The New York Attorney General shut down a network of debt collection agencies today that were run by convicted felon Tobias Boyland, who along with his colleagues impersonated police officers, threatened debtors with arrest, and told them they were being sued in civil court. Boyland is also an author and a musician, and he has an awesome website, bagsofmoney.us, which—warning—launches into a street-friendly rap song as soon as it loads.
If you’ve fallen into a debt pit and can’t make your credit card payments, and now you’re watching them steadily mount with penalties, fees, and steep interest rates, consider negotiating a lower payment. The New York Times reports that while most card companies won’t admit it officially, they know when they’ve got a customer who can’t pay, and they’re much more willing to settle for a lower amount than they were a year ago.
Given the state of the economy today, is it better for me to reduce my 401k to a minimum and use the extra funds to pay off my credit card debt? This is a good time to put money into the markets, based on my admittedly limited understanding, but with interest rates going through the roof (my personal Chase card went from 12.99 to 23.99), I would like to kick down my cc debt (now at around $6,000) faster. I’m currently only putting 6% in my 401k, and I’m fairly young (35). Have you advice for me?
Credit cards weren’t always the adorable little pocket debt machines that they are today. They weren’t even plastic until AmEx decided to class things up in 1959. Travel back to the good old days when credit cards were a “ticket for anyone to spend freely and decide when was best to pay it back” with this revealing photo set from Slate.
“Revolvers”—customers who keep a revolving balance on their credit cards—used to be the cash crop for credit card companies. But now more and more of them are turning into expensive charge-offs, and the new CARD act is going to make it harder to acquire those riskier customers anyway. As a result, card companies are beginning to look more closely at the customer who was most hated back in the credit-orgy years: the deadbeat.
Forbes wanted to know which states had the highest average balances per household in May, so they took the total amount of debt in 50 major metropolitan areas, divided that by the number of households, then divided that by the median household income for that area for May. Here are some of their results.
While we were concentrating on other things (Snuggie testing, for example), there has apparently been something of a backlash going on against NPR’s Planet Money podcast for its rude treatment of Congressional Oversight Panel Chair Elizabeth Warren. NPR’s Adam Davidson has since expressed regret that he talked over Ms. Warren in a rude way — but despite the mea culpa, a series of links about the issue has popped up in our inbox more than a week later.
Getting into debt is easy. Winding up in default is easier yet; all you have to do is not pay your bills for several months! So how do you deal when the lender doesn’t want to wait around for you any longer and has moved on to more drastic action? Here’s three ways, only two of which are advisable.
New graduates are about to walk smack into the Great Recession, and they need every bit of financial advice they can get. The Wall Street Journal has five excellent money tips that should apply not just to new graduates, but to everyone.
Sallie Mae‘s 2009 study of credit card use shows that students just love binging on plastic. Kids these days have more than four cards on average, and most of them carry a balance pushing $3,000. Many don’t tell their parents, and almost a fifth graduate with more than $7,000 of debt. This is how meltdowns start…
The comparison shopping website PriceGrabber.com just completed its “what are you going to do with your tax refund?” survey for the second year in a row, and not surprisingly there are some notable differences between last April and now. The biggest change is among those who plan to spend the money: it was 44.0% in 2008, but only 29.2% this year.
Chicago Democrat Luis Gutierrez introduced a bill last month that supposedly reforms out of control payday lending, where interest rates can exceed 300%, but actually gives payday lenders the freedom to charge annual interest rates that can exceed, um, 300%. It doesn’t sound like much of a reform, and in fact Gutierrez has been heavily funded by the payday lending lobby. But luckily for you and me, Stephen Colbert explains why this is all a good thing.
Vanity Fair’s April cover story is on Iceland’s banking massacre — detailing how the the tiny, well-to-do country committed “one of the single greatest acts of madness in financial history.”
“Good news about your credit card account,” proclaims the letter Wilman recently received from Chase. Starting in May, you’ll be able to use that Circuit City card to make purchases at Best Buy. We think this is more like “mixed feelings” news, but on the plus side you won’t have an otherwise good credit card account closed (assuming you care about your FICO score). See the Chase letter below.