Why do people get credit cards with annual fees?

Since there are so many cards with no annual fee, I don’t understand this. I know that some are for those with poor credit, but I’ve seen cards with average rewards and high annual fees that are rated for those with excellent credit only. What’s the benefit?
Jalen, I think you’re selling something. I’ve seen you give that answer to someone else. I have good credit and I know my score. I just want my question answered.

Freedom is Slavery: our Monetary System and Economic Dictatorship

“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.” (Woodrow Wilson-28th United States President)

What is money? When many of us contemplate this question we picture the government mint printing paper dollars or metallic coins. While this may be partially true, only a small percentage of currency originates at the mint which, contrary to public opinion, is not under the direct control of the federal government. In truth, the majority of money is created by banking institutions without regard for a sustainable economic system. This money is produced every instance a loan, or debt, is made. Money is debt.

How can this be? Let us begin with the goldsmith’s tale. Long ago virtually any commonly agreed upon object could be used as money, such as shells, stones, or even feathers. Gold and Silver, being extremely easy to shape, soon became a widely used standard of trade. After a while, the goldsmiths, who formed coins with the metals, created vaults to store their gold. Consequently, other wealthy townspeople began to request the storage of their own gold in the vault. Once the gold was deposited they received receipts which could be used to withdraw deposits. Due to their convenience, these receipts were traded in the marketplace more often than the gold itself and very few depositors ever came back for their original deposits. This gave the goldsmith, who had a side business in which he lent his own gold, a brilliant idea. He would now lend out his depositor’s gold through receipts and earn an interest on these loans. Once the depositors agreed to this arrangement, the system of banking was born.

“The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it (Galbraith, 15). The process by which banks create money is so simple that the mind is repelled.” (Galbraith, 29)

Now, while this system seems reasonable, it is not the way banking is done today. Due to an increasing demand of credit through European colonial expansion the banker (once goldsmith) began to loan out receipts for gold which in fact did not exist. Say a friend of yours asked you for a pen and you gave them a picture of a pen with an I OWE YOU written on it. Regardless of how ridiculous this seems it is the process by which money is created.

A logical action would be to ban the process, however, the large lines of credit provided by the bank had become integral to European expansion and therefore the act was legalized with a limit. This limit, called a fractional reserve requirement, established a fixed ratio for the amount of currency units that could be created from one unit of currency’s value in gold stored within the vault. Another phrase to represent this system could be legalized counterfeiting, something you or I would be arrested for.

Let us apply this system to modern banking. Approximately 5% of our money is created by the Federal Reserve Bank (paper dollars we are so accustomed to picturing). In the past, the dollar was a receipt exchangeable for a dollar’s worth of gold or silver. Today, the dollar is a digital dollar, a Federal Reserve Note exchangeable only for another digital dollar. In addition to this, as the amount of digital dollars has rapidly increased, the amount of gold backing the system has shrunk to virtually nothing.

The other 95% of our money is bank credit. For example, when John Smith signs for a loan of $50,000, no money is actually lent to him. As soon as he signs the loan document he has pledged to repay the amount of the loan, at which point $50,000 is typed into a computer and created out of no value but that of debt. When most people contemplate a society in which all debts are paid off, they conclude that we would have much more money to spend. Being that money equals debt, if debt equaled $0 money would also equal $0. Under the current monetary system debt is essential to avoid collapse.

“Banks lend by creating credit. They create the means of payment, out of nothing.” (Ralph M. Hawtery-Former Secretary of the British Treasury)

Now that a general understanding of banking has been established, let us examine the interest attached to debt. At one time, usury or making money by having money (interest) was banned as it should be today and not only to an extent (NYS penal codes specify a 25% cap on interest rates). For example, when a bank loans out a principal of $10,000 at 5% interest ($500), $10,000 is created, not lent out. Therefore, banks create only enough money to pay the principal, not the interest. The borrower is required to repay $10,500 despite a loan of only $10,000. On an individual basis this may be acceptable because that additional $500 can be taken from the loan of another. However, on a societal basis, the principal and interest is unable to be paid back by the principal alone. In other words, more debt is owed than money is created to pay it off.

To have a functioning economy under this system, foreclosure rates need to be low. How can this be accomplished? To pay off existing debt a large amount of new debt or money has to be created. But of course this just makes the total debt larger which means more interest must ultimately be paid resulting in an ever-escalating, inescapable cycle of mounting indebtedness. It is only the time lag between the creation of money in loans and its repayment which prevents the overall shortage of money from catching up and bankrupting the entire economic system. Yet, as the amount of debt grows larger, the urgency to repay it increases as well. Could this be the true reason for skyrocketing government spending? The rational person must wonder if this can really go on forever.

