Comments on: Is Consumer Debt a Good Thing? http://masteryourcard.com/blog/2008/10/20/is-consumer-debt-a-good-thing/ The best Credit Card Debt Blog online Thu, 02 Feb 2012 13:31:13 +1100 http://wordpress.org/?v=abc hourly 1 By: Bankruptcy and Debt Carnival 8. The Action Continues. http://masteryourcard.com/blog/2008/10/20/is-consumer-debt-a-good-thing/comment-page-1/#comment-8039 Bankruptcy and Debt Carnival 8. The Action Continues. Mon, 27 Oct 2008 16:37:20 +0000 http://masteryourcard.com/blog/2008/10/20/is-consumer-debt-a-good-thing/#comment-8039 [...] Your Card presents Is Consumer Debt a Good Thing? posted at Master Your Card, saying, “Best of luck with the Carnie this [...] [...] Your Card presents Is Consumer Debt a Good Thing? posted at Master Your Card, saying, “Best of luck with the Carnie this [...]

]]> By: Tom Selleck http://masteryourcard.com/blog/2008/10/20/is-consumer-debt-a-good-thing/comment-page-1/#comment-7813 Tom Selleck Tue, 21 Oct 2008 05:50:12 +0000 http://masteryourcard.com/blog/2008/10/20/is-consumer-debt-a-good-thing/#comment-7813 Postrel is wrong on the payday issues on two fronts. 1) Payday lenders are required to post all fees up front and in an APR, even though these loans last about two weeks. A consumer know exactly what they will pay with a payday loan. Credit cards often add hidden fees, increase APRs, and allow consumers to spend over the limit. Those things are forbidden by federal law on payday loans. 2) Credit cards create a real cycle of debt. Consumers are only "forced" to pay 2 to 5% of the amount they borrowed each month. At that rate, a credit card could take ten to thirty years to be paid in full. Payday loans are limited by all states to be paid off within two weeks to four months. This really limits the chance that a consumer will be found in a cycle of debt with a payday loan. Regardless of what form of credit consumers choose to use (payday or credit cards) that choice should remain in the hands of the consumer and not in the paternalistic hands of government officials. Postrel is wrong on the payday issues on two fronts. 1) Payday lenders are required to post all fees up front and in an APR, even though these loans last about two weeks. A consumer know exactly what they will pay with a payday loan. Credit cards often add hidden fees, increase APRs, and allow consumers to spend over the limit. Those things are forbidden by federal law on payday loans.
2) Credit cards create a real cycle of debt. Consumers are only “forced” to pay 2 to 5% of the amount they borrowed each month. At that rate, a credit card could take ten to thirty years to be paid in full. Payday loans are limited by all states to be paid off within two weeks to four months. This really limits the chance that a consumer will be found in a cycle of debt with a payday loan.

Regardless of what form of credit consumers choose to use (payday or credit cards) that choice should remain in the hands of the consumer and not in the paternalistic hands of government officials.

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