Penalizing the Financially Intelligent People

[KittenKoder]

Banks are starting to charge fees for people who have credit cards and don't use them all the time, this is stupid. Credit is what fucked up our economy and now banks want to penalize the people who are actually smart and use the cards only in emergencies instead of the idiots that live beyond their means and expect the government to pay off their debt.

The news just announced this in their broadcast and I can't find a link to the story online yet.

 

[The Rabbi]

Credit cards generate enormous profits in a growing economy. So the more they get used, the better for banks.
They are free to charge whatever they want. I am free to cancel the card if I dont like it.
What's the problem here again?

 

[KittenKoder]

Credit cards generate enormous profits in a growing economy. So the more they get used, the better for banks.
They are free to charge whatever they want. I am free to cancel the card if I dont like it.
What's the problem here again?

The problem ...

First, when people borrow money and don't pay it back, that hurts the economy.

Second, they are punishing people who don't do that.

 

[Mad Scientist]

Banks made huge amounts of money because people were late on payments in addition to carrying large balances. The smart ones are paying off the balances which is affecting the banks bottom line.

Because most people are paying an account off but keeping it open banks are now choosing to attach maintenance fees to those cards. I'm not saying it's wrong, banks have to make money but people should know what they're getting into as well.

I have paid off two cards here in the last few months and have closed both accounts. The so called negative hit to my credit score is over ridden by the fact that I have more money in my pocket to save or "invest" as I please. I can't be the only American who is doing this as savings rates are at the highest they've been since WWII.

MS what did you put on those credit cards?

The biggest thing was a tax liability I had one year. Some house renovations and maintenance issues that needed immediate attention. But I have to admit that probably 50% or more of the total balance was for shit I should have just saved up and paid cash for. The wife and I basically charged "wants" instead of "needs".

After we payoff the other 4 cards, my wife and I are only keeping the American Express which has to be paid off monthly anyway, and the Chase card which has stayed at 6 percent and never gone up. I got it through the Yokota AB Officers Club by the way.

 

[The Rabbi]

Credit cards generate enormous profits in a growing economy. So the more they get used, the better for banks.
They are free to charge whatever they want. I am free to cancel the card if I dont like it.
What's the problem here again?

The problem ...

First, when people borrow money and don't pay it back, that hurts the economy.

Second, they are punishing people who don't do that.

The vast majority of credit card charges are repaid. If they weren't banks wouldn't be jumping all over this.
Second, people don't have to sit there and take it. They are free to either use their card once a year and pay it back timely or cancel it.

 

[KittenKoder]

Credit cards generate enormous profits in a growing economy. So the more they get used, the better for banks.
They are free to charge whatever they want. I am free to cancel the card if I dont like it.
What's the problem here again?

The problem ...

First, when people borrow money and don't pay it back, that hurts the economy.

Second, they are punishing people who don't do that.

The vast majority of credit card charges are repaid. If they weren't banks wouldn't be jumping all over this.
Second, people don't have to sit there and take it. They are free to either use their card once a year and pay it back timely or cancel it.

We aren't talking about people who borrow a little money every month, we are talking about those who get the cards so they have it "just in case" and hold onto it until such time. Which winds up to no use for years.

 

[The Rabbi]

OK. Then they'll have to either use it, lose it, or pay the fine.

There's a problem here, how exactly?

 

[Neubarth]

I use my credit card as cash. I pay off the balance when due and have never carried a balance forward. I don't like carrying money and I don't like writing checks. Credit Cards are just so very easy.

As soon as they let us get microchipped in the forehead or on the back of the hand for easy scanning, I will do so. Then I will not have to carry a card around.

In the future, all monetary transactions will be conducted from an implanted microchip that will confirm your financial capacity to pay the bill automatically.

If you are chipped, you can pay if you are not chipped, you can go hungry. AMEN.

 

[Single Dad]

When banks/credit card companies get confronted for trying to charge BS fees like this it is amazing at how quickly so many of them turtle and eliminate the fees. If your credit card company tries to charge you for NOT using your card - tell them to eliminate the fees or you will drop their asses. I have 1 credit card that tried to do this to me and they agreed to eliminate the fees once I gave them the ultimatum.

 

[California Girl]

Banks are starting to charge fees for people who have credit cards and don't use them all the time, this is stupid. Credit is what fucked up our economy and now banks want to penalize the people who are actually smart and use the cards only in emergencies instead of the idiots that live beyond their means and expect the government to pay off their debt.

The news just announced this in their broadcast and I can't find a link to the story online yet.

Actually, credit didn't fuck our economy. People fucked our economy by using credit they knew they couldn't pay back. Banks are businesses - they are profit driven. Individuals are supposed to take responsibility for their own financial affairs.

I'm not defending the behavior of banks, but let's recognize that this whole situation was avoidable if:

1. Our government (both sides are equally responsible) had reigned in banks.
2. Banks had not been so greedy.
3. Groups like Unions, ACORN, et al had not forced backed to lend to people who couldn't afford to pay it back.
4. Individuals had not run up huge debts just because the banks were prepared to give it to them.

All in all, there is plenty of blame to go around.

 

[Shorebreak]

It's not a penalty.

It's an act of desperation from an industry that is losing it's ability to maintain reserve capital that it needs to issue loans.

I consider it a warning.

