79% Interest Rate

[jacks1]

Re: 79% Interest Rate

Sanford made his money basically loan sharking, giving credit cards to high risk people and charging rediculus rates....

...and he's also the greatest philanthropist South Dakota has ever seen. Oh, by the way, are these high risk people forced to take the card and use it???? I didn't think so.

[Jacks99]

Re: 79% Interest Rate

Not quite as bad, but close to pay day loan centers and the worst: funding the state by promoting a losing proposition to those that can't afford it. Yes video lottery is up there in "using" the poor.

[Jacks99]

Re: 79% Interest Rate

As far as education, it should be done by parents, but most parents obviously aren't fulfilling that obligation. So I would be in favor of it in school. 100 years ago finances were very simple, not so anymore.

I've facilitated Financial Peace University this year and they also provide a curriculum for school that would be more than adequate.

Personally we don't ever plan on using credit or loans again, except maybe a house if that. Life is too good now without it.

[Prairiehaas]

Re: 79% Interest Rate

I'm with you keeping debt to zero makes life so much easier. I'm trying to get my boy through his UG at State with no student loans. The plan now looks like he will be able to start a Roth with his first real paycheck after graduating. Hopefully the recession doesn't get in the way.

[RowdyRabbit]

Re: 79% Interest Rate

As far as education, it should be done by parents, but most parents obviously aren't fulfilling that obligation. So I would be in favor of it in school. 100 years ago finances were very simple, not so anymore.

I've facilitated Financial Peace University this year and they also provide a curriculum for school that would be more than adequate.

Personally we don't ever plan on using credit or loans again, except maybe a house if that. Life is too good now without it.

Rep.

Dave Ramsey is great.

[filbert]

Re: 79% Interest Rate

Rep.

Dave Ramsey is great.

Ramsey is better than he deserves . . . .so I hear . . .

[Nidaros]

Re: 79% Interest Rate

Even I like Dave Ramsey. He talks to the people and their situation and gives very sound advice. Its amazing to hear how some have gotten into debt so easy and without even trying, myself included, so thats why I think its important that education on using credit is important for everyone of all ages. Someone suggested that teaching credit was a parent's job. Maybe, but maybe its a little less controllable for parents than say toilet training!!

[SF_Rabbit_Fan]

Re: 79% Interest Rate

Exactly...

The other COMSUMER...the person the Federal Govt is trying to save from themselves with the new "Credit card Act" will get this card opportunity....See it as...wow...free money, max it out to the $300 limit and not even think about paying a dime back.


Go Jacks!!

I have a friend who works for one of the other companies in SF dealt with the cards that have a 300 dollar type limit.

He said probably 15% of the cards maxed out the card the day they got it at a liquor store, strip club, or a cash withdrawal. I asked him if he was joking, he said he wasn't.

Another 25% use the card, miss a few payments per year and their balance stays the same for extended periods of time due to late fees.

The other 60% are in good standing and will eventually build up their credit to the point where they will either begin to use another card with rewards and a higher limit or pay the balance off every month. I would guess these people will eventually get car loans, home loans, and live a pretty normal life.

Before anyone crucifies T. Denny, they've got to admit that there are probably quite a few people that got back on their feet and back to a good life due to his willingness to loan them some money. Not to mention all the jobs he provides. Not to mention all his philanthropy.

[SF_Rabbit_Fan]

Re: 79% Interest Rate

Sanford made his money basically loan sharking, giving credit cards to high risk people and charging rediculus rates....

I don't mean this to sound harsh, but this is an incredibly simplistic point of view.

Some might say he made his money by shrewdly taking calculated risks and investing in other people. Not any different than any other successful business person in America. Actually, it is different, because T. Denny was willing to take risks no other bank in America would, which is why he dominates the sub-prime market. Or maybe it is because BoA, Citi, and HSBC are so kind that they don't want to take advantage of people.

Also, there isn't any bank on the face of the earth that "gives" someone a credit card. When you open a credit account, you sign a contract agreeing to do business with that bank. You get the benefit of easy access to money, the bank gets the benefit of getting their money back, plus interest. If you break the contract, the bank will likely sue you to try to get their money back (and it is their money, they loaned it to you). If they break the contract, you can sue them for damages. Pretty much like any other contract in America.

This is like saying the car dealer gave you the car, McDonalds gave you that cheesburger, or HyVee gave you those groceries. You give a business money, they give you a good or service. If you don't like the good or service, don't do business with that company.

