The Democratic Candidates and Your Credit Cards

Harry and April, great points!

I don't want to get into Hillary bashing, but I simply don't see how her plan changes anything. The first point in Obama's plan "Create a five-star rating system for credit cards so consumers have a better sense of the fees and rates associated with each card. Card companies would have to display their star ratings with their application materials" doesn't seem like much, but it would arm consumers with knowledge, which is power.

For those of you who are convinced Obama has nothing to offer, if you haven't already, check out his Blueprint for Change on his website. You just might see him differently.

I think one thing we all need to be aware of is that, when we want to know the specifics of a candidate's platform, we need to do the research ourselves. We won't get much from TV media, so we need to do the research ourselves. Just-the-facts blog entries like this one are an ideal way to get a snapshot of what a candidate wants to accomplish.

Angie of TX @ Feb 15, 2008 21:27:52 PM

Mandated Health Insurance

One more thing to my earlier comment.

I wonder what would happen to all those individuals that the health insurance company have termed uninsurable because of existing illness.

If health insurance is mandated, those people would still fall thru the crack, because the cost to insure them will be too high. Even with subsidy, it will not be affordable.

Mandated health insurace is and will remain a very bad idea!

Edward of IL @ Feb 15, 2008 21:19:13 PM

Mandating Health insurance isn't a good idea.

JoAnne of Az,

Hillary's plan would have probably make the cut if she hadn't mandated it. But she did, and that took away the incentive to lower cost. Since it would be a requirement, all that the heathcare provider/insurance companies would say is, give them subsidies to offset the high cost. People still won't be able to afford it because the cost will continue to grow.

What is Hillary considering? Tax break for employees to subsidize the high cost. Let say IRS lowers your Total income by $1200 for a $12,000 a year insurance, when your out of pcket cost cost including your deductible is around $7400. You do the math. That will not get you anywhere.

Let's consider what mandate means.

Take auto insurance for example. Most states in the union mandated auto insurance, and state of IL being one. The insurance companies raised the premium by over 40% within first two years after the law was enacted. That was a little over 12 years ago. Since then, the premium has continued to climb and there is nothing anyone could do stop it. There is no reason to lower the cost, but there is always a reason to raise it.

What I pay for insurance today is almost half the car note, even with all the breaks I get, compared to before the mandate.

This is simple. It is the law of supply and demand. The more people want or need it, the higher the cost. It applies to auto insurance, it applies to gas and fuel, and it will apply to health insurance. No matter how palatable this idea may be, the historical data for mandates shows higher cost in relationship to the demand.

She cannot pass a law to cap the cost since that will intere with free market. Besides, the republican won't let her even if she tries.

Mandating Health insurance is a very bad idea.

Edward of IL @ Feb 15, 2008 18:54:01 PM

credit card via health care cost

Off topic--this is health care, not credit cards--but one way we pay huge medical bills is through our plastic. This double whammy could be avoided with a sane national health approach. Isn't it odd how careful budgeting and serious saving can be wiped out without insurance for illness/death? That low initial interest card reserve is often a cross-your-fingers-and hope-for-the-best. And the house may be the next collateral.

I'm a believer in the law of large numbers: Hillary's plan REQUIRES all the healthy AND ailing to be in the pile, thus everyone's cost is averaged. Expense will be lower if we all work at staying healthy in this country, as well. Early diagnosis and preventive measures will save dollars.

When businesses don't set rates based on poor health, competitive bids are more reasonable, so we all win. The sickest few, some eligible for public care only when all their resources are exhausted, are often served at the local level--reimbursed through higher fees, and through taxes you pay.

A national medical care plan must require that dollars allocated for it, be used for it. Current doctors will participate unless they are not able to work for the negotiated price. You would still be free to seek your own (just like the oil sheiks who used to come to the U.S. for medical care); unlike them, you would have paid, and would continue to pay averaged insurance premiums, with government help if needed.

Excellent health care providers in many other countries have created a competitve marketplace. However, when a teacher in the United States has students who hold bake sales to pay for her breast cancer treatment after her coverage runs out, ask yourself who's to blame? Your lawmakers? "Greedy" insurance companies?? Those healthy people who don't, or can't, afford insurance to average out the cost?? The dishonest political deal makers who have THEIR "socialized medicine" paid directly by YOUR taxes??

