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1000+ Penny Miser Member
USA
3121 Posts |
 Posted - 05/19/2009 : 13:28:37
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---> Come to the new and improved realcent: http://realcent.org
The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.
– Theodore Roosevelt
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Neckro
1000+ Penny Miser Member
Saudi Arabia
2080 Posts |
Posted - 05/19/2009 : 13:57:47
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| I never pay my bill on time. It's about time someone else pays for my irresponsibility! |
Trolling is an art. |
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moboman
1000+ Penny Miser Member
USA
2555 Posts |
Posted - 05/19/2009 : 15:09:59
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quote:
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.
A free ride for those that pay off on time! What a lie. Stores have to raise prices 3-4% to cover the credit card company fees. That's not a free ride. Stores pass the fees right to the consumer, this hurts those of us that pay cash for everything too. The person that wrote this article is obviously a moron.
I wish there was somewhere to comment under the story. |
"99% of all lawyers give the rest of them a bad name" 
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
 Posted - 05/19/2009 : 15:40:47
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I dare them to try it. They will lose their store paid fees at a rapid pace as all the "cheapskates", like myself, switch to cash only shopping.
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Cerulean
Penny Hoarding Member
USA
993 Posts |
Posted - 05/20/2009 : 13:49:29
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This is an interesting dilemma for card issuers.
As I see it, there are three tiers of card users: the Deadbeats, the Carriers, and the Freeloaders.
Deadbeats run up high balances, and get charged lots of fees and interest, but they're also likely to miss monthly payments or go bankrupt, so the issuer sees a large risk in actually collecting revenue from such a user. They use credit out of necessity, lacking enough savings to make immediate purchases. Credit is their crutch, for the never seem to have any money in reserve.
Carriers keep a monthly balance, too, but they manage to keep up with monthly payments. They struggle to pay down the balance, and it frustrates them to see their pay-off efforts be negated by an equal amount of new fees and interest. For the Carriers, credit was once useful, but has now become a burden. They could afford to stop using the card, but quickly find themselves pulling the card out at the register anyway.
Freeloaders use the card very frequently. They pay off their balance every month, so they don't have to worry about interest payments. Many use cards without an annual fee. In effect, their credit card is proxy cash, a mere convenience. It frees them from carrying large amounts of cash, and from making ATM withdrawals. In fact, Freeloaders probably don't carry cash at all. They don't need credit, but they find it safer and more secure than cash.
Issuers make their money off of Carriers. Forget the Deadbeats; they're too insolvent to pay up. Deadbeats bring in revenue but also put issuers theough the costs of colletion agencies and legal expenses. And forget the Freeloaders; they know how to avoid the fees and interest, and their revenue is negated by incentive program rewards. It's the Carriers who dutifully pay fees and interest with enough certainty of solvency to keep issuers in the black.
As issuers lose more Deadbeats and Carriers to recessionary woes, they find that their reliance for income falls increasingly on the least likely beasts of burden, the Freeloaders. But Freeloaders will flee credit if they have to pay too much for what they see as a mere convenience. Press the Freeloaders too hard and they'll jump ship. But somebody has to pay for all the lost Dadbeats and Carriers. Who else is there?
Well, issuers could try to squeeze larger transaction fees from retailers. This could easily backfire. Retailers would refuse to raise prices in a recession, one in which steep discounts aren't moving merchandise. Any attempt to pass along the added cost to the customer, or to eat it out of profit margins, will lead to the reduction in retailers from which to collect transaction fees. Speaking of the Recession, there are far fewer transactions happening, period. It's just like the dilemma with losing card users. Push to hard, and issuers could see an exodus of retailers, too.
(In Europe, retailers do pass the transaction fee on to customers who use credit.)
I don't see any way out of this for issuers. Times have changed, and thier very business model depended on cheap credit and spendaholic shopping, neither of which will return for a long while.
The outcome I want to see is for credit cards to return to their pre-1980 status, as fiscal tools of last resort used only by responsible consumers with outstanding credit scores... not as a surrogate for cash or savings. |
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We cannot afford this government.
