BS: Credit Card SCAM - by the card companies

Subject: BS: Credit Card SCAM - by the card companies
From: Mr Red
Date: 11 Jul 04 - 04:39 AM

Cash withdrawls on some credit cards never clear. They are charged at 20% apr (despite what it says about low rates on goods and transfers).

Capital One in the UK have been outed - how many more?

They way it happens is that even if you pay in full (even automatically by direct debit) then:

it takes 3 days (5 at w/e BH etc) for computers and networks to send the money transfer (Huh?) and any purchases you make (within those three days) register instantaneously. Goods are paid-off first, cash withdrawls take second priority!

Apparently the only clue is a "cash interest" line on the statement and only if you pay in full is that even noticeable. The only way to clear the cash is to ring them-up and specifically state you are clearing the CASH. or not use the credit card for 2 months and pay in full.

Or not use Capital One. - I never have, I pay off in full and never draw cash. If I find MNBA are implicated in Capital One that's me looking for an new card company.

This is morally offensive and legally suspect.


FWIW cash accrues interest from the transaction date (you knew that of course) and those cheques they send, unsolicited, are CASH!!!!

Subject: RE: BS: Credit Card SCAM - by the card companies
From: The Fooles Troupe
Date: 11 Jul 04 - 08:21 AM

Those terms are normal on all Australian Credit cards that I know of.

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Mr Red
Date: 11 Jul 04 - 12:22 PM

what - even the perma-cash? come-on it's unethical - particularly if it remains buried deliberately. I vote with my wallet - I pay for it, ultimately, on the price of the goods.

FWIW in Sweden all such money transfers are credited consistently with the speed of communications - by law. Same day (before 3pm). So should we insist that all credit cards are calculated at 255pm and paid at 3.05 on the day stated?

I don't really care if it is on the statement that there is an outstanding debt - or would be if I gave them the chance. If the customer is not told that he still owes then it is fraud - by definition.

Subject: RE: BS: Credit Card SCAM - by the card companies
From: JohnInKansas
Date: 11 Jul 04 - 12:38 PM

The "Credit Card" industry is, IMNSHO, the most prominent example of the "degeneration of moral values" extant in US business. The entire "culture" of the industry revolves around manipulating the consumer to extract the maximum revenue, by skirting as closely as possible to the "limits of the law," and by deliberate attempts to conceal and obfuscate "special conditions" that are applied to extract additional "costs" and to convert to higher interest rates.

In the US, it is still possible to get a "straight Debit card," with which your purchase is immediately deducted from your "cash account." There is never any "advance" of money. If you don't have sufficient balance to cover a purchase, the purchase is rejected at the point of sale. For most such cards, the seller pays a "processing fee" amounting to a "small percentage" of the amount of the transaction, usually with a minimum "per transaction" on the fee. While this generally works well for the consumer, the seller might feel that it amounts to extortion, as the seller is required to accept a lesser amount on the sale than would be received from someone not using the Debit card.

Some attempts were made when the "Debit cards" were first introduced here to add the processing fee to the "receipt amount" at the time of sale, but lobbying was effective, and in most states it is now illegal for a seller to charge the customer extra for using a debit card. In addition, the seller must sign a contract with the Debit card agencies, and the contracts generally prohibit "charging the user." The result is that sellers now add the cost of Debit card use to the price "posted" for all items so that everyone pays it, whether they use the debit card or not.

The "Debit Card Agency" pockets approximately 5%, or a little more due to the "minimum transaction charge," of all Debit Card sales, as an "accounting fee" for keeping track of someone else's money, with no money of their own at risk.