Perpetually accelerating growth and sustainability are not compatible. To keep up with exponential economic growth, the real world resources must also be used in an exponential amount. Kenneth Boulding, former president of the American Economics Association, stated that “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” It is only a matter of time before the entire world monetary system comes crashing down around us and our economy and means of survival with it. This could be equated to a depression of unprecedented proportions. What we must also understand is that a depression is not the destruction of wealth but the transfer of wealth from the hands of many to those of a few. Who could gain this wealth you might ask. The answer is bankers.

How can government, corporations, and individual households all be in debt to bankers at the same time and for such astronomical amounts? How is it that bankers, who create nothing of value but representation of debt, have a direct control over each and every one of our lives? To understand this let us look to history.

In 1694, the privately owned central bank, The Bank of England, was chartered and given a monopoly on the printing of currency in Britain and Wales. As we have learned throughout history, a monopoly on any commodity is not beneficial. Lord Acton, the historian and moralist, expressed this opinion on human nature in a letter to Bishop Mandell Creighton in 1887: “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.” Human nature is consumed with power and greed. Therefore, a privately owned central bank in control of a nation’s currency will use all its power to manipulate and exploit in order to obtain the greatest possible profit.

Much of American history has been a power struggle between central banks and democracy, a battle which was recently lost due to the signing of the Federal Reserve Act in 1913 by Woodrow Wilson. If you remember, our journey began with Woodrow Wilson’s famous speech on how he has ruined his country. Hopefully this quote is now understood. Once Woodrow Wilson signed the Federal Reserve Bank into existence, the economic future of our country was handed over to the hands of a quasi-public (80% privately owned, 20% publicly owned) corporation with profit as its main priority.

By now, you may be wondering how it is that a central bank could possibly have all this power. Simply put, they not only create money for the government through the purchasing of bonds (which must be repaid at interest), but also have the power to set fractional reserve requirements and interest rates which control money supply, inflation, banks, and the general economy. While many will be critical of the statement that central banks have total control, let this idea be submitted. When one has power over your mortgage, car payment, employment, buying power of money, and income they have total control.

Now that the problem has been generally identified, we must contemplate methods in which we regain control. First we must ask ourselves 4 questions. Question 1: If government could create all the interest free money it needs, why does it borrow from private banks? Question 2: Why is money created as debt at all? Question 3: How can a system of perpetually accelerating growth be compatible with a sustainable economy? Question 4: What must be changed to rid ourselves of this perpetually accelerating growth?

The answers to the first two questions can be found in basic human nature. He who has money has power, and he who has power will not surrender that power without a fight. Since the system of debt and interest benefit the central banking institutions so well, great lengths have been taken to conceal the bank’s true intentions. Monetary reform is so difficult to achieve due to the enormously powerful interests that benefit from the current system.

The 3rd question can be answered with a simple no. The resources of our planet can not be exploited at an exponential rate, and therefore a monetary system of exponential or perpetually accelerating growth is also unsustainable.

Finally we come to the big question and the one that requires the most thought. First, the government needs to regain control of the printing of currency as well as the regulation of reserve requirements from the Federal Reserve Bank. Second, the United States must withdraw membership from the World Bank and International Monetary Fund (IMF), the current methods used by international banks to consolidate power and wealth. Once these measures are accomplished, the government can begin creating interest free fiat (by government order) currency in the form of either paper notes or electrons, digital money. However, the creation of this currency must be done proportionate to the reduction of the fractional reserve requirements to a 1:1 ratio. In other words, banks will no longer be able to create money out of nothing, but instead will have to loan money they already have.

Once our monetary system has returned to one based on value not debt, such as the previous Tally-Stick, Colonial Scrip, and Greenback systems, we will be able to reduce inflation or deflation through a fiat-population ratio in which data from a national census will be used to determine the amount of money to be in the economy. This will maintain our buying power and economic stability. At the same time, the government’s responsibility must be reduced to law enforcement, national defense (not offense), and money production. These statutes must be established in an iron clad amendment not subjected to change in order to prevent the regaining of control by banking institutions. With all of this interest free money not going into the hands of private bank corporations, the state of our national economy would skyrocket, and a rational system would once again be in practice.

“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. The issuing power should be taken from the banks, and restored to the people to whom it properly belongs.” (Thomas Jefferson-3rd United States President)

I understand that this proposed system may be considered idealistic, and it very well may be, but I can guarantee you that if something to this extent is not undertaken soon our very livelihood will be at stake. What we have been taught to believe is that in a democracy we the people have direct control over our lives. However, under this monetary system, democracy is no different from economic dictatorship through a dependence on bank credit.

