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Credit Cards: Screwing The Conscienscious, Reliable Payer

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Bloviating Zeppelin: Credit Cards: Screwing The Conscienscious, Reliable Payer

Bloviating Zeppelin

(in-ep-toc'-ra-cy) - a system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.

Thursday, May 21, 2009

Credit Cards: Screwing The Conscienscious, Reliable Payer


Sure, there have been changes proposed to the credit card industry.

But what you likely didn't hear is this (from the NYTimes):

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

It is estimated that the average American credit card debt is $10,000. My credit card debt: $0. I pay off my card every month. I've done this for almost 30 years. I've worked long and hard to establish my credit rating of 830. As of this writing, my one credit card has a limit of $58,000.

But that result didn't come without a price itself; I "did without" many things for many years because I held to this tenet: if I couldn't pay it off in one month -- I either didn't make the purchase or, rarely, I applied for a small loan from my credit union. I established a pattern of paying off small loans rapidly. I worked overtime or other jobs in order to accomplish this. The amounts my lender made available to me gradually increased to the point where, with sterling credit, the real purchasing power -- when absolutely necessary -- lay with me and not the store, dealership or business.

How will the screwing of conscientious card users be accomplished? To continue:

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride, he said, because many have not had to pay an annual fee even as they collect points for air travel and other perks.

“Despite all the terrible things that have been said, you’re making out like a bandit,” he said. “That’s a third of credit card customers, 50 million people who have gotten a great deal.”

So you've done without, you've sacrificed, you've handled your credit like an adult, eh?

BOHICA, Reliable American Consumer.

Thank you, Mr Obama. Thank you, federal government.



Blogger A Jacksonian said...

Why did I take AMEX back in the days where the bill was due upon receipt?

Fiscal restraint.

Don't buy what you can't pay for.


It works.

Want to float loans on day of purchase?

Good-bye to the plastic, and there will be some cards that will not do that. Mostly smaller financial institutions, credit unions, and then there is the off-shore option. You want to see the Nation lose money? Imagine if a bank in the Grand Caymans, Bermuda, or even CANADA offered a standard credit card as we have today.

You might be able to stop the first couple of Nations, but we have a FREE TRADE agreement with Canada and Mexico.

Good luck on making us 'deadbeats' pay up. I can and will go elsewhere. As that will start to make me an autonomous citizen of the Nation. And, believe me, that would be a nightmare to the Elite. We are a highly ingenious people when it comes to finances. Because that represents our Liberty.

Thu May 21, 04:39:00 AM PDT  
Blogger shoprat said...

I, as a matter of principle, refuse to use credit at all unless absolutely necessary.

Thu May 21, 07:16:00 AM PDT  
Anonymous WMD_Maker said...

What they passed DOES NOTHING to protect card users. If they wanted to do that they should have capped rates coresponding to the users credit score.
Oh your rate is now different from the intro rate? READ THE AGREEMENT where it says the rate is only good for 3 months then in goes to 28%.

Thu May 21, 07:51:00 AM PDT  
Blogger Rivka said...

Sorry, this is off subject again BZ, but I wanted to share this moment of greatness right now as I am hearing Cheney rebut Obama on T.V. he is a great man BZ. Truly a great man for standing up as he is right now. It should have been done a long time ago, but he is the only one standing. I am teary eyed because I know he is doing it because he loves this country and he understands the peril we are in now because of Obama.

Thu May 21, 08:30:00 AM PDT  
Blogger Rivka said...

Bob Beckell about blew up over it!! Way to go Cheney!!

Thu May 21, 09:12:00 AM PDT  
Blogger A Jacksonian said...

Can't say that I blame Cheney, that Obama speech was just horrific. Say one thing, do a second, mean a third over and over again. And then done one more time... but he never applies the standards he uses for Guantanamo to, say, the bailouts. Rule of law and all that... oh so willing to be nice to our enemies, and then screw us up even more at home.

Thu May 21, 03:20:00 PM PDT  
Anonymous Ron Russell said...

This is part of the great Obama plan to help some of the down-trodden of his base. But the law of unintended consequences will come into play and many on the margins who were previous able to obtain cards will now find it impossible, unless the administration forces credit card companies to issue cards to those people (shades of Fannie and Freddie). And your rates BZ are going up to make up for the short falls the credit companies are facing under this plan. Obamaism is in full swint.