With the Credit Card, which is actually the older "tradition," when you make a purchase, the "Credit Card people" lend the money for the purchase, and it is added to the balance of your "account." It appears to be little known, but just like with the Debit card, the seller immediately pays 5% of the amount of sale to the Credit Card agency as a "cost of collection," and the Credit Card people get to "keep" 5% of the amount they "loan to you." (The 5% rate may vary, but was the amount quoted to me a few years ago by people in my area.) As with the Debit Card, the seller must sign an agreement that no additional fee will be charged for use of the Credit Card, and that no discounts for cash payments will be offered. Effective lobbying has resulted in the passage of legal restrictions, in most jurisdictions, making it illegal for sellers to "discriminate" against Credit Card users by charging an additional fee, or by offering discounts for cash purchases. (This does not entirely prevent a seller and buyer from making an individual contract of sale, but it has been held that the seller may not ask how buyer intends to pay in making the deal, in many jurisdictions.)

Since the Credit Card people must keep "cash on hand" to cover a month of transactions, to be recovered by monthly payments from users, the 5% "initial transaction" fee charged to sellers amounts to an annual return of 60% on their "liquid cash" asset- effectively paid by sellers but added to the amount the "buyer" owes to the Credit Card company, so that in fact this "charge" is paid, with additional interest, by the buyer.

While it is possible to get a straight Debit Card, doing so usually requires that you go to one of those companies that deals with "high risk" accounts. These same people offer the "assigned balance" Credit Cards, for which you must deposit an amount with them, and they will "loan you" up to the amount of your own money that you put on deposit, and then pay them interest on the amount of your own money that they "loaned" you. MOST mainstream companies that offer Debit Cards issue a combined Debit/Credit card. The "pitch" is that you "won't be embarrassed" if you try to purchase something that's more than you have in your debit account, as they will just treat it as a credit card purchase.

With any combined Debit/Credit card, you must designate, at the point of purchase, whether you wish to make a Debit Card transaction or a Credit Card transaction. Sellers pay higher fees for Debit Card than for Credit Card, and frequently make it deliberately difficult for you, at the "cash" register, to assure that a given transaction will be treated as a Debit and not as a Credit Card transaction. Additional rules apply for designating that a Credit Card transaction is a "sale" and not a Cash Advance, resulting in the majority of such transactions being treated as "Cash Advance" transactions on the "Credit Card" account associated with your card.

In a "Debit Card Rollover" purchase, in which your debit account is insufficient to pay the full amount of a purchase, the entire amount (not just the "shortage") of the purchase will be entered as a cash advance against your credit card.

ALL Credit Card "policies" I've looked at recently charge an "origination fee" for each cash advance transaction. The fee is generally $15 (minimum) for amounts up to about $100, $35 for any amount between $100 and $300 or so, and $35 plus a percentage of the total amount for any "cash advance of larger amount. In addition, "cash advances" are at an interest rate approximately double the rate for "credit card purchases." (Not too long ago, there were a few cards with $5 minimum fees for small cash advances, but I suspect they've "joined the herd" with the prevailing rates by now.)

ALL Credit Card "policies" treat cash advances and purchases as "separate accounts" and calculate separate minimum monthly payments for each. All policies I've looked at permit them to apply any excess, once the "minimum required payment" is made for each account, to the account with the lowest interest rate. As noted in the original posting to this thread, this can make it very difficult to pay off the "cash advance" account with its higher rate. Any advance or other "special" payments you make are automatically treated the same way, going to the balance with lowest rate.

The most flagrant, and abusive, scam has recently been given the name of "Billing Cycle Optimization." All of the "policies" I've seen recently "promise" to mail your statement "within 10 days of the end of billing cycle." All such policies require that your payment be "posted" 10 days before the end of the next billing cycle, but allow them up to "15 days after receipt" for posting the payment you send them. Even if they're "honest" and mail your statement on the 10th day of the next billing cycle, if they wait 15 days after receipt to post it, they have used 25 days of the (30 day?) billing cycle. Since they generally use bulk mail, which can (USPS standards) take 10 days in transit, AT THEIR CHOICE they can make it impossible for you to make the payment on time. EACH late payment is assessed a late payment fee, generally $35 on small balances, and if they can make you late 3 months in a row, they claim the "right" to charge a "penalty" interest rate on all balances you owe of up to as high as (that I've seen) a 35% annual rate.

