I have little sympathy for both sides of these transactions. Basically the companies sell your people who can't afford this stuff and the people buying know they can't afford it. Both should know better!
1
There was a time when charging People 25-30% was call "Rackateering" punishable by jail time......Now the stores and banks get to do it legally.
4
Gee, can you imagine what our economy would look like if we all lived within our means? At least half the "businesses" in the U.S. would be out of business. The Great Recession and Great Depression would look like mere pebbles on the highway of economic history compared to the car wreck we'd be in today under such circumstances. But I'm no apologist for the "loose credit" industry. More oversight is needed.
1
There needs to be a law capping interest rates at several points above prime.
It is an outrage that banks and credit card companies are allowed to prey on the working poor in this way.
It is an outrage that banks and credit card companies are allowed to prey on the working poor in this way.
8
Sure. Right after they pass a law making sure that people pay their bills.
There are times when credit is needed for instance if you suddenly find yourself spouseless or jobless. However if you find it necessary to charge, make sure those items are truly needed. You want, but don't need cable, nor do you need a smart phone, meals out and a trip to Disney World. Clothing? Check the thrift shop. Use credit that you cannot pay off sparingly. Christmas? My boys treasure what I got them for free, sending in box tops. Now that may not be an option for you, but check out Craig's List. You do not want to be paying for things long after they have ended up in the trash. Except for a very tight couple of years, I have been debt free. Money goes further when it goes to stuff, not to interest!
10
I understand that what these stores are doing is predatory. I just wish you could find more sympathetic examples. Nobody needs a 44" TV. Nor, if low on funds, did Mr. Hall need to buy and iPad or a ring for a friend. Ms. Esposito should swear off credit cards, not big retailers. Finally, while Mr. Garcia seems the most sympathetic but, I don't care how aggressive the sales pitch is, he was not forced to spend more tan he could.
7
Trust me. Synchrony would NOT charge off the last gentleman's debt, if it were accrued legally. They are very aggressive in their collection activities! There is much more to that story for sure!
With 30% interest rates, most of these store credit cards, roll interest due and missed payment late fees onto the borrower. As pointed out in the article, such charges can quickly exceed the principal amount initially borrowed.
We need more education and less aggressive sales. With credit cards offer lower APRs, cash back, and near universal acceptance, these store specific cards are anachronisms. No one thinking of being prudent credit users should ever even apply for these dinosaurs!
With 30% interest rates, most of these store credit cards, roll interest due and missed payment late fees onto the borrower. As pointed out in the article, such charges can quickly exceed the principal amount initially borrowed.
We need more education and less aggressive sales. With credit cards offer lower APRs, cash back, and near universal acceptance, these store specific cards are anachronisms. No one thinking of being prudent credit users should ever even apply for these dinosaurs!
2
Agree with Clay B. re never applying for those cards though I admit getting Macys and Lord and Taylor for deals. I think I used Macys once or twice and the other about once a year. Always pay off the bill.
1
First these store branded credits partnered with GE Credit which GE sold years ago, now Synchrony is taking up the retailers' waning margins/slack, though intrigued with the business model...
with 39% that represents Macys' profits, via branded credit card...does Synchony's profit just tie in with its whopping near 30% interest rate...or do they also get percentage from overall Macys customer expenditures...how does it break down?
MANY upper middle class and beyond are not taking these deceiving optoins...its the SAME lower income people unfortunately, poached for the 33% of last year's loans being SUB PRIME...in AUTO...lots of collusion on these unsuspecting citizens...don't you think....??
with 39% that represents Macys' profits, via branded credit card...does Synchony's profit just tie in with its whopping near 30% interest rate...or do they also get percentage from overall Macys customer expenditures...how does it break down?
MANY upper middle class and beyond are not taking these deceiving optoins...its the SAME lower income people unfortunately, poached for the 33% of last year's loans being SUB PRIME...in AUTO...lots of collusion on these unsuspecting citizens...don't you think....??
4
Almost two decades ago I obtained a store-branded credit card from Macy's. Shortly thereafter I inadvertently missed a payment while overseas. Instead of trying to contact me to remind me to pay the debt -- about $80 as I recall, Macy's reported the delinquency to the credit bureaus. This was a stain on my credit for 7 years. Needless to say, I have never ever shopped at Macy's since then. Nor will I except perhaps at a going out of business sale which cannot happen soon enough for me.
4
While I understand the pain and distress, responsibility is shared between customers who want more knowing they can't afford and oftentimes turn a blind eye on the fine print and card issuers who practice shoddy underwriting.
On the first point, while I agree with a previous comment about better financial education to help better decision making, I cannot get past the fact that if someone does not have available cash to make a purchase, unless it is a necessary item to support life (lodging, food, healthcare...), this person should not deny responsibility when signing up for a line of credit or card. Accumulating thousands of dollars of debt at toy's r us or Key Jeweler does not seem to be a wise or necessary decision.
On the first point, while I agree with a previous comment about better financial education to help better decision making, I cannot get past the fact that if someone does not have available cash to make a purchase, unless it is a necessary item to support life (lodging, food, healthcare...), this person should not deny responsibility when signing up for a line of credit or card. Accumulating thousands of dollars of debt at toy's r us or Key Jeweler does not seem to be a wise or necessary decision.
9
I live in a small city (a little over 100,000) that loves to shop and go out to eat. There is a traditional mall that shows no signs of closing. One of the rare closings that occurred here was Macy's.
So if the retailers are requiring their cashiers to sign up more and more people for credit cards how long before I can't buy something without the cashier begging me, tears in their eyes, to please sign up so they won't lose their job?
7
Also illustrative of another major source of cash for department stores are the cosmetics and fragrances counters, that all pay to rent the highest traffic locations of a department store. As many department stores own their retail locations or pay below-market rents, expect to see department stores sub-leasing more and more square footage to make ends meet.
6
I'm one of the victims of a Macy's card. When the monthly statement arrived late, I paid it off but didn't realize I'd get dinged $39 for a late charge. Then $39 was added every month for several months, which I didn't know because I wasn't getting statements in the mail. When I realized what had been happening, I paid off the full amount. I did write to complain, but got no answer. Obviously I won't ever shop at Macy's again.
22
Every store offering a credit card should be required to post the interest rate consumers will be charged on balances on the cards in great big type on the front of each cash register.
11
This info should be required in classrooms on budgeting, credit, home ownership, etc.
15