Cerulean's Standing Offer: $3/lb shipped for foreign coins |
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El Dee
Penny Hoarding Member
USA
547 Posts |
 Posted - 05/20/2009 : 14:39:43
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quote:
Originally posted by Cerulean
I don't see any way out of this for issuers. Times have changed, and thier very business model depended on cheap credit and spendaholic shopping, neither of which will return for a long while.
They'll go bankrupt, then ask for a bailout.
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Trust the government? Ask an Indian. |
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AGgressive Metal
Administrator
USA
1937 Posts |
Posted - 05/20/2009 : 15:05:24
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quote:
Originally posted by El Dee
quote:
Originally posted by Cerulean
I don't see any way out of this for issuers. Times have changed, and thier very business model depended on cheap credit and spendaholic shopping, neither of which will return for a long while.
They'll go bankrupt, then ask for a bailout.
Yuck, this is too true. |
And he that hath lyberte ought to kepe hit wel / For nothyng is better than lyberte / For lyberte shold not be wel sold for alle the gold and syluer of all the world.
-Caxton's edition of Aesop's Fables, 1484 |
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swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 05/20/2009 : 15:23:45
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This is what happens when governments get involved--- those that have the means and acted responsible are punished.
This is true in financial matters, health care, and so on. The answer is to get the government out of stuff.
We got suckered into TARP because of FDIC. You let Citi go under, and it cost the US government more than $700B in FDIC and tax revenue. That is the problem with all these programs... The taxpayer is on the hook in so many ways.
Auto industry is another example. The fear is that those pension plans are going to get dump on the US government in bankruptcy. That was the major selling point of bailing them out. That was a mistake bc they weren't savable. The banks were to a degree.
We, as taxpayers, keep getting stuck with crappy choices... Lose X with Plan A or Lose X with Plan B?
-SWUSC |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 05/20/2009 : 18:22:51
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Credit cards are for chumps.  |
"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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Country
1000+ Penny Miser Member
USA
3121 Posts |
 Posted - 05/20/2009 : 18:46:27
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quote:
Originally posted by Delawhere Jack
Credit cards are for chumps.
Why do you think credit cards are for chumps? |
---> Come to the new and improved realcent: http://realcent.org
The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.
– Theodore Roosevelt
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Copper Catcher
Administrator
USA
2092 Posts |
Posted - 05/20/2009 : 19:13:55
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Oh no...you mean I have give this up now! LOL
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Copper Catcher
Administrator
USA
2092 Posts |
Posted - 05/20/2009 : 19:19:57
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Spend your Airline Frequent Flyer Point and your AMEX Membership Reward Points Now! You know what they say:
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keys
Penny Collector Member
383 Posts |
Posted - 05/21/2009 : 17:48:30
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GM at one time issued a GM Mastercard and offered it with no annual fee.
Later they changed it and added an annual fee.
GM Cardholders cancelled their GM Credit cards en masse.
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I would suspect that cardholders will migrate to the best deal/no annual fee/lowest interest rates, resession or not.
With the internet and sites that show what bank offers no annual fee/lowest interest rate, credit card holders will look for the best deals and send their high fee credit cards into the shredder After cancelling them first.
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Credit reform’s downside
The new credit card fees and interest rates that could throw you for a loop
1 No more grace periods.
Thomas J. Fox, Community Outreach Director of Cambridge Credit Counseling, says many companies will likely start charging interest the moment a purchase is made.
2 Reinstitution of annual fees.
“In the short run, everyone’s going to pay more for credit,” says Gene Truono, the former head of compliance at Chase Cards. Fox adds there will be an annual fee to keep your account open.
3 Difficulty for low-credit consumers.
Truono warns that those with bad credit will suffer most from increased annual fees and the lack of interest rate caps.
4 Increased marketing efforts.
“Banks have very sophisticated profitability models related to utilization and encouraging utilization,” says Truono, “so they have marketing programs to sell products and services.” Expect creditors to make up for lost profits.