Financial analysts in my local newspaper, and elsewhere, have "confessed" that the Credit Card companies do make deliberate attempts to "maximize special fees," including "inducing" of late payments with their "Billing Cycle Optimizations." At this point they have not admitted to an intentional effort to force people, in large numbers, to their "penalty rates," although I believe it has been done in fairly large numbers of accounts.

While not long ago it was generally possible just to "jump accounts" to a different credit card, and transfer balances to someone who wouldn't cheat you as flagrantly, all major US credit cards now appear to have their accounts "managed" by CitiBank, and have been more or less "forced" to adopt the same rules. Reliable reports (e.g. Technology Review fairly recently) indicate that 80% of all US credit card statements are processed in the same small village in India where the prevailing pay is on the order of $20 per week – apparently under contract primarily to CitiBank.

Since the principal methods of abuse "pretend" to make it look like it's your fault, the actual abuse by the credit card company may affect your personal credit rating enough to make it difficult to obtain the necessary balance transfer to get a new account – or may just prove that you're "easily abused" and make a new "Card" anxious to get you.

Now if anyone wants my opinion on "rebates" …

John

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Stilly River Sage
Date: 11 Jul 04 - 01:04 PM

With any combined Debit/Credit card, you must designate, at the point of purchase, whether you wish to make a Debit Card transaction or a Credit Card transaction. Sellers pay higher fees for Debit Card than for Credit Card, and frequently make it deliberately difficult for you, at the "cash" register, to assure that a given transaction will be treated as a Debit and not as a Credit Card transaction. Additional rules apply for designating that a Credit Card transaction is a "sale" and not a Cash Advance, resulting in the majority of such transactions being treated as "Cash Advance" transactions on the "Credit Card" account associated with your card.

John, I had understood this to be the other way around. Using the debit card costs the retailer less than using my card on it's credit setting. Either way it comes out of my checking account, but it costs the store less if they let me punch in the PIN instead of offering me a paper to sign.

When my Capital One bill comes it typically contains four sheets of paper, some slick ads, and a return envelope. They give a payment date but it shows that there is no designated balance due on that date. They are in essence letting me "skip a month"--a deadly offer to take up. The trick with this company is to always make a payment, regardless of that offer. Once you skip that month you're bound to make the minimum payment by the deadline, and if your payment is slow to arrive (in other words, late), there is a hefty late fee, along the lines of $40. As long as I make a payment each month in which it shows you don't have to make a payment (yeah, I'm paying it off, I haven't kept it down to a zero balance) then you can get the check there a few days after that date with no penalty.

Anyway, I shred the extra sheets that came with the bill, including the "free" checks and the offers of low-interest loans. I keep the bill and the payment envelope. Captial One may have low interest rates and charismatic commercials, but they're fierce with the fees if you don't stay on top of your payments.

SRS

Subject: RE: BS: Credit Card SCAM - by the card companies
From: JohnInKansas
Date: 11 Jul 04 - 02:03 PM

SRS -

There is some variation in the amount of fees charged for debit vs credit, so it may be different in your area than has been reported in my local rags. I do not use a debit card, so I can't comment from direct experience on the situation here.

One of the essential points is that once they have a "payment due," and can charge you a "late fee," THEY can decide whether you will be late with your payment. If they mail 10 days after the "end of billing cycle." send by bulk mail which may take 10 days in transit, and then "post 15 days after receipt" of your payment as they are permitted by their policy, your payment IS LATE as it can be posted 35 days after the close of the "previous billing cyle," entirely because of THEIR cycle, without your participation.

Unless you have months in your area with more than 35 days in them, we must assume your payment may be posted at least 4 days after the close of the "next billing cycle," which is the usual payment due date. Just for "insurance," many of them require "receipt of payment at least 10 days before the end of the next billing cycle" which can make your payment due date appear before you receive the statement, if they just "happen" to be a couple of days late getting the statement in the mail, or if there "just happens" to be one of those holidays when there's no mail delivery.

