12 months, no interest -- I just got slammed with a massive charge of back interest :

[johna]

We had purchased a John Deere snow blower from a large home improvement store under the 12 month same as cash deal. Then our refrigerator died a few months later. We again did the 12 months same as cash. Then our dishwasher died. You guessed it...12 months same as cash. I calculated to the penny the monthly payments. The credit card company then pulled a fast one. They did not apply the payments to the item that was expiring first. They applied the payments across the board. So a the end of the first 12 months, I was charged a HUGE fee. It took several phone calls to straighten this out. Be careful when taking advantage of these special offers. The credit card companies are getting really tricky!

[YLTL_Dan]

Originally Posted by disneysteve

And what would that protection consist of? Should lenders not be allowed to make these offers because people are too irresponsible to follow the rules? I'm a firm believer that they can not legislate away stupidity as hard as they may try.

That's why I didn't lay down a specific prescription

I have a hard time saying the government should be invovled in any more than they already are, but more information could help some. For example, just like cigarette companies who have to put the hidden dangers on their labels, maybe these short term financing companies should do the same. Clearly defined stats of how many people fail to comply with the terms, exactly how much it will cost them when they do. Not telling someone something can be just as deceitful as telling a lie.

[dczech09]

Pardon my french, but the credit card companies are not responsible for the incompetence of others. Same goes with the tobacco companies, and other businesses for that matters.

People always cry about asymmetric information and that the consumer knows so little. The real problem is that people blinding buy things or sign contracts without understanding what they are getting themselves into. Case in point- the guy who got hit with back interest.

The companies are not hiding anything from us as comsumers, it is all in their disclosure statements, which are essentially like "rule books" so to speak.

I think that a lack of real formal education, mixed with people caring more about what is on American Idol or some other show, creates an issue. We do not need more government regulation; we have enough of it. We need people to take responsibility and actually take the time to inform themselves.

[YLTL_Dan]

Originally Posted by dczech09

Pardon my french, but the credit card companies are not responsible for the incompetence of others. Same goes with the tobacco companies, and other businesses for that matters.

We might be off topic

However, I disagree on this point. Tobacco products were never advertised as dangerous to your health until recently. They were glamorized and people learned the true effects later.

You say that companies aren't responsible for "the incompetence of others." Wow, you must be incredibly smart and a lucky soul to never have fallen victim to false advertising, misinformation, or under-information. We'd still be gassing our cars with leaded gasoline, drinking poisoned water from unregulated plants, and eating contaminated foods if not for government regulation. "Companies" can't have a free-for-all and then blame the "incompetence of others" for buying their harmful products. I don't have the money and time to research every single product before I buy, so I trust that it's being regulated at some level.

[YLTL_Dan]

Duplicate

[dczech09]

Ok perhaps I should rephrase. Or maybe just reiterate about the disclosure statements I had mentioned? The information is available in that situation, its just a matter of reading it.

Is SOME regulation necessary? Yes but only to the extent that it protects the consumer. Should government be doing this? Not in an ideal world. In an ideal world, businesses would exist to be "whistle-blowers" or inform and educate society. Case in point: look how Standard & Poors and Moodys are private enterprises that essentially regulate the financial industry to an extent. Or how about the FINRA? That is not a government entity either; its made by the financial industry.

I do not believe in over regulation, especially by a government that is too generalized and knows little about everything. How are a few select bureacrats supposed to make good regulation decisions when they do not know what is on the other side of the tracks?

Dan, you implied that businesses could run free without regulation and that would effect all of us? I completely disagree with that implication and find it erroneous, with all due respoect. Why do I say this?

Who runs these "businesses" such as credit card companies and tobacco companies? People. Also known as consumers. They are people like you and I and have the same propensity to use their own product as we do. I used to work in a bank and some employees there had more debt with that respective bank than you could count. What water company is going to serve poisoned water when the very people who work there are also customers? They be essentially poisoning themselves.

Also, if businesses were just allowed to do whatever they wanted regardless of the impact on society, couldn't the customers simply say they're fed up by NOT doing business with them? I think free market enterprises and selection creates an situation where it is advantageous for businesses to do what is right. In a free market I can choose not to do business with the tobacco companies because their product causes cancer. In a free market I can choose not to eat MCDs everyday because it is unhealthy food. In a free market I can choose not to buy Nike because I dislike sweatshops.

Government over-regualation distorts it all because one person cries wolf. Contrary to popular belief, not all businesses are evil. And the ones that are evil will be killed by a free market of people who wont do business with them.

[crazyskunk82]

I've been there. A few years back, before we decided to pay off our debt and be responsible, we had bought living room furniture. $1,500 at 0% interest. Our friends had done it and paid it off quick. We paid about half of it before running into some financial trouble (not having a budget or emergency fund), and had to start making minimum payments. Then before we knew it, a year was up. After the back interest, we were back to owing $1,500. Two years later, after making minimum payments, we owed $1,200.

We just recently paid the whole thing off in one shot during our debt snowball. The final cost was well over double the original.

[flipyourdebt]

Sounds like a tough situation. It may still be a good idea to consolidate your debt. You can probably get a more competitive interest rate.