Monday, December 15, 2008

The Credit Card Vultures

Spotted in the LeftoSphere:

...sweeping reform of the credit card industry that would ban practices such as retroactively increasing interest rates at will and charging late fees when consumers are not given a reasonable amount of time to make payments...

The Feds are cracking down. It's about friggin' time, too! For a long, long, time, the typical pre-tax margins on CC's was 15% (and that includes writeoffs, collection costs, etc.)

FIFTEEN PERCENT PRETAX!!

A close friend has a CC account with a large local retail chain. For several months, the bill arrived and the "due date" was (say) the 21st of the month.

But a couple of months ago, the bill arrived and the "due date" became the (say) 18th of the month.

My friend, now accustomed to the 21st routine, mailed the check on the 21st, and got hit by the assholes.

Now you can say "Too bad! Shoulda read the damn statement!!"--but you and I both know what was going on; the revenues from on-time payments aren't sufficient for some folks, so they jiggered "on-time" a bit, hoping that nobody would notice.

The good news: my friend called the retailer whose name was on the card and made it clear that this was unacceptable. The retailer agreed, and refunded the extra charges.

Still and all, I tell people that having a CC is simply NOT necessary (and is dangerous.)

Nobody listens.

8 comments:

Billiam said...

Good points, all. So far, I've had no problems with the company I have my 1 and only cc with. In fact, I got a lower rate from them about 6 months ago.

GOR said...

I junked two bank cards after they wanted to charge me a fee for non-use of the card! They called it something on the order of a 'membership fee'.

As a retired banker I took exception to this and told them so in no uncertain terms! I understand there is a cost to maintain records on cards which do not get frequent use but they both had plenty of fees and finance charges from me when I did use them.

If they want to institute a 'minimum-use fee' on CCs, it won't be with me. There are plenty of other alternatives and life is too short to put up with that BS...

John Foust said...

The same thing with online payments... it sure feels like they jigger the window in which an online payment can be made. They're able to detect and post a charge to the card within *seconds* of me making it. But it takes a variable number of *days* to wire money from my bank account for my payment?

Dad29 said...

Fortunately, you can track wire-transfers--precisely when they are sent AND received.

Not so with US mail.

Dad29 said...
This comment has been removed by the author.
John Foust said...

I wouldn't know the precise term for it... what mechanism is used when I make a payment on the credit card's web site? Like direct deposit? Why should it take days to arrive that way?

Dad29 said...

It's electronic payment. No good reason for it to take more than 3 days from the time you hit 'enter' to credit on your account.

It's just like a check--the payment must go through Fed Reserve branch(es) and hit your bank. There's a delay of a day or so in case your bank bounces your electronic debit, just like with a check.

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