So Rates are Zero? And Yet We are not Feelin’ the Love

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In a 2015 article from Forbes, I find the perfect quote: “Banks get free loans.” What about the rest of us?

So the Fed just gave the banks a zero percent lending rate. They have been cutting rates for months, and I am asking, “What about the consumer?”

Here’s my little story. After a bankruptcy in 2014 and subsequent divorce in 2016 (thankfully) I embarked on a rebuilding effort to improve my credit. I got credit cards and paid them every month at an average 20% rate. My credit score went up to a range considered good by the agencies that banks pay to report you. So with rates going down, I looked to consolidate my debt under one card (with a lower APR) in order to pay down the debt faster, further boosting my score.

What I was not prepared for is the flat-out refusal of these businesses to refinance, consolidate, or extend more credit to individuals. How is it that they maintain the usurious rates they have charged me since 2014? Now I am prepared to tell the world how creepy some lenders are.

MagnifyMoney started with a focus on credit cards, where Americans have $860 billion in debt and are paying interest rates of 17 or 18 percent or more. The site’s writing is clear and bold. Laying out the fees and interest rates on a Bank of America savings account, MagnifyMoney concludes: “However, given that they only pay between 0.01% and 0.03% interest, we don’t know why anyone would open their accounts.”

Nothing has changed in this scenario as far as I can tell. Personally I applied for new cards that I could transfer balances to, and expressed to those “Customer Service Reps” that I would freeze my credit so I could pay down the debt faster. I offered to put it in writing, like a letter of intent the big boys use on Wall Street, where I had spent my 28-year career. Simply put, credit unions and banks do not want to deal.

The reluctance of credit unions is more painful because they promise to help the member community, while often rejecting applications of the people they serve who are seeking debt management assistance. This begs the question, “Whose side are you on?”

From a business perspective, it’s just senseless. The more rapidly people can pay off their debt, the more money they free up in purchasing power. This feeds the economy. Also, it promotes good will, which in turn, incentivizes more borrowing as well as new investment accounts. If any institution would offer to clean up my debt at even 10%, I would be shouting their merits from shore to shore.

There is a humongous amount of unsecured debt in this country. Subprime scams still linger, and restrictions on banks in the form of safety nets, have been rolled back by the current administration. All of this points to #2BigToFail2. The ability of lenders to have a rate free-for-all compounds this issue, and their rescue again would be more corporate welfare. With a gazillion dollar deficit, could we even afford that? What about OUR bailout?

Co-conspirators is the term that comes to mind when evaluating the relationship between Equifax, Experian, Transunion, and the lenders that pay them. Did we learn nothing from 2008 when Standard and Poor’s scammed investors with AAA credit ratings? Why are we still allowing this to happen? Have a look at Wikipedia.

There are some internet lenders and intermediaries like Credit Karma and Nerd Wallet, which I am pursuing. But until these lending institutions get over their attitude of squeezing the customer, I have no real hope for them. And I advise you to do your homework, too. Maybe they should fail! I for one will never do new business with any lender that rejects me now.


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