Even the "industry mouthpiece" financial analysts admit that Credit Card Companies CAN AND DO manipulate statement mailing schedules to "maximize late fees," and that they consider this an "essential practice" in "maximizing their stockholders profits."

You CANNOT "make sure you always pay on time" because they have the option of making it impossible for you to do so, and THEY DO USE THAT OPTION.

John

Subject: RE: BS: Credit Card SCAM - by the card companies
From: GUEST,Peter from Essex
Date: 11 Jul 04 - 04:48 PM

I am not sure how relevant John's essay is to Mr Red as Kansas isn't in the United Kingdom.

The three/five day cycle for credit clearing is nothing to do with the credit card companies, it is standard for all inter bank credit transactions in England.

There are variations in the way in which different issuers calcualtye interest but all the cards that I have held over the years have been totally up-front about this. You need to compare the terms and conditions of card issuers carefully depending on your inteded pattern of usage.

Subject: RE: BS: Credit Card SCAM - by the card companies
From: harpgirl
Date: 11 Jul 04 - 05:05 PM

I keep only one card and it comes from my local credit union. I pay on it whenever I make a bank deposit. That way I keep ahead of interest charges. This arrangement prevents me from being stung in all the ways illuminated.

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Don Firth
Date: 11 Jul 04 - 05:42 PM

This sort of hanky-panky is not limited to credit cards. I usually receive my cable bill (Comcast) around the end of the month. The bill says that it's due by the 18th of the following month. A couple times, when I mailed my check in on the 11th or 12th (with most business, if the check is postmarked before midnight on the due date, they call it good—at least they used to), the following month's bill had a late charge added to it. I called them on their 800 number and asked them what the hell was going on. Why the late charge when I got it in on time? They informed me that the check takes nine days to process before it appears on their records as paid, therefore, if I want to avoid a late fee, my check had to be there on the 9th, not the 18th. When I screamed my head off and pointed out that this was downright deceptive, I was told to read the fine print in the contract I signed when the cable service was hooked up.

Always new ways to screw the public. Whatcha gonna do? (I'm toying with the idea of checking with the state attorney general's office to see what they say about this practice.)

Don Firth

Subject: RE: BS: Credit Card SCAM - by the card companies
From: harpgirl
Date: 11 Jul 04 - 06:57 PM

Better yet...dump cable TV, Don...

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Don Firth
Date: 11 Jul 04 - 07:20 PM

Problem is, I'm hooked on the Discovery Channel and the History Channel. Can't get those on over-the-air broadcasting. Plus I can get PBS programs on two different channels, generally at different times, so if I miss a program I want to watch (NOW with Bill Moyers or Masterpiece Theatre or Nova), I have another shot at it.

Don Firth

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Little Hawk
Date: 11 Jul 04 - 07:36 PM

Yeah, the credit card companies use every possible stratagem to get people to overspend foolishing and pay whopping interest charges. The sad thing is that so many people fall for it. It is the deliberate encouragement of irresponsibility, and it has been the slippery slope for many people who slid down into personal bankruptcy.

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Bobert
Date: 11 Jul 04 - 07:45 PM

Credit card scam is an oximoron....

Bobert

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Mr Red
Date: 11 Jul 04 - 08:24 PM

This Scam in Britain relies on the transaction latency.

Direct debit is just the British name for a scheme whereby you sign to allow automatic payment of bills that have a variable total. It is done, these days, by computer talking to computer and even if the transaction is done at preset times and after hours it is done in 0.3 of a second. Or 3 working days (which in mathematical terms is a round-up even Roy Rogers would be proud of).

If I elected to pay at my bank & slapped cash on the till and they keyed-in the deal as I watched it would be recieved in 10 seconds, but in accounting parlance, three days.