How can this proposal be accomplished when political power is isolated in the hands of the wealthy and powerful? Perhaps a revolution of some sort is the answer. It certainly was for the American colonists over 200 years ago, when the Bank of England took control of the colonial monetary system. Regardless of the means by which this goal is reached it needs to be accomplished soon. Our very freedom is at stake.

“Banking was conceived in iniquity and was born in sin. The bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them control money and control credit.” (Josiah Stamp-President of the Bank of England in the 1920’s, the second richest man in Britain)

Reformation of the Church

Over time, the apostate church slowly drifted further and further from the scriptures in organization, in doctrine, and in worship practices. Along with its doctrinal corruption came moral corruption as well. Certainly not everyone condoned these practices. Within the church itself arose courageous reformers who sought to bring the church back into conformity with the scriptures. Among the first of these reformers was John Wycliffe.

John Wycliffe

Born around 1320, John Wycliffe, called the “morning star of the Reformation,” spoke out against the monastic system, the sale of indulgences for the forgiveness of sins and the doctrines of baptismal regeneration and transubstantiation. Furthermore, he rejected the Biblical basis of papal authority and insisted on the primacy of Scripture. Wycliffe is best known for translating the first widespread version of an English Bible. Ultimately he was excommunicated. John Wycliffe died in 1384. In 1415, the Council of Constance, not satisfied with his excommunication and death, ordered Wycliffe’s remains dug up, his bones burned, and the ashes cast into the river Swift which flows through Lutterworth, England.

John Huss

John Huss was born in Bohemia in about 1371. Huss denounced various church abuses, among them the veneration of images and the sale of indulgences. In general he emphasized virtuous living over sacraments. Moreover, Huss held that Church officials ought to exercise spiritual powers only, and not be earthly governors. In 1412, his archbishop excommunicated him for insubordination. He was summoned to the Council of Constance tried, found guilty of teaching that the office of the pope did not exist by Divine command, and burned at the stake on July 6, 1415, even though the Emperor had guaranteed his personal safety even if found guilty.

Martin Luther

Martin Luther (1483-1546) is considered the “father of the Reformation.” In 1517, Luther sparked the Reformation when he nailed 95 theses (objections against the church practice of selling indulgences) on the church door at Wittenberg, Germany. Christ, Luther proclaimed, is the sole mediator between God and man. He denied the supremacy of the pope and believed the scriptures are the church’s sole authority. Luther was excommunicated by Pope Leo X in 1521.

Ulrich Zwingli

Ulrich Zwingli (1484-1531), a leader of the Swiss Reformation, charged in sermons that church teachings and practice had diverged widely from the simple Christianity of the New Testament scriptures. He affirmed scriptural authority. Among the practices cited by Zwingli as unscriptural were the adoration of saints and relics, promises of miraculous cures, and church abuses of the indulgence system. He sought the elimination of both the Mass and confession before a priest. Eventually Zwingli taught that devout Christians have need of neither pope nor church.

William Tyndale

William Tyndale (c.1494 -1536) was an English reformer who strongly believed that the scriptures should be available to everyone and not kept in the hands of the establishment church. He acted on his belief. Tyndale holds the distinction of being the first man to ever print the New Testament in the English language. He was tried for heresy and treason, and convicted. Tyndale was strangled and burnt at the stake in Brussels, Belgium October 6, 1536.

John Calvin

John Calvin (1506-1564), called the “guiding spirit of the Protestant Reformation,” wrote Institutes of the Christian Religion. He agreed with Luther on many of his criticisms of the apostate church. The scriptures, declared Calvin, is the final authority. Calvin’s doctrines may well be the strongest Reformation influence among protestants today. Those who follow his creed are still called “Calvinists.”

Failures of the Reformation

Accepted Departures from Scripture

These were courageous men, dedicated men who were willing to die for what they believed. And some did. Nevertheless, despite their good intentions and admirable courage, these men failed to reform the church’s organization, doctrine, and worship practices to conform with New Testament teachings about the original church of the first century. The reformers fell short in two respects. They accepted without protest several major departures from the scriptures. Among the unquestioned practices were: infant baptism, baptism by sprinkling, and musical instruments in church worship.

Formed New Creeds

Grace Alone

Furthermore, they formed creeds of their own. The apostate church preached salvation by meritorious works. Martin Luther countered with “forgiveness of sin and salvation are effected by God’s grace alone (sola gratia) and are received by faith alone (sola fide) on the part of man”– a teaching in direct conflict with James 2:14: “What good is it, my brothers, if a man claims to have faith but has no deeds? Can such faith save him?” and Jesus’ stated criteria for the final judgment in his “Sheep and Goats” narrative. (Matthew 25:34-36)

Apparently Martin Luther had no intention of establishing another church. After his death, however, his followers created the Lutheran Church based upon Luther’s doctrines.

