Credit Card Companies and Repayment Plans
After skimming this article from CNN Money, I was going to complain that people are now whining to get bailed out of their credit card debt. I was going to ask why don’t the credit card companies just offer a repayment plan, until I read it more closely and saw this paragraph:
Current government rules don’t allow lenders to offer repayment plans that reduce the amount of principal owed and borrowers to repay the balance over a period of several years. In cases where the principal can be reduced, under credit card settlements, borrowers normally are required to pay off the remainder over months rather than years.
What? Credit card companies aren’t allowed by law to offer repayment plans??? I’m sure there’s a good reason for this, but I’m too lazy to figure out why so I’ll ask you all to answer it for me.
But in the meantime, I have two more questions:
- Why don’t the credit card companies change their minimum payment policy so people don’t pay hundreds of dollars each month, just a few dozen? I saw some companies recently jacked up the percentage used to calculate the minimum payment, so why not go the other way?
- From personal experience with friends and family, I know one of the bigger issues with credit card debt repayment is the exorbitant interest rates they charge. Why are the CC companies charging the highest rates to the people who can afford it the least? I mean when you have a 30% interest rate on your debt because you missed a payment, then it becomes exponentially more difficult, or even impossible, to get ahead with your payments! Offer to reduce the rate from 30% to 10%!!! The CC company is still getting a good return on their money and more assurance that they’ll actually get their money. Why push the limits and end up getting nothing due to the borrower filing bankruptcy? Greedy b(^(&^$*ds!
Luckily I’ve never missed a payment and (as far as I know) have a spotless credit history. I really lucked out because I had over $12,000 in credit card debt in college and no job lined up after graduation until my last semester. I made some dumb moves but escaped by the skin of my teeth! But friends and relatives haven’t fared as well and are struggling to keep up with their payments. They’re honest people who want to pay back their debts, but the CC companies (and others) make it extremely difficult. Ease up on my friends, you corporate fools, and you’ll get more money!