Thanks to @lizweston of Twitter for pointing out this very important article that all debtros need to read. What Does Your Credit-Card Company Know About You?

To understand how the credit-card industry got interested in psychology, you have to go way back, to a time when many Americans didn’t have a credit card, when almost every company charged the same interest rate regardless of a cardholder’s riskiness and when people often paid off their entire balance each month. All the way back, that is, to the 1980s.

Just a little more than two decades ago, the credit-card business was a quiet, slightly boring industry dominated by banks looking for easy revenue. Card issuers made money by collecting annual dues and interest payments from cardholders as well as fees from merchants each time a customer used a card. Then the math whizzes arrived. They emphasized that the biggest profits didn’t come from people who always paid off their bills but rather from less-responsible clients who never paid their entire balance, and thus could be milked through silently skyrocketing interest rates, late fees and other penalties.

It sheds some additional light on how debtors are the widgets in the lab experiment. People take their debt and financial situation emotionally and personally, creditor manipulate those emotions to get people into debt and then to use it to manipulate them on who to pay back.

@GetOutOfDebtGuy

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Read the full article at GetOutOfDebt.org, click here: What You Buy Tells Your Credit Card Company How to Treat You

Lenders are shunning consumers already in debt and cutting credit limits for existing cardholders, especially those who live in areas ravaged by the housing crisis or who work in troubled industries. In some cases, lenders are even reining in credit lines after monitoring cardholders who shop at the same stores as other risky borrowers or who have mortgages from certain companies.

While such changes protect lenders, some can come back to haunt consumers. The result can be a lower credit score, which forces a borrower to pay higher interest rates and makes it harder to obtain loans. A reduced line of credit can also make it harder for consumers to manage their budgets, because lenders have 30 days to notify their customers, and they often wait to do so after taking action.

Indeed it is. If you’re not in top shape for the credit card shakeout that’s already taking place, there isn’t much you’ll be able to do about it. It’s probably already too late. After years of flooding the market with credit cards (and generous limits), banks are finally starting to take it back. Eric Dash, a New York Times reporter, does an excellent job of distilling the situation. From

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Read the rest here: Consumers Feel the Next Crisis: It’s Credit Cards

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Read the full article at GetOutOfDebt.org, click here: Consumers Feel the Next Crisis: It’s Credit Cards

But the most visible stress is on the cardholders, and it’s showing up in headlines, in call-center employees under crushing debt, even in a new Bollywood movie about middle-class people struggling with credit.

Consumer credit, whether cards or car loans, is relatively new to India. Fifteen years ago, even home loans were hard to come by. As regulations on lending were relaxed and India’s urban middle class swelled with 20-somethings hungry for the latest cellphone model, credit expanded to meet the need.

Banks went too far, analysts say, issuing cards indiscriminately to people in rural areas and lower-income groups without regular salaries. The number of credit cards in India, while still only a fraction of the population, has more than tripled in the past five years, to almost 30 million. In the year ended March 31, Indians charged more than $14 billion on their cards, more than three times the amount charged four years earlier.

The amount of unsecured loans and credit-card receivables more than three months overdue is about 7% to 9% of total loans outstanding this year, and is about to head as high as 15%, according to ratings agency Crisil Ltd. in Mumbai.

More people are turning up desperate for help with their credit-card payments, says V.N. Kulkarni, chief counselor at Mumbai’s Abhay Credit Counseling Center, which advises borrowers. Hundreds have been lining up at the center, dumbfounded by their debt and asking the most basic questions.

“They are unaware of the charges, unaware of the interest rates,” Mr. Kulkarni says. “They just take the money because it is freely available.”

It’s tough all over — and not just in the United States. In India, where revolving credit is still relatively new, consumers are struggling under the weight of crushing consumer debt, according to a story in the Wall Street Journal this morning. But it’s not just Indian consumers who are suffering. The banks that handed out this easy money are being hammered as well. Indeed, card companies that

Click Here for totally free debt help, advice and answers.

Read the rest here: New Indian Middle Class Gets Caught In the Whirlwind of Revolving Credit

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Read the full article at GetOutOfDebt.org, click here: New Indian Middle Class Gets Caught In the Whirlwind of Revolving Credit