Hereditary Depravity

John Calvin taught that babies are born with sin inherited from their parents because all the human race fell in Adam’s sin. Ezekiel 18:20 directly contradicts Calvin saying children inherit neither good nor evil from their parents. “The soul who sins is the one who will die. The son will not share the guilt of the father, nor will the father share the guilt of the son. The righteousness of the righteous man will be credited to him, and the wickedness of the wicked will be charged against him.”

Jesus went so far as to say we must become like little children to enter the kingdom of heaven. “I tell you the truth, unless you change and become like little children, you will never enter the kingdom of heaven.” (Matthew 18:3) And, in case anyone missed his point, he restates the message: “Let the little children come to me, and do not hinder them, for the kingdom of heaven belongs to such as these.” (Matthew 19:14)

Do you believe Jesus is saying we should become naive, gullible, and childish like a child? or innocent of sin like a child? The former doesn’t make sense, so we must conclude Jesus is saying children are innocent and are not burdened with sins from their fathers and mothers.

Predestination

Unconditional election — meaning some are predestined for heaven, others for hell is a second cardinal concept of Calvin. What is our situation? Does God arbitrarily and unconditionally bound us for either heaven or hell? or do our actions determine our destination?

Here are the biblical quotes on predestination:

“For those God foreknew he also predestined to be conformed to the likeness of his Son, that he might be the firstborn among many brothers. And those he predestined, he also called; those he called, he also justified; those he justified, he also glorified.” (Romans 8:29-30)

“For he chose us in him before the creation of the world to be holy and blameless in his sight. In love he predestined us to be adopted as his sons through Jesus Christ.” (Ephesians 1:4-5)

“In him we were also chosen, having been predestined according to the plan of him who works out everything in conformity with the purpose of his will.” (Ephesians 1:11)

Here are a few Bible quotes which lead us to believe our actions determine our destination:

“Although he was a son, he learned obedience from what he suffered and, once made perfect, he became the source of eternal salvation for all who obey him.” (Hebrews 5:8-9)

“I now realize how true it is that God does not show favoritism but accepts men from every nation who fear him and do what is right.” (Acts 10:34-35)

“Do you not know that the wicked will not inherit the kingdom of God? Do not be deceived: Neither the sexually immoral nor idolaters nor adulterers nor male prostitutes nor homosexual offenders nor thieves nor the greedy nor drunkards nor slanderers nor swindlers will inherit the kingdom of God.” (1 Corinthians 6:9-10)

“Then the King will say to those on his right, ‘Come, you who are blessed by my Father; take your inheritance, the kingdom prepared for you since the creation of the world. For I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink, I was a stranger and you invited me in, I needed clothes and you clothed me, I was sick and you looked after me, I was in prison and you came to visit me.’” (Matthew 25:34-36)

“Then he will say to those on his left, ‘Depart from me, you who are cursed, into the eternal fire prepared for the devil and his angels. For I was hungry and you gave me nothing to eat, I was thirsty and you gave me nothing to drink, I was a stranger and you did not invite me in, I needed clothes and you did not clothe me, I was sick and in prison and you did not look after me.’” (Matthew 25:41-43)

There are a few problems with predestination. Common sense rejects it. Why should we make the effort to practice Christianity or even decency if we are already predestined to heaven or hell? Eat, drink, and be merry is our only reasonable course.

When you get down to the real nitty-gritty of Calvinism, you find a god who intentionally created most people to burn in hell, without hope, without a prayer for any other outcome. That is their destiny. Isn’t the god of Calvinism the very definition of an evil fiend? Why would anyone want to worship a “god” of that sort?

It may sound strange, but predestination and self-determination are in a way, compatible. How so? Remember, with God there is no past, present, and future — just one eternal Now. He knows the choices each of us will make before we make them. He doesn’t force us to “feed the hungry,” “invite in the stranger,” or “clothe those who need clothing.” He simply sees us doing it. Since God already knows the outcome, our situation may be called “predestined.”

Check the Bible verses for yourself. A careful reading of words of Jesus, Peter, and the writer of Hebrews make one unequivocal point: God allows us to determine our own destiny. Those self-determination statements are very much in agreement with the rest of the scriptures.

Limited Atonement

Calvinists teach Christ died only for the elect.

John 3:16 disagrees: “Whoever believes in him shall not perish but have eternal life.”

