General Chat

Cannot find the thread where I made the suggestion that any interest rates over 10% at current time when Bank base rate in only half a per cent is USURY ie ripping off borowers and making their life absolute hell.

In Mirror last Thursady (22nd Nov), Penman and Sommerlad reviewd world-wide interest rates. Here are some figures they gave:

Japan - interest rates capped at 20%
Australia - rates on small loans capped at 20% upfront and 4% a month.
India - rates on small loans capped at 26%
Greece - non-bank loans limited to 6.75%
Italy - capped at 1.5 times market average (22% maximum currently)
Canada - some states capped. Manitoba 17%, Ontario 21%
USA - rates capped in 35 states eg Florida 10%
Holland - 15%
Germany - 17%
UAE - 18%
UK - no cap. Annual interest rates can top 4,000%

Conclusion in article: "this map should shame the Government and financial regulators who have left hard-up British families easy prey for the world's legal loan sharks".

I think this is a horror story waiting to unfold for many families - some of them very close to us.

I just cannot believe that anyone would be foolish enough to take on a loan saddled with that amount of interest...however hard up they were.

I had read an article a couple of days ago, can't find it but this is similar: I have edited out the URL.

Unarranged Overdraft Charges V’s Wonga.com

Everyone knows that banks charge fees when your account is overdrawn. That’s no secret. And it’s also no secret that many people are forced to overdraw their bank account balance, especially when they are in need of money. Robbing Peter to pay Paul, right?

They intentionally withdraw more money than they have in their account to pay a bill, knowing that they will be able to replace the money and pay the fees within a few days. But what many don’t realize is that taking out a Wonga loan is much cheaper in the end! Let’s compare some major banks to Wonga:

BARCLAY’S: If your account is overdrawn by £1 or more, you are charged a £6 per day fee.
Example: £1 overdrawn for 10 days = £60 in fees.


SANTANDER: If your account is overdrawn by £12, you are charged a £5 per day fee.
Example: £12 overdrawn for 10 days = £50 in fees.

HSBC: If your account is overdrawn by £10 or more, you are charged a fee of £25 per 22 days.
Example: £10 overdrawn for 10 days = £22 in fees.

HALIFAX: If your account is overdrawn by £15, you are charged a £5 per day fee.
Example: £15 overdrawn for 10 days = £50 in fees.

NATWEST: If your account is overdrawn by £10, you are charged a £6 per day fee.
Example: £10 overdrawn for 10 days = £60 in fees.

Now let’s talk about Wonga. They charge a daily fee of less than 1% on their loan, meaning if you take out a £100 loan for 10 days, the fee charged is £9.86 . That looks a LOT better than overdraft fees from a bank, right?

Now, Wonga has received much negative backlash in the press about their seemingly high APR, and yes, 4214% seems incredibly ridiculous! But, as we explained in a previous article, after some fun math, the APR works out to just 0.94% per day.

Because of the deceptively high-seeming APR, Wonga has been called a “legal loan sharks” by the press, and we don’t think that’s very nice. Especially when you consider the fact (and the comparisons above!) that all banks charge MUCH more than Wonga does, and they don’t receive any bad press at all!

I can only hope that this article will help you to see that you don’t need to overdraft your bank account!

Watchdog Daily on BBC1 now is also going to confirm my post.

shocking

making vast amouts of money out of the poor and vunrable :-( :-(

In short, both excessive interest rates and excessive charges should be cappped.
I recently made a mistake and underpaid a credit card bill by £200, resulting in £105 interest, calculated on the whole balance brought forward from the previous month, not just the underpayment.

My son has always got his finanaces in very good order. He has never had much credit (apart from a low interest £20million student loan) which, like most undergraduates, he ignores and just has a lot less in his pay packet than everyone else.

But he keeps getting unsolicited letters from Capitol One and others encouraging someone of his "poor credit" (sic) to apply for a credit card with 4 exciting choices of card design. 34% APR!!!!! Absolute USURY.

Brian If I run over my small bank overdraft with Halifax, £5 a day. And if you fall behind with credit card payments, watch out with all companies. Disgraceful.

Why is it disgraceful? Harsh, perhaps, but if you know the rules in advance surely its fair enough? As far as credit cards go, everyone knows the score before they take them out, so whats the problem there?

Trouble is, people want money for nothing and if you live on credit, then you have to accept that they want more back than you borrow. Thats how it works and always has done. Its up to the borrower to find a good interest rate and if there isn't one, then they need to look at credit unions or, perish the thought, savings.

Living on credit is the precise cause of this recession. No one was moaning in the boom years when they were taking out huge mortgages at 100% + of the value of the property they were buying. It didn't take a mathematical genius to work out that it was all going to crash in flames! This one was sparked by colossal toxic debt in the US subprime mortgage and it reached here when Northern rock went belly up, due to totally irresponsible lending - and borrowing. No one ever thinks to blame the greed of the borrowers!