Sweden has forced the banks to acknowledge that they have been duping the public and holding their money interest free for three days for years. This is money they loan-out on the spot money market overnight at prodigious interest.

British debit cards and credit cards are most often separate and debit transactions cost the retailer more. They prefer credit cards even at the (guess) 3.5% rate. Some big retailers use separate (though indivisable) companies to handle card transactions (not cash) so that if you, perchance, ask for your money back you will get it minus 3.5%. I get cash-back but it probably amounts to .25% above 100 quid a month and .5% above 1000 - easy to see why - heavy users are more likely to spend during the three days and get charged interest during the first month (and not notice). I know every time I change cards the interest free period has reduced.

And they still think it is cute to tranfer debt from card to card at 0% for 6 months and full cash rate for the next (contracted 6 months). I use mine as a method of paying and to simplify my accounting - if it costs me I will use cash.

We have a government "watchdog" that looks at these things - but like any group in the pay of poiticians - it is looking for the vote catcher - this SCAM has not got above the clutter on the radar.

My maxim is - Never trust anyone who makes money out of money.

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Little Hawk
Date: 11 Jul 04 - 08:36 PM

Good for Sweden! The more I hear about Sweden the better I like it.

Subject: RE: BS: Credit Card SCAM - by the card companies
From: GUEST,weerover
Date: 12 Jul 04 - 01:30 AM

Bobert,

I think "credit card scam" is actually a tautology (or perhaps pleonasm).

wr.

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Guessed
Date: 12 Jul 04 - 06:47 AM

haven't they removed pleonasm from the dictionary - it was redundant.

or was that gullable?

Subject: RE: BS: Credit Card SCAM - by the card companies
From: semi-submersible
Date: 13 Jul 04 - 04:31 AM

        My credit unions (in BC, Canada) provide ATM/Debit cards - very handy for rural customers who can't nip 'round to a neighbourhood branch during open hours. No fees for withdrawals at the credit union's own Automated Teller Machines. No fees for deposits at any compatible (usually Interac) ATM. A very modest fee per purchase; a bit more ($1.75 last year, I think) for "outside" cash withdrawals (machines at other credit unions typically charge less).
        When travelling, asking for cash back while buying groceries is the best way to get cash. There's no extra charge to me. Many stores have stopped allowing this. Maybe the store had to pay a percentage to a financial clearing house, but often the clerks direct you to the new in-store cash machine, which charges from $1.50 to $5 (that I've seen) on top of the fee your financial institution charges. Sweet!

        ATM deposits show up in my account balance (earning interest) promptly, but when I go to withdraw money, the deposit is not added to my "available balance" for 10 days. That's good. If I ever deposited a rubber cheque, I wouldn't be overdrawn on account of it. The odd time when I needed to use the deposited money within a week, a phone call to the credit union was enough to get the "hold taken off" - but I had to identify myself, and describe what I'd put in the deposit envelope, then I was duly warned that I'd be liable if the funds didn't come through. Funny they don't do that for cheques you deposit in person or by mail, but at least with those, the staff have had a chance to look them over themselves. You're still liable if they bounce, though.

        On one account I have an attached "line of credit" (pre-approved loan, starting automatically upon overdraft, and ending as soon as you pay it off) but borrowing still costs me. Interest's bad enough, but watch those service charges!
        I occasionally use a credit union Visa or MasterCard which draws on a deposit account, instead of running up a bill. As long as I don't let my account get empty, the card company makes their money off somebody else.
        I heard of one family who keep their credit card inside a block of ice in the freezer. They can use it easily enough - but not without a few hours for second thoughts.

I didn't know I had it so good.

        Oh, by the way, retailers who use electronic point-of-sale not only have to buy the machine and forms, pay a monthly fee, plus a slice of each transaction, they also have to wait a month or two to receive money which was taken from your account within hours! The only reason they handle plastic is that some customers wouldn't buy without it.