 

[The Rabbi]

Banks are starting to charge fees for people who have credit cards and don't use them all the time, this is stupid. Credit is what fucked up our economy and now banks want to penalize the people who are actually smart and use the cards only in emergencies instead of the idiots that live beyond their means and expect the government to pay off their debt.

The news just announced this in their broadcast and I can't find a link to the story online yet.

Actually, credit didn't fuck our economy. People fucked our economy by using credit they knew they couldn't pay back. Banks are businesses - they are profit driven. Individuals are supposed to take responsibility for their own financial affairs.

I'm not defending the behavior of banks, but let's recognize that this whole situation was avoidable if:

1. Our government (both sides are equally responsible) had reigned in banks.
2. Banks had not been so greedy.
3. Groups like Unions, ACORN, et al had not forced backed to lend to people who couldn't afford to pay it back.
4. Individuals had not run up huge debts just because the banks were prepared to give it to them.

All in all, there is plenty of blame to go around.

Banks are greedy. All businesses are greedy. THat's a good thing. If they didnt want to make money they shouldnt be in business.
The main issue is the Fed, which kept rates way too low for way too long. This made it immensely profitable to borrow from the Fed and lend it to people in, say, mortgages. THen package the mortgages and sell them to the Chinese. This was immensely profitable and looked like it would last forever. So banks were rational at the time.
Yes people ought to be more financially savvy. People ought to do lots of things. But they dont. And it isnt gov't s job to bail them, or the banks, out when they screw up.

 

[Intense]

OK. Then they'll have to either use it, lose it, or pay the fine.

There's a problem here, how exactly?

It's not whining Rabbi, it's about ethical business practices. There are scams out there, even by the big boys. Credit Card Companies profit from both ends of the transaction, don't forget that. I am a Merchant, I pay fee's for the privilege of the Service. Thats fine. There are major differences the field of choice here.

Personal Account scams, the monthly bill that you did not receive, that was penalized. Paid off in full every month. That happened to me twice the same month two years in a row, with a Bank I no longer do business with.

Another Account billed me for a Small Transaction, which I never received. I had another account with them in good standing. 6 months later, after it went to collection, I was notified, The bank got the original statement they sent me back as undeliverable. Remember I had another account with that Bank, from which I still received Statements. Without contacting me they damaged my credit. I immediately paid the full balance with the Fines and fee's added, with a letter of explanation. No word since they got my money.

Many of these Banks want short Grace periods so they can disqualify you from Special Low Interest deals.

Dave Ramsey suggests snipping all credit cards, and simply going Debit Cards. I'm almost there, should practices deteriorate, that's where I'm headed.

 

[The Rabbi]

What is unethical about it?? They send notice they are doing this. Don't like it? Send them a letter and cancel the card. Nothing could be more above-board.

 

[Intense]

What is unethical about it?? They send notice they are doing this. Don't like it? Send them a letter and cancel the card. Nothing could be more above-board.

Some practices are ethical, some are not.I just gave two examples. There are Banks that work well with Us, and others that Troll.

 

[eagleseven]

I'm not shedding any tears...they've had borderline illegal business practices for nearly a decade now.

The credit industry desperately needs ethical reform.

 

[Intense]

I'm not shedding any tears...they've had borderline illegal business practices for nearly a decade now.

The credit industry desperately needs ethical reform.

I think that part of the problem is they watch Government get away with shit, they just want to join in the fun.

 

[Charles Stucker]

Banks are greedy. All businesses are greedy. THat's a good thing.

Until they confuse "greed" with "the smart things to do to make profits" which are two completely different things.
Consider the young man whose widower father owns an Egg Farm and goes to college. The old man wants him to study agriculture and animal husbandry to take over the business and make it prosper. Junior decides a BBA is a lot less work and if he understands the principles of business he will make more money than his stupid old man could ever hope to get. Son gets a degree and father dies within the week, leaving everything to junior.
Junior takes over the farm and decides he can make more money by raising rates ~2% for his eggs. A year later the higher price he is charging had resulted in more competitors, who take away his sales, so his profits are down.
He economizes by cutting his expenditures on feed grain (wages for workers) to compensate. A year later his production is way down, as are his profits. So he downsizes his workforce (turning Hens into stew), but that again cuts his productivity.
He tries all the business manipulations he can think of, but nothing stops the downward spiral until ten years later he is bankrupt.
All because he confused "Greed" with "Sound Business Principles" and had no real clue about the specific business he was in. Anyone who thinks this is an allegory for a lot of modern businesses is correct.

 

[The Rabbi]

Greed means the desire to make lots of money, which almost by definition must happen over a long period of time.
How much money did the Enron execs make? How much when you count their legal fees? That wasn't greed; that was stupidity.

 

[Zoom-boing]

We dropped all of our credit cards but two visas and Kohls several years ago. There was no point in having them. We only use one of the Visas, the other is more 'in case of an emergency' type thing but we throw stuff on there once in awhile. Kohls sends us discount coupons all the time so we kept it. If any of them go with a yearly fee, we'd drop the card. If any of these cards decided to charge us a 'non-use' fee, we'd drop the card. If it were a 'use once a year or incur a fee', we'd use it once a year. If it's some kind of 'you must charge xxx per year or be charged a fee', we'd drop the card. No one is holding a gun to your head to use the cards. If most start to charge a fee that doesn't mean they all will. Hunt around for those that remain fee free.