     Christine Baker | Tuesday, November 23, 1999 - 08:07 pm 
I have NEVER seen any offers for Visa or M/C without credit check.
What is the importance of a credit check for a 110% secured card?
Example:
I deposit $11,000 at 5% interest.
I get a 10K credit line, a gold or platinum card with a 10% APR, an 800 # for customer service that's actually answered, purchase insurance, the car rental insurance, all those goodies.
Why are the only options for people with bad credit scores or people who don't want their credit accessed
1) scum like Cross Country and Orchard
2) mediocre banks like First Consumers?
Why is $11,000 worth less than some meaningless Score?
I can't figure out why Visa and M/C would object, they make their bucks by people using their credit cards.
And how could the bank lose money?
What am I missing?????
Hmmm, maybe the people who got these accounts never have problems and that's why I don't know about them. Well, I'd really like to hear about them if they exist.
Thanks,
Christine |
| Sean | Wednesday, November 24, 1999 - 06:04 am
Because the companies fear tax liens.
Let's face it, the government insists upon getting paid first. If you owe $10,000 in debt and you have $11000 in assets your creditors feel safe.
But then the IRS comes in and says you owe them $11,000. If you suppose that the IRS will have to split the assets with your previous creditors, that being the "fair" thing to do, then you are sadly mistaken. The fact of the matter is that the IRS comes and takes ALL of the assets and your creditors are the ones who get stiffed with a nice chapter 7.
They're going to run a credit check on you in order to ensure you have no outstanding income tax liens. That means an additional inquiry added to your credit profile. Sorry. |
| voigtkampff | Friday, November 26, 1999 - 09:07 am
Sean, are you sure that it the reason or is it a theory? It makes sense, but I have been reading about IRS liens for a while. I don't have an understanding yet. But I do know that there is a difference between the secret tax liens and recorded tax liens. I know that the IRS does not always record a Notice fo Tax Lien, and that without such notice the lien is invalid against 3rd parties like credit card companies. I do NOT know for a fact, but have observed, that even if a notice is filed, the IRS seems to pursue real estate, but does not focus or look for bank accounts. I've had too little experience to draw a conclusion. But it seems unlikely to me that a secured credit card company would have this issue in mind. If it's not your theory, could you please cite an authority. I find this issue more confusing than credit in general. |
| Sean | Friday, November 26, 1999 - 09:30 am
It's a theory, but it's not the only one I have.
My other two theories are:
1. The credit card companies are afraid of bankruptcy. Just because they have your $11,000 as security doesn't mean a bankruptcy judge can't take it as part of a "cramdown" bk13 workout.
2. The possibility of identity fraud. Without reviewing your credit they won't know if a fraud alert has been placed on your credit profile.
Plus, as you are aware, income tax matters are handled through special courts where you do not get a trial, per se, but rather an administrative review process by non-judge "judges." Typically these "judges" give their IRS buddies a lot of leeway even though they may see the person obviously didn't follow the letter of the law. That's why one of the best techniques for dealing with the IRS is to pay them what they claim you owe and immediately sue them for the money back. That way the matter isn't handled in the special tax courts, but rather by a normal federal civil court.
I can deeply sympathize with anyone's (especially Christine's) desire to avoid inquiries but unfortunately it just isn't always possible. |
| Anonymous | Sunday, November 28, 1999 - 12:29 pm
I believe that it has more to do with identity fraud or perhaps some person trying to hide from the powers that be than anything else. It absolutely has nothing to do with a federal tax lien. I have two unsecured cards and a lien. The IRS is only concerned about getting paid and that's why they file liens. A lien isn't usually filed until several years after the IRS assesses the tax when they figure they aren't going to get paid. They filed a lien against me and I don't own a single piece of property. If someone doesn't want an inquiry at the credit bureau I would think that you would almost have to be a "non-entity" and have "never" applied for credit, because it's legal for credit card companies to review your file without your ever having requested credit. All they have to do after an inquiry is to forward to you a "pre-approved" offer. I have been working on my credit and therefore, get my credit reports every month and it appears that the more I dispute, the more I get these offers. Some of these companies are checking my credit every month, because there is a new inquiry every time I get a new report. Then I get a new offer with a higher credit limit. It's literally unbelievable. |
| Christine Baker | Monday, November 29, 1999 - 03:57 pm
There is no way that the lack of secured Visa and M/C without credit check has anything to do with tax liens or bankruptcy. Imagine your tenants' deposit going to the IRS, or the $20k car being auctioned off by the IRS instead of being used as collateral for the lender holding the $22k loan.
