more on the evils of personal credit card use..

[alwayscurious]

I read and digested this article with great sadness..

http://www.theaustralian.news.com.au/common/story_page/0,5744,17584050%255E601,00.html

Heave sigh.

It's not the fact that the targets are black, white, yellow or whatever.. It's sad that credit company would be targetting work for the dole employees with Gold Credit Cards.

The company wouldn't care. They are out to make a profit.
They will still get their money, if the person doesn't pay - they just sell the debt to someone else - like GE Money. GE money then viciously pursues the original spender, often ending in bankruptcy.

Makes me sad really. I've known people on the indebted end, and I've known people who work in the debt collection end. Not many happy stories come from those places.

Comments anyone?

[Les]

G'day AC,

Agree!! It's a sad day when things like this happen. Thanks for including the article
One who has been issued a gold Amex, which advertises a maximum available credit limit of up to $50,000, is Hopevale single father of two Wesley Pearson, a cabinet-maker of 17 years' experience who earns just above the minimum wage of $492 for a 40-hour week. "I work on CDEP (work for the dole) at Hopevale and earn $540 a week," he said.
Sheesh, I've retyped an answer THREE TIMES to this one !! At first, it was "Shock, horror" for issuing such a card to Wesley (based on his lower-than-average wage).

Then, I thought it might be all "spin" (by quoting the "available credit to $50k on a Gold Card"). I wondered if there might be different layers of "Gold cards" (e.g. Gold with Maximum of $5k)

Third, I vaguely remembered some of the offers made to me - and promptly rejected the previous thought. AS I UNDERSTAND IT, if one has a Gold Card, one HAS an available maximum credit limit similar to all other Gold Card holders !!!! And if $50k is it, then that's how deep a hole you can dig for yourself - despite your take-home pay (???)

"I was given the offer through the post and applied for the card and got it, but I have not used it yet because nobody in Cooktown takes Amex."
Can't blame you, Wesley, for having a smile on your face - it all seems "too good to be true" I bet. Thank heaven for some commonsense from the business people of Cooktown.

Queensland Fair Trading Minister Margaret Keech said she was outraged at reports of credit providers targeting indigenous communities.

"I am particularly disgusted about this given there appears to have been no assessments made as to whether the people getting the credit can afford to service their debts," she said.
Keep saying it, Margaret - you've got my vote !!!

A spokesperson for American Express said proper credit and work checks were always made and said people earning a minimum $16,000 a year were eligible to get a credit card.
With what kind of limit?? Nearly two years take-home wage? Sheesh, I sincerely hope NOT !!! Would a $16k per year person be eligible for a Gold card?

"At Hopevale, fewer than 10 have been issued and the credit limits are $1500 to $2000," she said. "We have done the credit checks, which they have passed."
Hmmm! Don't overly like it, but a max. figure like that is at least reasonable. But hardly fits with Gold Card $50k max. as mentioned earlier...

I wonder where THE TRUTH is??

Regards,

[alwayscurious]

Yes this article disgusted me initially.

As a matter of fact, it still does.

Les, Thanks for your thoughts.

Knowing people who get into financial hot water (read HOT, water), I feel the happy advance of the banks & payday lenders etc, sickens me.

cash converters ads make me spew also. Poor sod loses job, got no money to pay bills, I KNOW! I'll hock the wife's wedding ring, and cash converters are happy to oblige. In fact, you don't need to hock anything except your soul, sir.. just sign here, and here, and have a glass of water, sign here and BINGO you're in our hands now..

Cheers.

[Bantam Roosta]

Les,

I have a Gold Card with a limit of $10k. When they say maximum limit from what I can understand that is the maximum limit that the card can physically go to, not necessarily what it actually is at a certain point in time. I know the maximum limit on my card (CBA) is $20k, but I can't spend that much now as my current limit is set to 10k.

BR

[Les]

Thanks, BR,

I've received a few of these over the years, but have not paid over-much attention to the various limits at the time (they hit the bin pretty quick...).
Then, I thought it might be all "spin" (by quoting the "available credit to $50k on a Gold Card"). I wondered if there might be different layers of "Gold cards" (e.g. Gold with Maximum of $5k)
So, based on your reply, BR, perhaps it's possible that a Gold Card could have a maximum limit of $2000 (?) Do you know ?? Can you enlighten us further??

I do understand if you can't answer this, BR - so don't get too concerned. As I said, I can't remember a damn thing about AMEX, so I'm going with the thread as it is.

