The debtors revolt is gaining steam as the few lenders left in our country send out millions of letters raising the rates on their clients credit cards. Many of these people are now following Ann Minch’s lead and telling their credit card companies to take their cards and shove them where the sun don’t shine.
While this is a noble cause and one I may have happily consigned six months ago, these days I have come to the realization that the banks simply do not care. The facts are that they have covered their gambles and have already hedged their bets that most of you will pay and some of you will not . That increase in rate for many consumers who will continue on paying will easily cover the people who default on their debt.
In addition, most of the remaining big banks have received billions in bail out money from American tax payers and they have taken out insurance policies to cover all losses when you do default or revolt.
These bankers know exactly what they are doing. Debtors, not so much…
Guess who is paying for the debtors revolt and their unpaid debts folks? Yup, you and me!! The bank depositors, fellow debtors and the taxpayers. Basically everyone on Main Street.
Soon we will see the tax payers or tea party against the debtors revolt. Homeowner stayer against homeowner walk awayer or good debtor against bad debtor. Why? Because we are all screwing each other in the end as the bankers laugh all the way to You Tube.
Let me explain.
Have you heard the saying, “There is a sucker born every minute?” Well, in the Banks Secret Business Book of Operations 101 sentence one says this very statement. It is the cycle of banking booms and busts and they simply have come to the realization that many debtors in their systems right now are in dire straights and on their credit death beds. Their devilish computer algorithms have determined that these debtors are either going to default or they are going to continue paying on a higher rate.
You are either going to suck on their sucker, default or revolt. In any case, they are covered and you are not. Also, did you know that banks really do not lend out their own money, but the money of their depositors?
Well, you better get banking literate because this is how banks operate.
Selling off credit card debt has given banks a powerful incentive to raise card fees and penalties, according to interviews with dozens of industry analysts, academics and investment specialists.
Here’s why: When banks package and sell card debt, they pass along to investors some of the risk the debt will go bad. Yet, banks often get to pocket much of the profit from rate and fee increases on those accounts. Imposing higher fees on more accounts — without a comparable rise in risk — lets banks raise revenue and keep profits up, at customers’ expense.
Securitization has been a “major impetus” for banks to expand penalty fees and rates in recent years, says Adam Levitin, a Georgetown University law professor and card expert. Banks “have little to lose if they squeeze too hard (if consumers default), but a lot to gain if they can extract additional payments” from card users, he says.
Banks deny any link between securitization and rising penalties. They say fees are rising because of superior data-tracking tools that allow banks to draw precise profiles of card users. Banks can price debt fairly, officials argue, with riskier borrowers paying more, as they should.
They have studied your payment patters and the lender has deemed that an eminent delinquency and default will likely happen. The faster they get you our of their system and in credit hell. The faster they can offer new credit lines to whole new breed of debtors that have been primed for the last 20-30 years.
Just in case you didn’t know, the new breed of debtors that will happily take your place are our children. The people who most parents on Main Street have unknowingly prepared and have primed perfectly to be the perfect consumer who will eat up Ipods, Blackberry’s, credit cards and mortgages at 15-30% without the bat of an eye.
The old debtors are damaged goods and they despise banks. The banks have figured with the help of their super duper computer credit algorithms that they have to purge all of you old debtors out of their systems in order to get a new breed of debtor to happily take your place. The banks are just beating you all to the punch and knocking some of you out with one swift 29% debtors upper cut. Wham!
No one ever said banks were nice and they certainly are not dumb.
Please don’t shoot the blogger, this is just the sad way that adjustable rate credit cards and great depressions work. Banks are covering their a$$es as we head into the depression and I suggest you do the same.
Ann Minch needs to understand how the banking system works before she takes up a cause that just makes it worse for some her other fellow Americans. I am not here to knock Mrs. Minch and her cause. I just want to point out that the banks are covered and we the people on Main Street are just screwing each other in the long run.
It is a sad predicament that our country is in and I feel for many of you who are struggling. Many of you are simply out of luck and a revolt is all you have left.
In this video Mrs. Minch asks Chase Bank, “Do you know who I am?”, “What, are you guys stupid?”
No Ann, I am sorry, they just do not care.
