Comments on: Deferred Interest Payment Plans Banned http://thefinancebuff.com/deferred-interest-payment-plans-banned.html like a friend telling you about money ... Tue, 22 May 2012 19:53:21 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: Tracy http://thefinancebuff.com/deferred-interest-payment-plans-banned.html#comment-5615 Tracy Thu, 13 Jan 2011 20:56:43 +0000 http://thefinancebuff.com/2009/01/deferred-interest-programs-banned.html#comment-5615 I totally understand about personal responsibility and I am a person who bought all new kitchen appliances and paid off my blanace before interest became due. However, as an attorney I've seen countless consumers who who were taken advantage of. Not everyone has an education and they believe what they are told and don't understand what they read. In one of my cases, my client made the timely payment for his no interest purchases via telephone. The credit card company's clerk, not my client, transposed the account numbers for the bank where the payment was to come from and my clients payment was rejected. The credit card company is now trying to charge my client that one year of accumulated interest claiming he didn't pay by the due date. He did. It's THEIR fault their clerk can't type correctly. So now, I have to come in pro bono to clear this up. In the meantime, its showing up on his credit that he's late on his payments, the account was closed and they've been playing all sorts of games to avoid talking to my firm. This will get resolved, but not before a lawsuit is threatened and they are reported to the state attorney general and FTC. These banks really treat many consumers poorly. Some are lucky, myself included, and are treated well. However, anytime credit card companies see an opportunity to take advantage of someone who is not savvy -- in order to make more money for themselves -- they do. It's sick and that's why I don't use credit cards anymore. If I can't buy something outright, I don't buy it. I totally understand about personal responsibility and I am a person who bought all new kitchen appliances and paid off my blanace before interest became due.

However, as an attorney I’ve seen countless consumers who who were taken advantage of. Not everyone has an education and they believe what they are told and don’t understand what they read. In one of my cases, my client made the timely payment for his no interest purchases via telephone. The credit card company’s clerk, not my client, transposed the account numbers for the bank where the payment was to come from and my clients payment was rejected. The credit card company is now trying to charge my client that one year of accumulated interest claiming he didn’t pay by the due date. He did.

It’s THEIR fault their clerk can’t type correctly. So now, I have to come in pro bono to clear this up. In the meantime, its showing up on his credit that he’s late on his payments, the account was closed and they’ve been playing all sorts of games to avoid talking to my firm. This will get resolved, but not before a lawsuit is threatened and they are reported to the state attorney general and FTC.

These banks really treat many consumers poorly. Some are lucky, myself included, and are treated well. However, anytime credit card companies see an opportunity to take advantage of someone who is not savvy — in order to make more money for themselves — they do. It’s sick and that’s why I don’t use credit cards anymore. If I can’t buy something outright, I don’t buy it.

]]> By: DD http://thefinancebuff.com/deferred-interest-payment-plans-banned.html#comment-5115 DD Mon, 15 Nov 2010 17:52:06 +0000 http://thefinancebuff.com/2009/01/deferred-interest-programs-banned.html#comment-5115 Only one problem with the new way of doing the 12 month same as cash, I end up paying a lot more over the 12 months and then have to wait to get my interest paid back to me. Otherwords, this makes it a lot harder for the consumer to pay off the card balance in the required amount of time and the banks will most likely get to keep all of the interest that was paid. Example, I just purchased a mattress set for 3197.16 (nice set), I was told 12 months same as cash. I made a payment of $300; however, when my next statement came only 259.72 was placed towards my purchase and 40.28 was held out for interest. This makes it much harder for me to calculate a monthly payment to get the entire purchase paid in full by the required date in order to get all my interest paid back to me. Sounds like this benefits the banks, not the consumer. In the past I have done the same as cash purchases that were much clearer than my current statement. It would list out my interest that was being held in abayance and would give me a date that if I did not have the balance paid to 0, I would be required to pay the interest. The new way, does not even give me a date! I had to call and ask. Only one problem with the new way of doing the 12 month same as cash, I end up paying a lot more over the 12 months and then have to wait to get my interest paid back to me. Otherwords, this makes it a lot harder for the consumer to pay off the card balance in the required amount of time and the banks will most likely get to keep all of the interest that was paid. Example, I just purchased a mattress set for 3197.16 (nice set), I was told 12 months same as cash. I made a payment of $300; however, when my next statement came only 259.72 was placed towards my purchase and 40.28 was held out for interest. This makes it much harder for me to calculate a monthly payment to get the entire purchase paid in full by the required date in order to get all my interest paid back to me. Sounds like this benefits the banks, not the consumer. In the past I have done the same as cash purchases that were much clearer than my current statement. It would list out my interest that was being held in abayance and would give me a date that if I did not have the balance paid to 0, I would be required to pay the interest. The new way, does not even give me a date! I had to call and ask.