Now that we are in dire straits, people cannot get out of the spiral of debt having lost jobs or taken pay cuts. It will end in more tears before it starts getting better.You can neither borrow or tax your way out of a recession. Austerity, painful and heartbreaking as it is, is the only way. Look at Canada in the 90's.

In your perfect world, Eldrick, there will be no human weakness.

Unfortunately, in this real world that I have to inhabit, family after family does not have money this winter to buy children presents, buy a Christmas tree (which is hugely expensive this year) or put nice food in front of families.

So they will try and use their credit card at 34% interest, That will be maxed, so they will then see a lovely happy family on TV borrowing at 3000% and that will give them a Christmas to remember.

Christmas goes, almost all wages get soaked up in paying pay day loan co back and they will have had £200 penalty for going over on credit card.

Family rows, couple split up, 7 day notice in window of house and children get taken into care. And one or more of the adults suffer from depression or a breakdown, lose their job and have no confidence to apply for another. Then what?.

We wish you a happy Christmas. :-S

I dont do xmas and if someone wants to go into debt over it, then thats their look out. Sorry, but people have to take responsibility for their lives and not expect others to do it for them. Anyone seduced by commercialism and the temptation to have a new iphone has only themselves to blame.

If you cant afford something like a xmas tree, then dont buy it.

You have absolutely not the faintest idea what my world is so best not try to describe it :-D

Sorry, but people have to take responsibility for their lives and not expect others to do it for them.

yep

True, Eldrick, it is their lookout. But if a father or mother is weak (and many of us are) precious money gets spent on wrong things. And it is a hell of a job digging yourself and your family out of a hole. No one wants their children to suffer.

And these religious festivals (Christmas, Eid, etc) are also shared by Pagans, I believe. The middle of the winter is a time when we like to forget the weather, the dark days and scrimping and saving and tight budgeting. We have fun and meet people and communicate by cards and 60p a card postage! :-0

And it costs a lot. And we have to do as well or better than the neighbours. And we traditionally have payback time when credit card bill arrives in January.

But that was in years when it was not possible to borow money at ridiculous interest rates that means interest is far more than you borrowed :-) And when you were a bit more certain you would still have your job after Christmas.

Well if people don't have the money then don't buy .. whatever happened to saving for stuff that you wanted ?

They can do what they want as long as they dont expect me or my taxes to fund it.

But again, best not include me in the royal 'we' either, because you might do those things, but i and thousands of others dont, surprisingly. Xmas cards are a victorian concept anyway. And i certainly dont do festivals, seeing them for the commercialised brainwashing that they are. Same as lots of others.

I dont have payback time in january, so include me out of that one as well :-D :-D

In fact, you could say 'speak for yourself' lol

Why we ever went off the Gold Standard I have no idea. We should be able to go into any bank with £1,000 in notes and get a bar of gold worth £1,000. Like we did in the 1920's.

Then I would make sure than no one had a mortgage. They would have to save 100% of the price for their first home. At the same time, they woud be discouraged from renting their homes.

Then I would stop any banks from lending money. Then I would prevent credit cards. And would stop stores and car showrooms from offering credit.

Anyone not able to pay a bill would be thrown into debtor's prison.

Yes, it would probably be a better world. But it is not the one I live in. If you inhabit such a lovely world, then bully for you :-D But we are not all Scrooges and well off in our ivory towers, some of us are Mr Micawbers - and up to our necks in it :-( :-(

Eldrick I have no payback in January either ..how people can enjoy xmas when it is not even paid for is beyond me .

I havent got a scoobie what the point of your last post is. Sorry.But I'll take a stab at it.

If you want to live in debt, go for it. But dont come bleating, whinging and wailing when you cant pay it back and expect to get bailed out. Fiscal illiteracy is the cause of this recession.I dont live like Micawber in the hope that 'something will turn up' but if that's your philosophy, good luck. You will need it.

People can worry a lot about the cost of Christmas. It tends to be a pleasurable time for children - so, although I have no idea how old Eldrick and Sylvia backwards are - I rather doubt that either will be expectantly waiting for Santa to fill their sock or pillowcase. :-S

Eldrick: "They can do what they want as long as they dont expect me or my taxes to fund it. "

They do - and you will. Back on your world tour methinks to increase your expenses and reduce your UK tax liability.
:-)

QUOTE:

And it costs a lot. And we have to do as well or better than the neighbours.

END QUOTE

Not us...lolol and when our children were young they were canny enough to know that if we gave them money for Christmas they'd get a lot more for it in the sales.

Sue There's me thinking "keeping up with the Joneses" was as true in Wales as England :-D