Banks asking for credit card debt forgiveness

edited October 2008 in The Economy
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Say goodbye to the concept of "moral hazard" with respect to credit card debt.
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Banks asking for credit card debt forgiveness
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With defaults on credit card debt spiraling amid a global financial downturn, banks already reeling from the mortgage crisis are losing billions more from unpaid credit card bills.
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Big banks have formed an unusual alliance with consumer advocates to urge the government to allow huge portions of credit card debt to be forgiven, a turnabout from recent years when the banking industry lobbied strenuously to make it harder for consumers to erase their credit card debts in bankruptcy.
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The new pilot program — which the banks hope will become permanent — could involve as many as 50,000 people struggling with credit card debt. On an individual basis, the amount of debt to be forgiven would rise according to the severity of the borrower's financial situation, up to a maximum of 40 percent.......

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Comments

  • Wow. It really burns my hide to see this, when I consider that I have virtually no CC debt but I feel like I cannot afford a house.
  • Cheer up Ben!
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    If the plan is adopted, just join the ranks of the financially irresponsible and you can enjoy a 40% discount on your credit card purchases too! That's what I plan on doing.
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    Hmmmmm, there has got to be way to leverage this situation.......
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  • It's a trap.
  • I've got it! Pay off your Discover card with your Visa and then pay off your Visa with your Master card. You could get a triple 40% discount. Woohoo! Only pay 22 cents on the dollar of all your credit card debt! What could go wrong?
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