]]> By: Investor Junkie http://thefinancebuff.com/deferred-interest-payment-plans-banned.html#comment-4025 Investor Junkie Fri, 14 May 2010 15:07:24 +0000 http://thefinancebuff.com/2009/01/deferred-interest-programs-banned.html#comment-4025 Tricked? It more an issue of education than anything else. I currently have this on my 65" TV, 0% for 12 months. It was explained VERY clearly to me what the terms were. That at the end of the 12 months, if I did not pay I would owe the interest for the past 12 months. The CC statement also does this very well. The bigger picture is lack of financial education is the root issue. It should be up to the individual to figure this out. I donno how much clearer the terms could be. When you say pitched, I see the reverse. It's the ones who are responsible that are screwed, instead the irresponsible are given more of a "free ride". Laws that typically try to "level the playing field" usually don't work and cause unintended issues. In this case it will make it more costly for everyone. Tricked? It more an issue of education than anything else. I currently have this on my 65″ TV, 0% for 12 months. It was explained VERY clearly to me what the terms were. That at the end of the 12 months, if I did not pay I would owe the interest for the past 12 months. The CC statement also does this very well.

The bigger picture is lack of financial education is the root issue. It should be up to the individual to figure this out. I donno how much clearer the terms could be.

When you say pitched, I see the reverse. It’s the ones who are responsible that are screwed, instead the irresponsible are given more of a “free ride”. Laws that typically try to “level the playing field” usually don’t work and cause unintended issues. In this case it will make it more costly for everyone.

]]> By: TFB http://thefinancebuff.com/deferred-interest-payment-plans-banned.html#comment-4023 TFB Fri, 14 May 2010 13:45:03 +0000 http://thefinancebuff.com/2009/01/deferred-interest-programs-banned.html#comment-4023 Investor Junkie - I totally understand. When they advertise 12 months same as cash, they create the impression it's an interest-free note for 12 months. And for those who pay off in 12 months, it is. The new rules hold them to it for everyone. I already said it's going to make it more expensive. I don't disagree with you there. Consumers who know how to play the game were benefiting from those who don't and who were tricked into thinking it was a no interest loan no matter what. Why pitch one group of consumers against another? Make it not so much of a game and let everyone play it more safely. Investor Junkie – I totally understand. When they advertise 12 months same as cash, they create the impression it’s an interest-free note for 12 months. And for those who pay off in 12 months, it is. The new rules hold them to it for everyone. I already said it’s going to make it more expensive. I don’t disagree with you there. Consumers who know how to play the game were benefiting from those who don’t and who were tricked into thinking it was a no interest loan no matter what. Why pitch one group of consumers against another? Make it not so much of a game and let everyone play it more safely.

]]> By: Investor Junkie http://thefinancebuff.com/deferred-interest-payment-plans-banned.html#comment-4018 Investor Junkie Fri, 14 May 2010 12:08:19 +0000 http://thefinancebuff.com/2009/01/deferred-interest-programs-banned.html#comment-4018 TFB, just to be clear on my last statement when I say "increase costs" it could be the loan terms, or even worse the actual sale price of the product. TFB, just to be clear on my last statement when I say “increase costs” it could be the loan terms, or even worse the actual sale price of the product.

