NEWS: The World's Worst Visa

I wish they'd sort this! There was a recent debate in parliament about it. Parliament wanted to introduce a maximum interest % (~20% I think). In the end, the industry got away with 'self regulating'. Go, neoliberals!

Artsitis said on


Because in offering high rates to high risk folks - they're encouraging them to fail again. The goal would be to profit off the less fortunate... which might be okay in a nation based on making money off the sweat of the poor, but in a primarily socialist society such as those prevalent in the UK, you'd expect better.

[Edited on Feb 12, 2005 8:16PM]


Sorry. Not picking holes or anything. I just think it's sort of funny that you describe the UK as 'primarily socialist'.
Maybe relative to the US, but even then that's stretching it a looooong way ...
Even the Labour Party don't describe themselves as socialist any more, They seem to think it's a bit of a vote loser ...

[Edited on Feb 13, 2005 10:46PM]

Hmm. I always considered credit cards a cute, socially acceptable form of debt slavery. And as far as I'm aware, I'm right!

haha

70% may seem outrageous, but these are huge risk people we're talking about, with tiny credit limits. if they can never be in more than £150 debt it's not like this is going to eat them alive, and as far as i can see they'll have the option of paying off the balance in full every month and not being charged interest.
i'd like to see the percentage reduced a hell of a lot more if they begin to prove themselves, but some people need a big scary stick waved at them to toe the line, and 70% is pretty intimidating.

I don't think the people this is targeted at have any security to offer against a credit card or any other lending. Let's face it, if you could avoid getting a 70% credit card, you would.

There is an enormous amount of financial illiteracy in the UK. I work in finance and have to deal with these people every day. Add that to enormous amounts of pressure to spend, spend, spend and you have a recipe for disaster.

Personally I would support a cap on interest rates for credit, storecard and loan companies. Some of their interest rates are just disgusting.

I would support such a cap as well, so long as the legislation included provisions to find some way to repair credit. It's extremely hard to get people to be philanthropic when it comes to loaning to high-risk borrowers, because of the (apparent in this thread) stigma attached to poor credit history. If the government is going to legislate that lenders cannot profitably lend to those at such high risk (which I think would be a good law), then it should establish a means of helping those people repair their credit.

they are assholes because they are offering a card to high risk individuals. the reason people are denied is so the lender dosent have to worry about not collecting. at 70% interest they need to make a quick buck. i could understand having a card or program directed towards low income households with like a 250 or even 500 dollar cap with a fixed 7% apr but 70 is a bit of a stretch. the more troubling part is that they know they are doing it, they know that low income households cant afford it and thats what they want. the more intrest that builds up the more profit they make. its sick

You have explained why they are suspect, but namecalling is just childish. Is everyone who works for Vanquis an asshole? If not, which ones are, and which ones aren't? How many of them do you know personally? What exactly does "being an asshole" entail? What do you contribute by namecalling? Have you ever written a member of your government to articulate your views regarding usury? If not, why do you find that it is worth your time to call someone an asshole (someone who is not around to defend him/herself) but not worth your time to attempt to change the situation?

As for your silver-bullet 7% interest rate on a $250 loan, the annual return is $17.50. That's not even remotely enough to cover the processing costs that the lender pays, and no lender (besides nonprofits) would ever offer such a loan. I'm not saying that it is a Bad Thing for for-profit lenders to stop lending to this demographic, but your loan would never happen in the real world, outside of microfinance (which is usually a philanthropic venture).

Edit: to mention that a lender could make a guaranteed 3-5% interest by putting the same $250 in a savings account, and over 6% in a 30-year bond. That makes your 7% plan even more unrealistic.

[Edited on Feb 14, 2005 by threejane]

You need some money pal? Only five points a week.

Damn... that's fucked! I'm sure if they introduced that in the US, people would still clammer for it. I've played that game, and I'm happy that I'm almost to the end of it.

calm down there tiger. i will admit the asshole comment was a bit out of line but let he who hath not sin cast the first stone. i apologise for being a backwoods simpleton but the low interest low cap credit card was an idea. and surprisingly enough they do exist in some form wit h higher caps an/or interest rates.

With the secured card, the profit comes to the issuer from the annual card fee, and interest on the money the cardholder is required to keep in the bank account to cover the card.

I get my economic analysis from Brad Pitt movies too!

This makes the IRS look like SAINTS.