Credit Card Bailout

Subprime Blogger asks a good question:

What will the United States do if major credit card companies must file bankruptcy? If the Fed felt they had to bailout the mortgage companies, they will definitely have to bailout the credit card companies.

You know my solution, don’t bailout the credit card companies while leaving the consumers responsible for floating this economy in debt. Bail out the credit card companies by paying off the credit card debt of the consumer. That will bail out the credit card companies! They won’t have any write-offs because none of their clients will be deadbeats anymore and magically all the consumers will have credit ratings that are in the upper 600s, at least.

The best part of the whole thing: we all will get to go out and spend again. We will have reloaded. We can charge the down payment on that hybrid car. We can charge another year at school and books, we can buy furniture to replace the aging furniture the kids broke down before they left the nest. We can buy timeshares, take vacations, eat out at fancy restaurants, go to fancy hair stylists and have our nails done as we get a massage. We can charge a new flat screen, buy a Kindle or charge some gold and silver coins. The world will seem bright and joyful again and we will all bow down to Barack Obama for freeing us from those nasty credit card companies with their 32% interest rates.

Trendy Hot News says

“The best thing people can do is, if at all possible, stop using their credit cards and start paying down the balances, said Kristen Garrett of Advantage Credit Counseling.

No that’s the wrong thing to do. Businesses do more business in the Christmas season than they do all the rest of the year and Christmas is only a month and a half away.

Chessnoid writes

I don’t know the exact details of this bailout but what it looks like is anyone on the verge of bankruptcy will be allowed to have their credit card balances slashed by 40% and allowed to repay the remaining 60% debt at 0% or some other low rate over a few years.

We are way past arguing that there are some rules or moral hazard to this course of action. We need to get the economy moving now!

Bailout the credit card companies by bailing out the consumer!

7 Responses to “Credit Card Bailout”

  1. Thanks for posting the article, was certainly a great read!

  2. By giving the consumer the money to pay off their credit card debt it is quite possible that the economy can move again. I hope that most will have learned a lesson by this experience. It is not so much consumer stupidity as it is the credit card companies desire to get bigger. The biggest issue is the interest rates that are imposed upon those that are strugging to make not only the card payment but also the basic payments each month.
    Try to find a place to live on less than $35,000 a year and pay utilities, gas, food, taxes and small simple things. A second job to supplement this first income is also tough to secure.
    Help the consumer get back on their feet. It can only help to put the country back on the right track.

  3. I don’t want a bail out on my credit card debt. I’m happy to pay the principal and a reasonable amount of interest. But I made a payment ONE hour late and my interest rate tripled, as did my monthly payment. Any bank who accepts bailout money should also be obligated to lower interest rates to 10% or less.

  4. It would be just my luck if some sort of consumer credit card bailout was approved. I’ve never had much credit card debt, but I just finished paying off a new PC I bought on mine. I’ll have to keep my eye on this bit of potential news and charge up a storm if it looks like it will be set to go through.

  5. Credit Card companies are fueling the fire with their late fees and increasing the rates. For people who are trying to pay their Card payments and are one day or one week late, their rates skyrocket and put you into a spiral that you can’t get out of. I want to pay them off, like most people, but am unable too due to the their practices.. And trying to let them know ahead of time that you are going to be late doesn’t work either, I have tryed that. They could care less.

  6. Was it not the credit card companys that gave out all this excessive credit in the first place. Now the banks who are the credit card companies have to get bailed out by the very same people they gave this credit to .Use the bailout money to pay for everyones debt that would end the credit freeze.

  7. It’s unfortunate how badly these companies are screwing themselves. If they were able to eat half of their fees and come up with a reasonable payment plan for half of these people that THEY overextended credit to, they may just be in the clear. Unfortunately, if you are continually hit with late, overlimit and interest fees, even a $100 payment doesn’t make a dent in a balance. Most companies will keep reporting you late until the entire overlimit amount has been paid off- but if you can only afford $100 its not working since it all goes to fees! I have worked with so many people in this type of situation. So sad!

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