Saying

[KUlawJack]

Re: 79% Interest Rate

What amazes me is that a lot of people don't realize that banks are in an adversarial role to consumers. They are not fiduciaries of their customers and don't do things out of the goodness of their heart. Its weird that consumers think otherwise.

[Nidaros]

Re: 79% Interest Rate

I don't mean this to sound harsh, but this is an incredibly simplistic point of view.

Some might say he made his money by shrewdly taking calculated risks and investing in other people. Not any different than any other successful business person in America. Actually, it is different, because T. Denny was willing to take risks no other bank in America would, which is why he dominates the sub-prime market. Or maybe it is because BoA, Citi, and HSBC are so kind that they don't want to take advantage of people.

Also, there isn't any bank on the face of the earth that "gives" someone a credit card. When you open a credit account, you sign a contract agreeing to do business with that bank. You get the benefit of easy access to money, the bank gets the benefit of getting their money back, plus interest. If you break the contract, the bank will likely sue you to try to get their money back (and it is their money, they loaned it to you). If they break the contract, you can sue them for damages. Pretty much like any other contract in America.

This is like saying the car dealer gave you the car, McDonalds gave you that cheesburger, or HyVee gave you those groceries. You give a business money, they give you a good or service. If you don't like the good or service, don't do business with that company.

Saying

I am not so much in disagreemnt with what you say, but I fail to see the folk hero in T Denny that you see. It looks to me all his actions are out of the goodness of himself and for himself and his tax planner, and of course Krafenhoff the health care tycoon.

[Jacks99]

Re: 79% Interest Rate

What amazes me is that a lot of people don't realize that banks are in an adversarial role to consumers. They are not fiduciaries of their customers and don't do things out of the goodness of their heart. Its weird that consumers think otherwise.

Exactly. Just like Vegas, we build those big bank buildings.

[filbert]

Re: 79% Interest Rate

What amazes me is that a lot of people don't realize that banks are in an adversarial role to consumers. They are not fiduciaries of their customers and don't do things out of the goodness of their heart. Its weird that consumers think otherwise.

Actually, any business that has an adversarial role with its customers has a seriously flawed business model.

As we have seen, haven't we?

But people keep forgetting this teensy little truth.

[JackJD]

Re: 79% Interest Rate

What amazes me is that a lot of people don't realize that banks are in an adversarial role to consumers. They are not fiduciaries of their customers and don't do things out of the goodness of their heart. Its weird that consumers think otherwise.

You know better than that, KUlawJack. A typical banking relationship is not adversarial. If it becomes adversarial, quit banking at that bank and let that bank go down the sewer (and the scoundrels running the place be damned!! ).

In the law, the relationship of a bank to its customer is one of a debtor and creditor relationship with each party to the relationship charged with looking out for its own interests. Sometimes the bank is the creditor and the customer is the debtor (e.g. bank makes a loan to the customer) and sometimes the customer is the creditor and the bank is the debtor (savings account, certificate of deposit).

In the usual and customary banking relationship, there is no fidcuciary relationship. However, there are specific cases in which courts have found that due to particular circumstances, a bank may have a fiduciary relationship with the customer (KUlawJack...look up Brandriet v Norwest on Westlaw for the SD case on that proposition...I am very familiar with that one). If a fiduciary relationship is established, then the bank may owe a higher duty to the customer and the bank may be required in the law to look out for the customer's interests. Banks readily accept acting as a fiduciary in some situations (e.g. when serving as a trustee) but normally when they act as a fidcuciary, they only want to do that we've they've agreed to accept the duties of a fiduciary. In most situations the bank should avoid having a fiduciary relationship but when things go bad, some people will claim the bank had a fiduciary duty to the customer.

Now, the above points are not intended to address whether we think banks are nice etc. But, it's too bad the true relationship is not better understood. People have to take responsibility and watch out for their interests when banking just like they should when they're buying lumber at the lumberyard and groceries at the grocery store. A successful bank provides excellent service to its customers even though there is a debtor and creditor relationship.

Banking relationships become adversarial when one party to the relationship does not do what they agreed to do. For example, borrower fails to make mortgage payments. If someone feels their relationship with their bank is adversarial, quit that bank immediately and go to a different bank.

[SF_Rabbit_Fan]

Re: 79% Interest Rate

I am not so much in disagreemnt with what you say, but I fail to see the folk hero in T Denny that you see. It looks to me all his actions are out of the goodness of himself and for himself and his tax planner, and of course Krafenhoff the health care tycoon.

Don't get me wrong, I don't think he is a folk hero. But people can't look only at the bad and ignore the good he has done. I guess my post looked more at the good and may have sugar coated the bad.