Feds Deliver Tough Love to Credit Card Consumers

You’ve no doubt heard that the Feds will rule this week on new sweeping changes to the credit card industry. http://www.consumeraffairs.com/news04/2008/12/credit_cards_fed.html


Part of their proposal is that credit card companies will not be permitted to raise the interest rate on existing balances. While many seem to be thrilled with this prospect and feel that justice will be served, some are oblivious to the backlash that will inevitably occur, namely the elimination of several credit card companies due to their inability of maintaining profitability without the use of such monstrous tactics, and the elimination of credit cards being issued to anyone with less-than-perfect credit profiles.

Over 65,000 consumers have sent in feedback to the Feds on this topic along with stories of the aggressive tactics that credit card companies have taken to maintain profits, and to collect on delinquent debt. Many submitted lengthy stories as well, stories which showed that even a perfect payment history did not protect someone from “unfair” treatment at the hands of the credit card companies. There are an abundance of consumers in all aspects of society who feel they have been mistreated by the credit card companies. So it’s no wonder that this is the most involved consumers have been on any issue with the Feds.

While I agree with the premise of most of the proposals on this matter, there are obviously going to be some privileges that will be revoked with such regulations. One of which being the elimination of small credit card balance issuers who typically issue credit to high credit risk consumers. Many economists are attempting to sway the Feds due to this “downside” but personally, I think it’s GREAT.

This is the first time in a long time that I would find myself able to say this, but I think that both the proactive steps as well as the reactive scenarios are excellent for our economy. While the pill will be hard to swallow on both sides, we have become a society dangerously dependent on credit cards. At what point did we as consumers think that we needed so much more than we could actually pay for? In my opinion, those who are in tough financial times, thus possessing low credit scores, do not truly need the temptation of a credit card—at any rate or any available balance. Whether one is wealthy, middle-class, or poor, one does not truly need a credit card. As a society we have given away too much of our freedom and helped build these credit card companies to the flesh-eating monsters that they are. WE have created this monster. We only have ourselves to blame. I firmly believe that a dose of “tough love” will aid in eliminating some credit card companies and their high credit risk junkies, and that is a very good start.

Copyright 2009 Kellene Bishop. All rights reserved. You are welcome to repost this information so long as it is credited to Kellene Bishop.

The Real Scam

You’ve heard the line “Your money or your life.” Lately I have come to regularly witness the scams that would rob many of both. This all too real deceit is perpetrated by anonymous individuals living in dark caves of cowardice, well-intentioned loved ones and friends, and the media. The intended scam occurs when misinformation is dispensed to individuals truly seeking to better their lives, become more, and to succeed at higher levels, but who fall prey to lies of bitter, pessimistic, or truly ignorantly charged motives.

The media would have us believe the proverbial sky is falling and thus we should halt our normal lifestyle and take no risks of progression. Anonymous posters to websites would have us take their cowardly, unsubstantiated posts and obliterate years of respected relationships, education, and sound evidence. Loved-ones and friends, in the name of saving us from hurt, would have us avoid any part of life that might be challenging or trailblazing. Ironically, research has shown that in most cases, the loved one is actually lacking in the fortitude themselves which may be necessary in watching us struggle.

Here’s a perfect example of an attempted scam that could have had devastating effects if it were attempted on a person with less resolve. One of my clients, who I consult for regularly regarding the utilization of advanced finance strategies for his clients, came to me with a somewhat “prickly” transaction. In spite of the deal’s obvious glitches, this fine expert was able to structure a solution for his client which offered 100% financing for his project (unheard of nowadays—especially in commercial transactions), NO interest rate, NO payments for the duration of the 24 months of capital infusion, and no personal guarantee. Clearly this was a phenomenal solution for his client and obviously indicative of the expertise that this professional brings to the table when he takes on a client. However, when he initially took on the project he was overwhelmed and even shocked by the number of “caring or concerned” individuals who let him know that he should pass on the deal and not proceed because it was impossible, a waste of time, a dubious project, or a pipe dream, etc. Had this client of mine heeded their advice, he would not be several million dollars wealthier for a job well done, nor would have be presently overwhelmed with other business professionals standing in line for a similar proposal on behalf of their projects.

Oh, here’s another interesting twist. Since this client of mine is an experienced advisor in matters such as these, his prospective clients pay him $5,000 an hour just to be able to consult with him about their deal! Kudos to him for having his sense of worth to the market for taking such a position. And kudos to the savvy professionals who likewise find value in his services as well.

Ultimately, if the “scam bullets” had hit their mark, over 148 individuals would not have well paying jobs right now, a community would be missing out on a phenomenal economic boon to their growth, and there would be at least one more person in the world who would have been discouraged with his/her lack of success. In this case, the scam didn’t have any efficacy, thank God.

Do we really need more discouragement? Doesn’t the devil have enough advocates? Then why do so many of our associates give us “advice” in the name of “just playing the devils advocate”? Why don’t we hear more individuals saying, “Just playing the angels advocate”?! Should we allow anonymous posts by cowards have any legitimate influence on our pursuit of something better? Fortunately in this case, my client knew what he was worth and knew of his competence. But most people are subject to the winds of rumor in the moment. My position is this is a costly mistake. Our progress doesn’t just affect our own lives. We have a continual ripple effect on the lives of countless others.

At this time of political and economic rife, the real solutions and growth can only come through individuals who possess their own thoughts, rather than subscribing to those of others. We’re all blessed with the ability to choose for ourselves, to act for ourselves. Why let inexperienced individuals in the world of success dictate our actions? Surely we can verify any real concerns we may have in making a decision if it truly has merit.

I subscribe to the camp of “Free to act. Free to choose. Free to succeed.”

May you not only choose wisely, but may you proactively choose.

Copyright 2009 Kellene Bishop. All rights reserved. You are welcome to repost this information so long as it is credited to Kellene Bishop.