Regards,

[lizzie]

i and hubby would probably get a new credit card offer in the mail at least once to twice a week. because i do not want or need these cards (i already have the few i want) the offers get torn up and immediately thrown in the bin ...

however, how tempting they would be to someone with cashflow problems, who cannot manage money and gives no long term thought to how they are going to pay them back.

very scary

[Simon]

I reckon unsolicited credit applications should be legislated against. The sort of people who take credit without planning for it are often the people who least need to have more debt.

[keithj]

i and hubby would probably get a new credit card offer in the mail at least once to twice a week. because i do not want or need these cards (i already have the few i want) the offers get torn up and immediately thrown in the bin ....I too get CC offers regularly - a few with 0% balance transfers for 6 months. Has anyone considered using these as revolving lines of free credit? Would it affect future servicability with lots of credit applications on Baycorp even if they are cancelled after the interest free period expires?

[DavidMc]

I reckon unsolicited credit applications should be legislated against. The sort of people who take credit without planning for it are often the people who least need to have more debt.

I couldn't have said it better myself Simon. It's a bit ridiculous the number of advertising messages we are bombarded with every day. Yes, I know we 'can just ignore them' but the thing is these messages are specifically designed to attract our attention and invoke our fears to create a desire for these products or services.

I've studied some marketing at Uni and our consumer behaviour class was a year 1 psych unit the targetting was that 'scientific'. This style of advertising puts us in a constant state of wanting more - no wonder we're unhappy...

If we want to see our credit options, we'll go searching for it ourselves thanks.

[Bargain Hunter]

A spokesperson for American Express said proper credit and work checks were always made and said people earning a minimum $16,000 a year were eligible to get a credit card.

"At Hopevale, fewer than 10 have been issued and the credit limits are $1500 to $2000," she said. "We have done the credit checks, which they have passed."


This is at the end of the article. So although the limit is 50k on a gold card, these particular people are limited to 2k.

I do remember losing my job and starting my own business on a shoe string. At the time I had a limit of $500 on my credit card and got an order from a local council for about $2,500 of gear. I needed $300 more than I had available to pay my suppliers so asked the bank to increase my credit card limit to cover the shortfall.

It was painful getting the credit even with a bonafide order from council (I was given the extra credit but made to feel like a dog and told never to come asking for more credit again). :mad: We had also paid out our home loan with them some months before so had few outgoings.

Within twelve months they had increased my credit card to 5k. No proof of ability to pay just a mail out, sign here please. I still cannot figure out banks. :confused:

Regards

Andrew

[michaelg]

Hi,

AMEX Gold use to have a minimum requirement of $50,000+ annual income. I guess that no longer applies.

Michael G

[Bantam Roosta]

I can only speak about CBA as I have both my CC's through them, although rules may have changed since then.

There are different types of cards (green, gold, platinum) and each one has a different range of limits. I can't remember exact figures but the green is approx 1k - 10k. Gold is minimum 5k max 20k and platinum is higher still. So for CBA, to get a Gold card the minimum limit would be 5k. I'm not sure how they work out what your max limit is, but I just filled out the form, asked for 10k and my card came in the mail.

Other banks may well have lower minimums then CBA's.

BR

[sbe]

keithj,

Credit cards decrease your servicability, so many cards would decrease it A LOT.
They (typically) count minimum payment based on all cards being maxed out, and take that off your servicability.

Regards

Simon.

[sbe]

Hi all.

We all get these offers from time to time.

Here's a question....

Where does the Banks responsiblity end, and personal responsibility start?

For example, the bank tries to generate business, and mass mails a target area. If people in that area take up the offer, whose responsibility is that (assuming normal credit criteria are followed)?

How many times do people conceal their other cards / debts from the application?

Whose responsibility is it to know if YOU can really repay the loan??

No bank would give a $50,000 card to someone earning $16,000 if that's how the application was filled out. They do lose money. They pay the merchant $50,000 worth, sell the debt for $5,000. That'd be a good $45,000 odd loss. That's a good way to go out of business......

However, cards (as pointed out) can have differing levels of limit. A Gold card could be $5,000 or $20,000 limit. That story didn't tell you the limit he had on the card.

Interestingly:
* It's a Credit Card (variable repayment), not Charge Card (Pay in full) like a typical AMEX
* To get a Gold Credit card (like he had) the minimum income is $40,000pa. So either he lied on the application, the reported income is incorrect, or Amex relaxed the rules (they'd give him a blue card instead I imagine).

Also from the story.....
Here's another question. If a bank decides based on your application that you qualify for a card, and you personally applied for it, so you feel you can too (or you're pretty silly), how would you feel if the store declined your card because they felt in their opinion you can't afford it?

Not particularly in-depth well investigated journalism.... More like what I'd expect of Today Tonight....


Cheerio

Simon.