Has your bank recently reduced your credit limit and raised your interest rates or closed your credit card account altogether?
Did you wonder why they did this to YOU?
If you ask around, you will find you are not alone.
As a matter of fact, these financial nightmares have happened to most Americans.
It matters not whether your credit score has always been high, you have a solid income, or you have never missed a payment.
Chances are, you have still been screwed by the banks you just bailed out.
Part of the reason is the new banking regulations talked about in this video.
Given an eight-month forewarning of new regulations, the banks acted fast to raise their profitability before they had to conform to the new rules, thus rendering most of those rules ineffective in protecting the consumer.
"The banks want to continue business as usual.
Indeed, they're scurrying around right now trying to figure out what other tricks and traps they can put in so they can drive up their revenues.
And, with no cop on the beat, that's what they will continue to do."
-- Elizabeth Warren, Harvard Law Professor
But the issue goes deeper.
Banks profit by loaning money.
So, why would a bank want to cut off their main source of income?
Obviously, there is a logical answer somewhere.
That answer does not paint a pretty picture.
Let's take a sample case.
John has a credit card with Chase bank with a $30,000 credit limit.
He has had credit cards with this bank for 25 years, and has worked for the same company for the same amount of time.
His income is currently $160,000. per year.
John has never missed a payment on his credit card.
He has an excellent credit rating.
He recently moved into a new home, and charged up about $6,000. on his card.
He has made plans to start his own business, and plans on using the remainder of his $30,000. credit line to get the business up and running.
Out of the blue, Chase sends John a letter informing him that they have dropped his credit limit to $6,000., and more then doubled his interest rate.
His credit rating just dropped because his card is now up to its limit and, with the new interest rate, it will take him a while to bring it down.
His dream of self-employment just went out the window.
Why would Chase do this to a steady, no-problem, paying customer?
If credit is fundamentally your own ability to convince people that your future earnings have value, why would they cut John short?
The answer is that the banks know what is coming, and John doesn't.
John's earnings, as well as those of most of middle-America, no longer hold any future value.
What, specifically, does this mean?
Very simply, the answer is one of two things - The company John works for, or maybe the entire industry, may fail in the near future.
Worse yet, should the Federal Reserve continue to print more fake money until we reach a point of no return, and every indication is that they will, we will jump head-first into the spiral of hyper-inflation.
As the cost of goods continue to rise during this spiral, wages will increase.
When the price of a loaf of bread is $50., your five thousand dollar credit card debt is now worth only about $300. in value to the banker.
The banks are making a strong statement about the near future that we should all heed.