When the plan for all of us is enacted, we must safeguard it from greed and abuse. Remove elected legislators who use the funds for other purposes--or better, give them jail time and real public service sentences if this national trust for a United States of America health plan is not managed honestly. Note the history of funds that are shuffled when not instantly spent: for a capitalist economy, raiding reserves and profligate spending are neither liberal nor conservative--merely dishonest.

I remember the outrage when "wife-of" President Bill Clinton was asked to work to design a health care plan for all, that had never before existed; scare tactics and irrelevant attacks were launched. Her approach was to call together representatives from all the related fields: caregivers, insurers, medical facilities, legislators, and the public. Before any progress could begin, outcry against that pushy female prevented any fair appraisal. Quietly and effectively, she has continued to work and learn and seek your input and help.

Ask yourself whether you've done your homework before you oppose or support any issue. Go to the source; watch the Congressional hearings; and study how plans work in other countries, compared to what happens in the U.S.

Consider what you will do--with the unique abilities and capabilities you have--when major illness strikes, or your employer simply can't afford to support your medical plan any longer (and you can't, either)?

And how do you feel when one of the millions of government employees in this country receives instant and excellent care that you or your dependents can't afford? Do you shake your head philosophically, and say, "Well, that's just the American way!"

Or will you look at history, and realize that it's royalty's way...where those born to privilege, or serving it, are presumably God's chosen few, and the choicest of necessities and desirable things are to be provided to them--by you.

I believe the candidate best qualified to protect our values, and to revise conditions that harm and contradict our expressed ideals is running in a pivotal election. Why would you choose an older guy, or the nice kid, when you have someone who has lived public service and dealt with domestic upheaval, with outstanding success on both fronts? Toughness in withstanding scrutiny is equalled by her skill in meeting complex challenges.

JoAnne McCarthy of AZ @ Feb 15, 2008 17:28:21 PM

Hifalutin "plans" vs. Getting to the Point

In response to Sydney and her insistence that Hilary has "plans":

1. Cap credit card interest rates at 30 percent. (The Government Accountability Office reports that 1 in 4 credit cards charges higher rates.)

Like Harry said, if you have interest rates that high, it's because you messed up. I'm fairly new to the credit game and have never received an initial offer higher than 22%.

2. Stop credit card companies from increasing rates without written consent from consumers and prevent rate increases because of missed payments on unrelated accounts.

I agree with the part concerning unrelated accounts, but written consent? She must mean written notification which companies already do. Who in their right mind would "consent" or agree to a higher rate?

What if I don't agree to the higher rate? I'm pretty sure the companies will be able to penalize me in some way.

These are the only concrete measures of Hilary's "plan."

3. Require card companies to explain terms and fees clearly to consumers.

Credit companies already explain terms and fees. Whether or not they do so clearly depends on the person. I'm only 22 and I understand exactly what my creditors expect from me.

4. Increase government regulation of credit cards and other credit products through the creation of a Financial Product Safety Commission.

Come on, a "Financial Product Safety Commission"? This is Hil's version of empty rhetoric. She just attaches a fancy name to it so it sounds legitimate.

With Obama:

1) Create a five-star rating system for credit cards so consumers have a better sense of the fees and rates associated with each card. Card companies would have to display their star ratings with their application materials.

I have to agree with Harry on this one. A star rating system would be an easy way to help consumers who already don't understand credit cards. We use star rating systems on everything else. If you're on Amazon, do you buy from the guy with 1 star or 4 stars? If I get an offer with 2 stars and another with 4, the two star will definitely meet the paper shredder.

2) Write a credit card "bill of rights" that would stop credit card companies from making "unilateral" changes to the terms of cards as well as apply interest rate increases only to future debt. It would also stop card companies from charging interest on fees, something the Clinton plan includes as well.

"Bill of Rights" vs. "Financial Product Safety Commission". One may sound a little smarter cause it uses more words...but they seem to want to accomplish the same thing to me.

Applying the changes to future debt is the only fair way. You have a choice to decide whether or not you want to spend and be subject to those rates. When you built up your existing balance, you built it under those rules and made your spending decision based on that information and that's what you should be held accountable for.

April of AL @ Feb 15, 2008 16:46:23 PM

Democrates for the win

Dear Hilliary, Obama,

Thank you for bailing me out of the house I can't pay for. And thank you for forgiving the credit cards I can't pay for. Also thank you for the free health care I'm sure that will come in handy. I am leaning my vote for you but Obama is giving out the same things so I'm torn. I'm trying to think of my other problems but it is taking me some time because your programs are pretty comprehensive and cover all my big ones.