]]> By: Investor Junkie http://thefinancebuff.com/deferred-interest-payment-plans-banned.html#comment-4017 Investor Junkie Fri, 14 May 2010 12:03:31 +0000 http://thefinancebuff.com/2009/01/deferred-interest-programs-banned.html#comment-4017 TFB, I assume you agree with time=money and discounted cash flow. How is charging interest retroactively not part of this equation? Let me ask you this question then, if you were to loan out money (let's say a bond since I know you like them) wouldn't you expect to get paid for holding the note? What this law (and what you are suggesting) is a interest free note for 12 months guaranteed. Do most people pre-pay before the term is up? I assume yes, but where the bank/company makes up is the ones who don't and therefore the high interest rate that comes with it. They must recoop the loaned out money somehow. The other method then is retailers will increase costs instead to make up the difference in this law. Either way the consumers who know how to play the game will lose. TFB, I assume you agree with time=money and discounted cash flow. How is charging interest retroactively not part of this equation? Let me ask you this question then, if you were to loan out money (let’s say a bond since I know you like them) wouldn’t you expect to get paid for holding the note? What this law (and what you are suggesting) is a interest free note for 12 months guaranteed.

Do most people pre-pay before the term is up? I assume yes, but where the bank/company makes up is the ones who don’t and therefore the high interest rate that comes with it. They must recoop the loaned out money somehow.

The other method then is retailers will increase costs instead to make up the difference in this law. Either way the consumers who know how to play the game will lose.

]]> By: TFB http://thefinancebuff.com/deferred-interest-payment-plans-banned.html#comment-4012 TFB Fri, 14 May 2010 04:27:09 +0000 http://thefinancebuff.com/2009/01/deferred-interest-programs-banned.html#comment-4012 Investor Junkie - Just to be clear, the manufacturer or the retailer can still offer 12-month same as cash. It's just they can't charge interest retroactively. When the 12 months are up, they can start charging interest on the remaining balance. Consumers can still buy the products without having saved all the cash. The new rules inject truth to advertising -- no interest really means no interest. True, removing retroactive interest makes it more expensive to offer this kind of promotion, but if financing promotion moves products, they may still go for it. Investor Junkie – Just to be clear, the manufacturer or the retailer can still offer 12-month same as cash. It’s just they can’t charge interest retroactively. When the 12 months are up, they can start charging interest on the remaining balance. Consumers can still buy the products without having saved all the cash. The new rules inject truth to advertising — no interest really means no interest. True, removing retroactive interest makes it more expensive to offer this kind of promotion, but if financing promotion moves products, they may still go for it.

]]> By: Investor Junkie http://thefinancebuff.com/deferred-interest-payment-plans-banned.html#comment-4011 Investor Junkie Fri, 14 May 2010 02:40:55 +0000 http://thefinancebuff.com/2009/01/deferred-interest-programs-banned.html#comment-4011 Sorry TFB, but disagree. This is great for the irresponsible consumers. For the ones who used this to their advantage are screwed out of this. I don't need a nanny to take care of me. This means more consumers will have to wait until they have the cash to purchase the item. In itself I have no issue with this, but it will slow down some of the big ticket items people purchase. So the large consumer good companies will take a hit from this year and maybe long term. Sorry TFB, but disagree. This is great for the irresponsible consumers. For the ones who used this to their advantage are screwed out of this. I don’t need a nanny to take care of me.

This means more consumers will have to wait until they have the cash to purchase the item. In itself I have no issue with this, but it will slow down some of the big ticket items people purchase. So the large consumer good companies will take a hit from this year and maybe long term.

]]> By: Bill http://thefinancebuff.com/deferred-interest-payment-plans-banned.html#comment-3998 Bill Thu, 13 May 2010 02:20:48 +0000 http://thefinancebuff.com/2009/01/deferred-interest-programs-banned.html#comment-3998 Don't worry, smart lenders will come up with new financial products. Probably market interest only loans more and rebate the interest back if principle is paid in 12 months. Don’t worry, smart lenders will come up with new financial products. Probably market interest only loans more and rebate the interest back if principle is paid in 12 months.

]]> By: Amber http://thefinancebuff.com/deferred-interest-payment-plans-banned.html#comment-3924 Amber Sun, 02 May 2010 17:01:14 +0000 http://thefinancebuff.com/2009/01/deferred-interest-programs-banned.html#comment-3924 Um this is not good for consumers you idiots !!!! Now for people like me who used the 12 months no interest, no payments, same as cash programs who actually paid it off in 12 months, I can no longer buy something when I need it !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Once again middle class is screwed Thanks liberals and Obama WHAT A JOKE Um this is not good for consumers you idiots !!!!
Now for people like me who used the 12 months no interest, no payments, same as cash programs who actually paid it off in 12 months, I can no longer buy something when I need it !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Once again middle class is screwed
Thanks liberals and Obama
WHAT A JOKE

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