Paul adds: “God our Savior, who wants all men to be saved and to come to a knowledge of the truth.” (1 Timothy 2:3-4)

If further clarification is needed: “He is the atoning sacrifice for our sins, and not only for ours but also for the sins of the whole world.” (1 John 2:2)

“Whoever,” “all men,” and “whole world” sounds inclusive, doesn’t it?

Irresistible Grace

John Calvin believed people are totally depraved, so much so that they cannot invite nor reject God’s grace. So God must send his Spirit directly into the hearts of the elect to cause them to believe. However, Romans 10:17 says: Faith comes by hearing the message, not by a direct operation of the Holy Spirit. In the numerous conversions recorded in Acts, the message was always conveyed by preaching. (Acts 2:37,40,41; 11:14; 16:30-34; 18:8)

Perseverance of the Saints

Another basic tenant of Calvinism is: “The elect cannot fall from grace, but will persevere and ultimately be saved regardless how they live.” This doctrine is commonly called: “Once saved, always saved.”

Jesus, Peter, Paul, and the writer of Hebrews all say the opposite.

In explaining the Parable of the Sower, Jesus tells us: “The one who received the seed that fell on rocky places is the man who hears the word and at once receives it with joy. But since he has no root, he lasts only a short time. When trouble or persecution comes because of the word, he quickly falls away.” (Matthew 13:20-21)

Peter: “If they have escaped the corruption of the world by knowing our Lord and Savior Jesus Christ and are again entangled in it and overcome, they are worse off at the end than they were at the beginning. It would have been better for them not to have known the way of righteousness, than to have known it and then to turn their backs on the sacred command that was passed on to them. Of them the proverbs are true: ‘A dog returns to its vomit,’ and, ‘A sow that is washed goes back to her wallowing in the mud.’” (2 Peter 2:20-22)

Paul: “So, if you think you are standing firm, be careful that you don’t fall!” (1 Corinthians 10:12)

Paul: “You who are trying to be justified by law have been alienated from Christ; you have fallen away from grace.” (Galatians 5:4)

The writer of Hebrews: “Therefore, since the promise of entering his rest still stands, let us be careful that none of you be found to have fallen short of it.” (Hebrews 4:1)

The writer of Hebrews: “Let us, therefore, make every effort to enter that rest, so that no one will fall by following their example of disobedience.” (Hebrews 4:11)

The writer of Hebrews: “It is impossible for those who have once been enlightened, who have tasted the heavenly gift, who have shared in the Holy Spirit, who have tasted the goodness of the word of God and the powers of the coming age, if they fall away, to be brought back to repentance, because to their loss they are crucifying the Son of God all over again and subjecting him to public disgrace.” (Hebrews 6:4-6)

Formed New Divisions

The unfortunate result of these reformers was not a return to New testament Christianity as taught by Peter, Paul, John, and James. Instead they gave birth to new divisions or denominations, each with its own creed, confession of faith, organization, and practices.

Jesus prayed for unity among his followers: “I will remain in the world no longer, but they are still in the world, and I am coming to you. Holy Father, protect them by the power of your name—the name you gave me—so that they may be one as we are one.” (John 17:11) Denominations continue to divide Christianity and thwart Jesus’ appeal for unity.

Question to Consider: Do you think a church in the twenty-first century should discard its denominationalism, and become like Christ’s original church in organization, doctrine, and worship practices just as described in the New Testament?

Quote of the Day: “If you believe what you like in the gospels, and reject what you don’t like, it is not the gospel you believe, but yourself.” Saint Augustine (354-430) Christian church father, philosopher, bishop

Note: All Scripture References are taken from the New International Version

Time Magazine Article: A Brief History of Credit Cards-$18 Billion in Fees in 2007!

Credit card companies and their marketing tactics!

Obama Ushers In “Fair and Transparent” Credit Card Regulations

In a sweeping move that aims to provide hundreds of thousands of Americans help with credit card debt, President Obama signed into law last month legislation that will put a stop to credit card companies imposing sudden rate hikes and exorbitant fees and penalties on cardholders.

In the days before the Senate was set to vote on the proposed credit card regulations, Obama, in his weekly radio message, called on Congress to approve the bill, speaking of an urgent need for new credit card legislation to provide financially tapped consumers with some credit debt relief and to help with “clearing away the wreckage of this recession.”

Obama’s radio address followed an earlier report by Fitch Ratings that revealed a record number of consumers were 60 days or more behind on their credit card payments in April (“Fitch: Card Delinquencies Rise; Show Signs of Slowing,” CreditCards.com, May 7, 2009).

“Americans know that they have a responsibility to live within their means and pay what they owe,” the president said. “But they also have a right to not get ripped off by the sudden rate hikes, unfair penalties, and hidden fees that have become all too common to our credit card industry.”