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Rt Revd Sir jOhn from Hull
Date: 13 Jul 04 - 05:02 AM

credit cards are a big rip off.john

Subject: RE: BS: Credit Card SCAM - by the card companies
From: CarolC
Date: 13 Jul 04 - 09:39 AM

I've gotten solicitations from credit card companies with so many fees attached to the process of accepting and activating the card that, had I done so, I would have been in debt to the credit card company before I ever even used the card.

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Stilly River Sage
Date: 13 Jul 04 - 12:23 PM

Check your credit rating at least once a year to see who is making inquiries about your credit. The credit bureaus have to make a note any time they send your name on a list of folks with good credit. For many years now I've had a standing order with all of them not to sell my name on those lists. If you ever get a card solicitation that says you're "Pre-Approved" then your information was probably sold by the credit bureau.

A lot of time the inquiries they get are a standard feature of other creditors you work with. The mortgage company will regularly check to see if your other bills are paid on time. But if you pull into a car lot and the salesman decides to run your plates and in turn run your credit before you've even stepped in the door, you'll know about that, also. I don't know if there is a lot you can do about that, except to park where they can't see your plates easily. Too many of those inquiries on your account can give a false positive of some sort, I've been told. This is a gray area, but it does apparently exist.

SRS

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Marion
Date: 13 Jul 04 - 12:43 PM

SRS, how do you check your credit rating?

Marion

Subject: RE: BS: Credit Card SCAM - by the card companies
From: JohnInKansas
Date: 13 Jul 04 - 03:33 PM

There are three "Credit Bureaus" in the US. To get full information you need to get a report from each of them.
They may impose a fee, although there was a proposal to require them to give people one per year without charge. I don't know if that passed.

If you are "refused credit based on a credit bureau report," they are required to give you a copy.

I haven't checked the links out, but from a recent report on credit card fraud:

Credit Bureaus
Equifax (www.equifax.com)
To order a report, call 800-685-1111; to report fraud, call 800-525-6285.
Experian (www.experian.com)
To order a report or report fraud, call 888-397-3742.
TransUnion (www.transunion.com)
To order a report, call 800-888-4213; to report fraud, call 800-680-7289.

John

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Stilly River Sage
Date: 13 Jul 04 - 04:18 PM

Marion,

Here in the U.S. you can write away at least once a year and get your rating from the agencies John mentioned for little or no cost. Supposedly they all have the same information, but that isn't necessarily the case. A strategy to keep an eye on it through the year would be to write to a different company every four months and get your rating from them. Some of them have an annual fee (about $60, maybe more--more than I want to pay, at any rate) and you can check it out any time online. There are the usual provisions--if you've been denied credit based on a report, you can contest it and you don't have to pay for the report, etc.

Equifax will notify the others if you contest any rating with them and it is resolved. I don't know if the same applies with the other two.

I don't know what the Canadian laws say about credit and agencies there. With the way credit information creeps through everything to do with everyday life, it certainly would be a good idea to find out!

SRS

Subject: Credit Card Companies Borrow More Money.
From: GUEST
Date: 10 Dec 04 - 09:18 PM

12-10-2004

I been told that allto of Credit Card Companies has Forged/Fraud of Credit Line Limits for example if your limit is $6,000.00
Credit catd company will Forged as half will say $3,000 on your credit card they keep the $3,000.00

I would like to get more info on this or website of this discuss of this matter.

You can email me here...

[e-mail]

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Stilly River Sage
Date: 10 Dec 04 - 09:42 PM

Not sure what you're asking, GUEST. Mudcat isn't precisely the place to get financial information, but some of the members discuss these matters among themselves. Get yourself over to Google and do a keyword search on the issues that concern you.

Do be cautious about some of the "free" credit counselling companies. I hear many of those are set up by the credit card companies themselves, so they can flag, early on, customers who might be in trouble. Check around to find any that are truly non-profit and non-affiliated. Good luck in your research.