Thu May 21, 03:32:00 PM PDT  
Blogger Bloviating Zeppelin said...

AJ: GOOD point! That was my very FIRST card and it got me into the habit of paying off monthly! Dammit, I had forgotten that! Plus, of course, I was trying to determine how I would reconcile being charged for being a part of the Responsible Few Consumers. I'm not sure I have any ideas about that at this point. You have any suggestions for those of us who pay off reliably but don't want to be screwed over additionally?

Ron: you know, you bring up a frightening prospect: what IF Mr Obama somehow manages to MANDATE that card companies provide credit to, essentially, the homeless and UTPs?


Thu May 21, 05:35:00 PM PDT  
Blogger A Jacksonian said...

Mr. Z - Store cards if you frequent certain establishments. Amazon's card is virtual, so I have no idea if they would count on that or not... probably would under the Visa moniker, so iffy.

Other than that, get an account with a Canadian bank and get their card... if you can find one taking US residents. My guess is that there are a few of those willing to do so.

Local banks may have more say on their issued cards as they are restricted to their customers... and debit cards should see zero impact as they are just that: debiting an account.

If AMEX moves back to the pure 'pay on time' theme, with only limited leeway before yanking the card, my guess is that would not be a credit card, as such. Right now they slipped into credit card territory about a decade ago, but a revival of a 'classic' AMEX would still allow individuals to do within month money management and still keep a credit rating without getting the penalties.

There will be ways out and this will be more of a PITA than 'real' legislation is my guess. And the flight of money from the US to extra-National firms will begin the end of the domestic credit card industry and put more cash outside of where the federal government can get to it. Local havens will also be an option as well as dedicated store cards... somehow, over time, my guess is that rates and options from extra-National firms will be too enticing to ignore.

Thu May 21, 06:47:00 PM PDT  
Blogger Bloviating Zeppelin said...

AJ: some excellent issues for consideration.


Thu May 21, 07:04:00 PM PDT  
Blogger bigwhitehat said...

So instead of addressing a real problem with credit card companies, congress decides to enable the destructive behavior of people that shouldn't ever open an account in the first place. Typical.

However, if the credit card companies try to make you pay, that is their own doing. Not congress. And if they actually think that $0 debt customers will keep them around, they have another thing coming. I foresee a massive card toss.

I threw away the cards a long time ago. The only one I use is my bank card. If I need to borrow then I have to suffer the humility that I deserve. That helps keep me on the straight and narrow.

BZ, government and the card companies may not appreciate your financial responsibility. But, I do. I can't thank you enough for the effort you put into keeping your finances in order.

Thu May 21, 07:35:00 PM PDT  
Blogger A Jacksonian said...

I have only one debt, and that is on my house, which I have put payments on the principle to pay that down, and then did a re-fi at absurdly low rates and for a much shorter time, thus a 30 year loan now will be paid off in 15 or so, unless the economy absolutelty tanks to something worse than Carter's Stagflation coupled with FDR's insanity in the Great Depression.

That is why ammo is a good investment: it never loses its value. It always serves its purpose no matter the economy. Better than gold as, with a bit of work, it can get you a meal or three... I do hope it doesn't come to that, but if it does then my debt is the least of my worries.

Fri May 22, 05:05:00 AM PDT  
Blogger David Wyatt said...

Us too, BZ. We've never had CC debt. We only got into using plastic by promising ourselves the 1st tiome we couldn't pay it all of, it was shredded. This makes me so angry. But, no doubt, when they try this on us, the card is toast. God Bless you, BZ.

Fri May 22, 06:37:00 PM PDT  
Blogger Ron Russell said...

The is a new age, the age of Kenyan Keynesianism based on the huge successes of Robert Mugabe and others that believe in massive spending and hot printing presses. Oh yes, and easy credit for those on the margins. Don't worry or concern yourself, Big Brother will make things right. We can all sit back and relax someone is watching out for us. Things will be great--Utopia in just around the conner and "Happy Days are Here Again."

Sat May 23, 10:52:00 AM PDT  

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