New Credit Card Regulations Offer Debt Relief to Cardholders

The House of Representatives, on April 30, passed its version of a credit card reform bill, dubbed the Credit Cardholders’ Bill of Rights. Among other things, the Credit Cardholders’ Bill of Rights obligates credit card issuers to maintain any introductory “teaser” rates for at least six months and bans retroactive interest-rate increases on a cardholder’s existing credit card balances.

The Senate version of the bill, the Credit Card Accountability, Responsibility, and Disclosure Act, which passed by a vote of 90–5 on May 19, was merged with the House’s Credit Cardholders’ Bill of Rights and signed into law by President Obama on May 22. In addition to the measures proposed by the House, the Senate’s Credit CARD Act offers other consumer protections and debt relief provisions:

A consumer’s payments must be applied to highest interest-rate balances first. If a late payment causes a cardholder’s interest rate to go up, the cardholder will be able to reclaim the lower rate after six months of consecutive on-time payments. Cardholders must consent to have the ability to charge more than their credit limit. If a cardholder doesn’t opt in to allow over-limit spending on her or his credit card, the card issuer may not allow the cardholder to charge more than her or his credit limit and then slap that cardholder with an over-limit penalty fee.

Help With Credit Card Debt in Interest-Rate Controls

Perhaps most notably, credit card companies will now have to provide consumers with 45 days’ notice before raising interest rates or significantly increasing fees — a provision of both the House and Senate versions of the legislation and a particular hot-button issue for consumers and consumer advocates in the past year as credit card rates have skyrocketed, an outgrowth of the attempts by struggling banks to recoup losses from growing numbers of defaulting cardholders.

According to estimates from the Center for Responsible Lending, about 10 million cardholders in the last six months saw their interest rates jump for no apparent reason, with some consumers seeing increases of 10 percentage points or more.

Under the new law, interest-rate increases are prohibited altogether in the first year that a consumer holds a credit card.

Congress also responded to one of Obama’s persistent criticisms that credit card terms and agreements are too abstruse and impenetrable for consumers to easily understand.

“You shouldn’t have to fear that any new credit card is going to come with strings attached, nor should you need a magnifying glass and a reference book to read a credit card application,” Obama said in his radio address. “It is past time for rules that are fair and transparent.”

The Credit CARD Act dictates that cardholder agreements must be written in “plain English” and posted online, and gives guidelines for the kind of language and even the font size that credit card companies may use in explaining their business terms to customers.

The Push for Credit Card Industry Reforms

Although the Federal Reserve had already approved many of these same credit card measures in December in a move to curb abusive credit card practices, the Fed’s rules aren’t scheduled to go into effect until July 2010. Spurred by an ever-expanding number of cardholders defaulting on their credit cards and turning to debt relief options like credit card debt settlement and bankruptcy, consumer groups had been urging the president to continue to push for a credit card reform law that could help struggling cardholders sooner.

And with the new legislation, consumer advocates have gotten their wish: The Credit CARD Act will become effective in February of 2010.

“There is no time for delay,” Obama himself said. “We need a durable and successful flow of credit in our economy, but we can’t tolerate profits that depend on misleading working families. Those days are over.”

Credit Card Industry Urged To Review Practices

Perhaps you have noticed the changes in the credit card offers you have been receiving. For instance, early this year Chase Card Services junked the two-cycle billing practice on their credit cards, where your average daily balance subjected to interest was calculated on the basis of two full cycles instead of only one billing cycle. If you are used to carrying a balance on your credit card, the two-cycle method results in greater finance charges to you, so this change should reduce your interest expenses. This is part of the credit card industry’s response to increasing pressure from consumer groups and U.S. lawmakers for credit card issuers to stop what are called “predatory and abusive practices.”

Last March, Citigroup decided to remove two practices that have been objected to: the increase in a credit card holder’s interest rates and other fees, at the option of the bank, at any time for whatever reason, and the practice known in the industry as “universal default,” which means that if you fail to pay a bill to any of your creditors (say, a mortgage payment or a utility bill) the interest rates on your credit card are immediately increased.

Just recently, in the first week of June, Bank of America and Chase bared comprehensive programs to help customers better understand how the terms and conditions on your credit card account operate in order to enable you to manage your credit cards better. These moves are certainly meant to please holders of credit cards, although the skeptical would see them as moves designed to avert government crackdown.

In response to a swarm of complaints about credit card issuer’s practices, Congress has conducted hearings, and some bills have been introduced in the U.S. Senate and the U.S. House of Representatives, all aimed to stop perceived abuses. Realistically, however, other lawmakers are of the opinion that new laws through which to impose new rules on the credit card industry are not likely to pass this session. Some legislators believe new legislation is not the answer.