I've recently set up my accounts on Microsoft Money. After uninstalling it from new computers or tossing it when it came my way, I finally listened to a coworker's reasons for using it, set it up, and I agree with him: it helps manage your money. You keep track of when bills are due, and you're less likely to look at a source of income as money to burn, when you know precisely what bills it has to satisfy. It is also mildly entertaining, which keeps me coming back. :)

SRS

Subject: RE: BS: Credit Card SCAM - by the card companies
From: LilyFestre
Date: 10 Dec 04 - 10:28 PM

Credit cards suck....they suck you right in and now you beloing to them forever more. I can't even begin to tell uyou how many cares I ge t sen t in a weekl trash trah rrash

Subject: RE: BS: Credit Card SCAM - by the card companies
From: GUEST
Date: 11 Dec 04 - 03:50 PM

I understand here in the USA ( I don't know if this applies to other parts of the world as well) the proposal to require credit bureaus to provided consumers with a free credit report once a year has passed. You have to ask for it. They're doing it by month according to where you live. Californians can get their free credit report this month (December)....here's a link to the article

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Stilly River Sage
Date: 11 Dec 04 - 10:53 PM

If you listen to the Motley Fool on National Public Radio they talk about getting reports from the big three companies alternately a few months apart, to check them against each other. I notice that an upgrade to Microsoft Money 2005 comes with a year's membership (Equifax, I think). There are any number of ways to keep track. There are patterns of theft when cards are stolen--such as right after the card goes missing, or waiting until the first of the month (if your paycheck was directly deposited), and sometimes even waiting a year then reinstituting the theft, when you're less vigilant.

Amazon had a very tempting offer recently--$30 off of your next purchase of $30 or more, to get their credit card. The interest rate isn't competitive (about 13%) but they offer points. What you pay in interest far surpasses what you get with those points, though. If you can make that one purchase then put the thing in the drawer and never use it again, you gain. They're banking that you won't do that.

SRS

Subject: RE: BS: Credit Card SCAM - by the card companies
From: kendall
Date: 12 Dec 04 - 08:10 AM

I hate credit cards, but you can't even rent a car without one. So, I use one but I pay in full and on time so they get no interest from me. I'm what they call a "convenience customer". Keep an eye on them, they are not to be trusted. When I first took out my MBNA card, the due date was the third of the following month, but slowly they kept moving the due date until it is now the 27th of the CURRENT month. I'm sure they were hoping I wouldn't notice and would make a late payment.

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Nerd
Date: 12 Dec 04 - 10:49 PM

What nobody has mentioned is that there is a smart way to use credit cards so that you actually make money from them. As Kendall suggests, you pay the card off on time, and pay it off completely. Then, you do not pay any interest or fees at all (as some of you above erroneously suggested). Not only that, you have gotten an interest free loan from the time of your purchase until the time of your payment. If you manage your money well, it is sitting in the bank earning interest after you've already bought stuff with it! Until you pay off the card company.

In some ways, it's true that you pay for the existence of credit cards, because sellers do increase prices to cover the costs of accepting credit cards. But you pay those higher prices whether you use credit cards or not. And it's not as dire as John in Kansas suggested; sellers do not charge everyone the extra money that it would cost them if the purchase was made by credit cards; rather, they charge you the average extra cost; so if the credit charge they pay is 5%, and 1/5 of their purchases by dollar amount are done by credit card, you pay 1% per transaction.

If they aren't doing it this way, but charging 5% on every transaction whether you use a card or not, it's not the credit card company's fault but the seller's. Then THEY are ripping you off, using the credit card fee as an excuse to milk more profits out of you.