I guess I'm concerned with social security. See I'm not going to be able to collect it for another 30 years and by that time there is going to be nothing left. I can charge most things on my credit card but I do need cash for the little stuff. If you can lower the requirement age by some 30 years that will be perfect and I will so vote for you.

Hillary for God.

American Dream of NY @ Feb 15, 2008 16:23:45 PM

Let's scrutinize whose plan helps us most than the other

I am not sure how many of you ever applied for a credit card, but the plan that’s proposed by Hillary are a bit hard to digest. Let's scrutinize it a bit, shall we?

1. Cap credit card interest rates at 30 percent. (The Government Accountability Office reports that 1 in 4 credit cards charges higher rates.) - I have never ever saw a credit card that has an APR close 30%, but this rates only come into picture on anyone's credit card bill when they default their payments, i.e., miss their payments. And secondly, if you can’t afford or maintain to pay your debts on time then whose problem is that, yours or the credit card company? So this point has no impact on whatsoever on larger section of the population that pays their debt on time.

2. Stop credit card companies from increasing rates without written consent from consumers and prevent rate increases because of missed payments on unrelated accounts: As I mentioned above the way APR works in current economy, there’s nothing a consumer can do about it. Although according to the credit card agreement, you have been receiving all the updated related to your change in your agreements. So if you need a letter to sign and sent back with your consent on the increased charges, then yeah! You should get a letter from all your credit card companies. Again this kind of agreement is already in place today, so I’m not sure what exactly we are trying to change with this plan.

3. Require card companies to explain terms and fees clearly to consumers: Has no one ever received any letter from their credit card company over the change in agreement terms??

4. Increase government regulation of credit cards and other credit products through the creation of a Financial Product Safety Commission: Ha ha !! Another way of fooling the masses during election year by coming up with some kind of idea to build a commission or committee that works under the shadow of corporate executives or lobbyist and has no transparency of whatsoever to ordinary junta.

Now about Obama’s plan:

1. Create a five-star rating system for credit cards so consumers have a better sense of the fees and rates associated with each card. Card companies would have to display their star ratings with their application materials: This seems to make life bit simple for all those who have no knowledge of how credit card APR works, and I gotta tell ya, this would more helpful to a lager section of the population, who don’t understand the math behind these credit card APRs.

2. Write a credit card "bill of rights" that would stop credit card companies from making "unilateral" changes to the terms of cards as well as apply interest rate increases only to future debt. It would also stop card companies from charging interest on fees: well this is something new compare to what we have currently on all credit card agreements. As the sudden changes on credit card terms would only affect the future debt but not the ones that present today. In a way, what this means is, your credit card will only charge the new APR on your new purchases rather than your current balance. This way it makes you alert to curb your expenses and try to pay-off your debts.

I hope this makes sense to all who blindly follow any political candidate without scrutinizing their policy plans.

Cheers!!

Harry of @ Feb 15, 2008 15:41:02 PM

credit cards plans

The plans of both candidates have faults.

Take Clinton's for example, 30 percent is ridicoulously high rate. And why would anyone agree to that high limit.

$1000 credit card loan @ 27% interest will take you closer to 30 years to pay off if you are paying the minimum. That is not considering the 30% rate. Is she kidding me? Also, as soon as you make that into law, you will give the credit card companies ammunition to charge the high rate. why? Because they can according to the law.

Another thing, as far as getting the consumer to agree, that would be specified in that small print that nobody bothers to read. And then what? Consumer would be trapped.

And the rest of her proposal, more of the same - Bureaucratic at best.

As for Obama's plan, all well and good but he need's to think a little deeper. 5 star rating won't mean a thing as far as these banks are concerned.

The offer can start at 5 stars, and be changed to one start after 30 days; And then what?

The one thing that I thing would help consumer is stopping the banks from assesing the ridicoulously high interest rate on existing balance, including the late fee and other fees.

@Harry of NJ,

Your comment about Barrack lacks some merrit. If you are so keen on experience, look at GW. What happened to him with all of the experience he hard as the Governor of TX? Look at all of these experience congressmen and senators that have demostrated extremely poor judgement on the affairs of the state, with absolutely no consideration for the people that elected them.

Also, Obama has been working with people for about 27 years. His resume is impeccable. In Illinois, he's admired for his ability to stay focused on issues that concerns the people of Illinois. And best one of all is willingness to reach out to Republicans to get bills passed. That is one of the reason that even Republicans in Illinois voted for him. That is the experience that matters my friend.

Edward of IL @ Feb 15, 2008 15:24:12 PM