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View Diary: Obama vs. Usury?  Why Not? (Updated) (251 comments)

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  •  If what you said in that diary about 30% rates (1+ / 0-)
    Recommended by:
    itsbenj

    was true - then why - when late with one card or revolving payment, do they jack up your rates on your card you have been on time with?  The reality is that there is no place to go to get out of the high rates, because you no longer qualify for the best rates, because you missed a payment somewhere along the line -- and they (the CC companies) know that.

    •  Re (0+ / 0-)

      Missing a payment is evidence to the CC company (and hence to all CC companies) that you are a default risk. Many, many statistical studies done by armies of math PhDs that CC companies have working for them have demonstrated this to be true, and the evidence that they have collected suggests that the best possible statistical method of dealing with the problem is to call the loan in by forcing you to pay it down.

      They don't care about you, your problems, or your other creditors, they are just concerned with not being stuck with a default. A CC company would rather that another CC company be stuck with the default (or your car, rent, student loan, etc) than them. That's why all the cards raise their rates, a more-hospitable card doesn't want the risk transferred to their balance sheet.

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