Credit card companies ARE tricky, but it's usually possible to stay on top of them and do fine. I have never paid a late fee because the bill arrived so late it was impossible to pay on time, for example, the scenario John in Kansas brings up.   This may be theoretically not illegal for them to do, but credit card companies have to keep customers happy too. If this happened routinely people would drop the card in question. I have also found that most fines and fees that were unreasonably applied for whatever reason are reversible if you call them up and talk it over--sometimes it requires something like a letter from your bank if it is over an electronic payment from your bank account, etc. But it's almost always possible to reverse them. The ones that can't be reversed are the ones that were your fault in the first place.

So don't trust credit card companies, but don't just throw out your cards, either. Discipline and money management are what it's all about.

Subject: RE: BS: Credit Card SCAM - by the card companies
From: Stilly River Sage
Date: 12 Dec 04 - 11:03 PM

Good points, Nerd. I will offer the observation that we usually intend, and often attempt, to put these good practices you describe into operation. The credit card companies are banking on our lack of discipline to make their money. Credit card companies (if there are any pure plays) are probably a great place to put some of your investments (if you have any cash left over after paying your bills!)

SRS

Subject: RE: BS: Credit Card SCAM - by the card companies
From: NH Dave
Date: 13 Dec 04 - 01:21 PM

While credit cards seem more of a scam in your home town, they do present a real help to those traveling since they neither have to carry great gobs of money or try to pay by check. Just try to pay a bill be check when you are out of our local area or in a place where you are unknown.

When I was a customer of Barclay's Bank in Ipswich, I had difficulties cashing a check from my branch, in one of the branches across town, without setting up an agreement to do so, in advance. BUT by the same token, when I visited The Isle of Man for the TT races, I prearranged the cashing of checks up to the amount of fifty pounds with their Douglas branch, and was given a letter to that effect by my local bank.   Had I elected to use my Barclay's (VISA) Card to pay for my purchases or debit money from my account, I would have been just another tourist over there.

Today, managing a small convienence store, I generally run Debit/Credit cards as credit cards unless asked to accept them as debit cards, because most companies charge a small fee for using their cards as debit cards at point of sale outlets, the same way as they charge for getting money out of ATM machines that they do not own or run. When used as a credit card I believe my company is charged a small fee for "loaning" us the money when these cards are used as credit cards.

Dave

Subject: RE: BS: Credit Card SCAM - by the card companies
From: GUEST,petr
Date: 13 Dec 04 - 07:54 PM

frontline recently had a good documentary on the credit card industry
and it was scary.
the average US family carries about $8000 credit card debt.

of course they love it if you just make the minimum payments,
people think they are being financially responsible if they make
them. the only trouble is that if you just made minimum payments it would take you 35 years to pay off your balance.

the credit card companies hate people that pay off their bills on time, they call them 'deadbeats' as they make no money off them.

btw they share information with each other so while you may sign on with a new card that has a low interest for a few months, if you happen to be late on your hydro, they can and will find out and change your rate. (thats in the small print too, the fact that they share credit info)

also the cards that offer a low interest or even zero interest for 1st 6 months, are just a scam, as soon as there is any late payment
or you miss some other payment such as hydro, they will jack up the rate. And they will play around with the due date, as mentioned above.

one company in the US targeted those with bad credit, who couldnt get any other cards, they were ultimately shut down because of all the complaints. People were always charged a late fee and penalties, the company would hold off on the payment as long as possible.
But it was due mainly to a feisty District attorney who got involved.

in short: dont carry a balance, pay your bills off early, and overpay if you have to.

also helps to sit down for one month or two, and keep track of all your expenses. It will surely give you a good idea of how much you spend and how much you can save.

Finally, I run a business and I have more and more people paying with credit cards, even other businesses (for the points). I much prefer if people pay by debit card, as there is only a 15 cent transaction fee, whereas a credit cards are around 3.5% (visa/mc) 4.25% for amex. Thats 3or 4points that comes off my invoice, not to mention the
monthly charges, $50 or so for the imprinter, and other cards like MC charge $15 per month.
And of course business is pretty competitive so the credit card cost only comes out of my pocket, its not an extra expense I can add to the price.