The realistic approach to reform may be the changes proposed by the Federal Reserve on credit card advertising, billing practices and updates. One serious proposal will be the first major revision on truth-in-lending guidelines in a quarter of a century. This rule requires of all lenders to give 45 days’ notice on any interest rate increases (the present practice is 15 days) - credit cards included.

The Christian Science Monitor reports that an advocacy group identifies the worst practices among credit card issuers as follows:

· Penalties for late payments or over-limit fees are immediately imposed, even in instances where payment to the credit card account is received just minutes after the specified cut-off time (usually 2 p.m.) on the due date. · Interest rates on credit cards are raised for whatever reason, at any time the bank chooses to. · Payments are applied to those balances on credit cards that are carrying the lower annual percentage rate (APR) and not to the highest. The problem arises from the fact that credit card holders use the same credit cards for purchases, cash advances, and to absorb the balances that have been transferred from other credit cards. These are distinct transactions involving distinct interest rates; for example, cash advances have high interest rates while transferred balances may have zero interest. Since payments made are applied to balances that have the lowest APR, those balances with higher rates continue earning interest and increase at a faster rate.

· Banks use the “trailing interest” method, which refers to interest charged on your outstanding balance between the cutoff date of the last statement and the date your payment is actually posted into your credit card account. This is particularly true for credit cards that don’t have grace periods.

· Absence of an upper limit on fees for balance-transfers by a number of credit card issuers. When you transfer balances from other credit cards, banks typically charge a fee (some waive it, though) of up to 3 percent of the amount transferred, but there used to be a cap of about $50 or $75. Without that cap, if you transfer, say, $5,000 you stand to pay $150 in transfer fees instead of $75 on your credit cards.

Consumer groups view these credit card practices as indications of “gouging.” The credit card industry thinks these restrictions serve to guide consumer behavior with respect to the use of credit cards and have also made it possible for them to enjoy the many advantages of modern credit cards - which include no annual fees and average APRs that are lower than the prevailing rates of twenty years ago. In addition, credit card lending is now enjoyed by many more people whereas years ago only a privileged few could be approved for credit cards.

For you as a credit card holder, what will this all mean?

For now, if you have some issues that you’d like to take up with your credit card issuer it may be the perfect time to discuss those issues while they are under the microscope. They’ll be more likely to respond favorably. For instance, if you feel you’re paying too high an interest rate and you have a good credit score, this may be a good time to request a lower rate from you’re the issuers of your credit cards. Chances are that they’ll be more inclined to grant such concessions.

There are some things that the credit card holder should realize, as a business partner in the credit card industry. On the matter of universal default, for instance, this is actually a means which helps the credit card issuers minimize having to penalize good paying customers for the undesirable credit behavior of other holders of credit cards.

In the past, everybody paid the same rates on their credit cards, regardless of whether you had very good credit or a poor one. Because of improvements in credit scoring, the industry learned to measure credit risk and became better able to evaluate the probability of an account going sour. The credit card issuer now knows that some accounts have two times more risk than others. And its pricing follows that observation. It’s no different from a mortgage: if you’re a riskier mortgage borrower, you get a higher rate.

A credit card is revolving credit, and it is as if your loan is being renewed every time. You make payments on your balances, you borrow once more. When you decide not to pay one of your credit cards, you immediately make yourself a riskier debtor. It is for that reason that when the credit card issuer “renews your loan” for the following month, the issuer may increase interest rates, as already stipulated in the terms and condition of the Credit Card Agreement.

This is exactly the same kind of term that governs corporate lending, in small business lending, or for businesses in general. There is always a cross-default clause in all loan agreements where the terms state that the bank will monitor all of the borrower’s debts, and if the borrower goes sour on anything, the lender can demand immediate payment or changes in terms, including interest rate. But it is only the borrower concerned that gets penalized, not all other borrowers. It is risk-based pricing and it adjusts to take into account the overall financial conduct of the specific borrower.

This also gives - or should give - the credit card holders the necessary inducement to be more conscious of managing their credit cards in a responsible manner. They should become more conscious of their credit score, of their credit history … and more conscious of the fact that whilst they may have five creditors and ten credit cards, there is one number that summarizes their creditworthiness. If the credit card holder manages that number well, the benefits of good credit will be his.

An American Universal Health Care System

Health Care System Needs Reform, Not a Government Takeover

Believe it or not, America boasts some of the world’s best doctors, the most advanced health care system, and the most technically superior resources in the world, bar none. Those who travel globally and have gotten sick know that their first choice for treatment would be in the U.S. Though heatlh care in America is, more expensive thanany other country, many of the worlds wealthiest come to the U.S for surgical procedures and complex care, because it holds a worldwide reputation for the gold standard in health care.

