debt, the concept of more lending is always a little puzzling. Sure, people need things like homes and cars and now, sadly, very expensive fuel for those homes and cars. But what will it take to keep us from all being under the gun?
TIME FOR SOME OPINIONS:
What do you think of small, practical life loans, such as the "fuel loan" above or "micro-credit"? Do Credit Cards take the place of small personal loans?