I don't at all understand the identity fraud theory. I am giving the bank the CASH. They then give that same person a Visa or M/C. What could be the problem? I'm not me or I don't pay my bill, they got my deposit.
Anyway, I'm happy to supply my driver's license and passport for ID.
My theory is that
1) it once again is a way to steal the 20s from poor and ignorant people.
2) it is a very powerful tool to force consumers into BORROWING and into the credit scoring scam.
People have to pay off fraudulent charges because otherwise they can't get a credit card. People have to spend what little time off they got to read forums such as this one, send requests for credit reports, dispute incorrect data, basically deal with crap nobody should ever have to deal with. What a waste of time!!!!
If you don't play their games, you don't rent a car, you can look forward to strip searches at the airport after you pay cash for your ticket, you don't phone/mail/net order, you don't get purchase protection, you don't get free extended warranties, you don't get cash back or frequent flier miles.
When you don't have a Visa or M/C, or you prefer to pay cash, you are immediately labeled as a drug dealer, criminal, or deadbeat loser.
WHY???? |
| Sean | Monday, November 29, 1999 - 06:52 pm
I don't have to imagine, I know that bankruptcy judges can set aside any agreement they feel like. I've seen first trust deeds get subordinated to other debts. These judges have the authority to completely rewrite whatever agreements you have in ways that are never pleasant for the creditor.
As for your paying cash thing, why not check into traveler's checks? Also, I used to have the name of a place that would give prepaid VISA cards for traveling overseas, just like prepaid phone cards. You could get that information yourself by just calling VISA and asking them (that's where I got it from). |
| Christine Baker | Monday, November 29, 1999 - 08:32 pm
1) Re Bankruptcy:
I've never seen or heard of such a thing as subordinating a first mortgage. But I'll take your word for it.
So there is MORE evidence that the government does everything possible to force the American consumers into credit reporting and those idiotic scores.
The rich get richer, the poor get poorer, with no way out. Just great!
2) I'm not up to spending endless hours on my cell phone calling Visa. Since I've never heard of prepaid Visa, I'll put that in a new topic.
Thanks,
Christine |
| voigtkampff | Tuesday, November 30, 1999 - 06:49 am
Actually bankruptcy judges cannot set aside any agreement that they want. But there are definitely situations where they can. Normally what determines this is when the contract was signed. I saw a really unfair case where someone purchased a new car from GMAC, but because of the timing of GMAC's lien and the timing of the bankruptcy filing, the court (upon the trustee's motion) voided GMAC's lien as a "preference" so that the car was free and clear. The trustee took it and sold it for the benefit of all creditors (and for his own benefit of course). |
| Sean | Tuesday, November 30, 1999 - 09:07 am
Well, the point is that if someone were close to insolvency and got a secured credit card with $11,000.00 and filed bk 30 days later the judge would be likely to set that agreement aside, wouldn't you agree? |
| voigtkampff | Tuesday, November 30, 1999 - 12:36 pm
Actually this is sort of neat. If one commits fraud on a creditor, either through misuse of the the credit card (Xmas shopping in June) or through material misrepresentations on the credit application (overstating income), then the creditor may seek an exception to the discharge under §523(a)(2). In other words, they can file suit in the bnk to have the judge determine that this debt should survive. Only the creditor brings a §523 action. I doubt that any other party would have standing to bring such an action. As a practical matter, it's rare enough for the creditors to do it. No judge would ever use §523.
If the debtor commits fraud, but on the court instead of on the creditor, then the whole bankruptcy can be thrown out. That would be a proceeding under §727 of the Code.
The Court is stationary. It does not move unless you ask it to, through a motion. Generally, the only parties in interest who ask it to move are the Debtor, Creditor, the Ch. 7 Trustee, or the U.S. Trustee's office. Very rarely will the court do something on its own (sua sponte). The court is too busy to care about who takes out an $11,000 card 1 month pre-petition.
In every case where a contract is voided, it's because someone besides the judge had something to gain and filed the appropriate motion. I have clients with a quarter million in credit card debt (not every day) who don't get a fight from anyone when they file. Creditors sit on their rights and the trustees don't care unless they see some financial benefit (to them or the creditor) from fighting. I'm not exaggerating on the amount. So while I still agree that bnk judges can set aside agreements, please understand that it's not that simple and it's not automatic. |