To examine the complex health care issue, a small research study was conducted from randomly selected doctors in mdnationwide.org’s best doctors database. We ask 50 top doctors, located in different states and who practice different specialty fields, ” Is a universal health care plan good for America?” Forty-eight of these doctors essentially responded that it was a “bad idea” that would have negative mpacts on the quality of our nation’s health care.

Social Engineering Your Health Care

One of the greatest mis-conceptions some people have relied on with regard to the health care debate is that, given a universal health care system, every person in the U.S. would receive the highest quality health care - the kind our nation is renowned for and that we currently receive. However, unlike some public amenities, health care is not a collective public service like police and fire protection services, therefore the Government cannot provide the same quality of health care to everyone, because not all physicians are equally good orthopaedic surgeons, internists, neurosurgeons, etc, in the same way that not all individuals in need of health care are equally good patients.

As an analogy - stay with me - when you design a software program, there are many elements that are coded on the back-end, and used to manipulate certain aspects of the software program, that your average “John Doe” who uses the software(the end user) does not understand or utilize, nor do they care about these elements. Certain aspects of the program are coded, so that when one uses that portion of the program, other elements of the program are manipulated and automatically follow the present or next command.

Likewise, once a universal health care plan is implemented in America and its massive infrastructure is shaped, private insurance companies will slowly disappear, and as a result, eventually patients will automatically be forced to utilize the government’s universal health care plan. As part of such a system, patients will be known as numbers rather than patients, because such a massive government program would provide compensation incentive based on care provided, patients would become “numbers,” rather than “patients.”

In addition, for cost savings reasons, every bit of health information, including your own, will be analyzed, and stored by the Government. What are the consequences? If you’re a senior citizen and need a kneereplacement at the age of 70, the government may determine that you’re to old and it’s not worth the investment cost, therefore instead of surgery, you may be given medication for the rest of your life at a substantial cost savings to the government, and at a high quality of life price to you.

Solutions:

Fixing the current U.S. health care system might require that we;

1. Encourage prevention and early diagnosis of chronic conditions and management.

2. Completely reform existing government health care programs, including Medicare and Medicaid.

3. Forgive medical school debt for those willing to practice primary care in under-served areas.

4. Improve access to care, provide small businesses and the self-employed with tax credits, not penalties for providing health care.

5. Encourage innovation in medical records management to reduce costs.

6. Require tort reform in medical malpractice judgments to lower the cost of providing care.

7. Keep what isn’t broken-research shows 80% of Americans are happy with their current insurance, therefore, why completely dismantle it?

8. Reimburse physicians for their services.

9. Innovate a system in which Medicare fraud is dramatically decreased.

Devil In the Details

Socialized medicine means:

1. Loss of private practice options, reduced pay for physicians, overwhelming numbers of patients, and increasing burn-out may reduce the number of doctors pursuing the profession.

2. Patient confidentiality will need to be compromised, since centralized health care information will be maintained by the government and it’s databases.

3. Healthy people who take care of themselves will pay for the burden of those with unhealthy lifestyles, such as those who smoke, are obese, etc.

4. Patients lose the incentive to stay healthy or aren’t likely to take efforts to curb their prescription drug costs because health care is free and the system can easily be abused.

5. The U.S. Government will need to call the shots about important health decisions dictating what procedures are best for you, rather than those decisions being made by your doctor(s), which will result in poor individualized patient care.

6. Tax rates will rise substantially-universal health care is not free since citizens are required to pay for it in the form of taxes.

7. Your freedom of choice will be restricted as to which doctor is best for you and your family.

8. Like all public programs, government bureaucracy, even in the form of health care, does not promote healthy competition that reduces costs based on demand. What’s more, accountability is limited to the budgetary resources available to police such a system.

9. Medicare is subsidized by private insurers to the tune of billions of dollars, therefore if you take them out of the equation, add a trillion dollars or more to the current trillion dollar- plus cost estimates.

10. Currently, the government loses an estimated $ 30 billion a year due to Medicare fraud. Therefore, what makes anyone think that this same government will be able to run &operate a universal health care system that is resistant to fraud and save money while doing so?.

What are the highest limit credit cards available with a 650 FICO?

Where do you apply for such cards? I haven’t applied for a new credit card in probably 15+ yrs.

Credit Cards 02

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Credit Cards 01

Corporate Credit Funding business credit cards small business credit NO PG

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Credit Card Reform Bill

Credit Card Reform Act of 2009