5 Credit card anarchy for the next nine months.
Since creditors have nine months to implement these rules, now is their last opportunity to take advantage of soon-to-be illegal traps like double billing cycles and arbitrary rate increases, says author of “Zero Debt: The Ultimate Guide to Financial Freedom,” Lynnette Khalfani-Cox.
6 You may pay less when using cash or debit.
A report from the Wall Street Journal indicates that legislators are looking to lift a ban that many credit card companies impose of businesses, forbidding the vendor from offering discounts for paying by cash or check.
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Remember the days when paying for gas with cash was cheaper than using a credit card? If #6 becomes law watch as cardholders swithc to cash, debit cards or checks (There is an instant check verification system in existance. I once watched it in action as a customer paid for car repairs with a check.)
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I change with the times-
but like silver coins found in your change
I stay the same.
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The United States of America started out as the new Republic of Rome.
Will The United States of America end up as the New Imperial Rome? |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 05/21/2009 : 18:32:42
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quote:
Originally posted by Country
quote:
Originally posted by Delawhere Jack
Credit cards are for chumps.
Why do you think credit cards are for chumps?
Oh, I don't know....exhorbitant interest rates, late fees (after they change the due date with no notice), that sort of thing.
The world got along just fine for thousands of years without them....
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"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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El Dee
Penny Hoarding Member
USA
547 Posts |
Posted - 05/22/2009 : 10:30:18
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quote:
Originally posted by Delawhere Jack
quote:
Originally posted by Country
quote:
Originally posted by Delawhere Jack
Credit cards are for chumps.
Why do you think credit cards are for chumps?
Oh, I don't know....exhorbitant interest rates, late fees (after they change the due date with no notice), that sort of thing.
The world got along just fine for thousands of years without them....
And merchants need them, because chumps buy things they otherwise couldn't afford.
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Trust the government? Ask an Indian. |
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Country
1000+ Penny Miser Member
USA
3121 Posts |
 Posted - 05/22/2009 : 10:58:53
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quote:
Originally posted by Cerulean
This is an interesting dilemma for card issuers.
As I see it, there are three tiers of card users: the Deadbeats, the Carriers, and the Freeloaders.
Freeloaders use the card very frequently. They pay off their balance every month, so they don't have to worry about interest payments. Many use cards without an annual fee. In effect, their credit card is proxy cash, a mere convenience. It frees them from carrying large amounts of cash, and from making ATM withdrawals. In fact, Freeloaders probably don't carry cash at all. They don't need credit, but they find it safer and more secure than cash.
If you're part of the Freeloader group, credit cards are used for convenience. Freeloaders with good credit get CASH back from their credit card purchases. The Freeloader is not a chump, they are smart and get CASH back.  |
---> Come to the new and improved realcent: http://realcent.org
The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.
– Theodore Roosevelt
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Edited by - Country on 05/22/2009 11:06:20 |
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Neckro
1000+ Penny Miser Member
Saudi Arabia
2080 Posts |
Posted - 05/22/2009 : 14:04:13
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| I only use my credit card for the cashback reward. Out of the 5yrs I have had one. I haven't paid a penny to them in fee's |
Trolling is an art. |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 05/22/2009 : 17:28:55
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quote:
Originally posted by Country
quote:
Originally posted by Cerulean
This is an interesting dilemma for card issuers.
As I see it, there are three tiers of card users: the Deadbeats, the Carriers, and the Freeloaders.
Freeloaders use the card very frequently. They pay off their balance every month, so they don't have to worry about interest payments. Many use cards without an annual fee. In effect, their credit card is proxy cash, a mere convenience. It frees them from carrying large amounts of cash, and from making ATM withdrawals. In fact, Freeloaders probably don't carry cash at all. They don't need credit, but they find it safer and more secure than cash.
If you're part of the Freeloader group, credit cards are used for convenience. Freeloaders with good credit get CASH back from their credit card purchases. The Freeloader is not a chump, they are smart and get CASH back.
Ok. Maybe I was using too broad a brush there. Let me rephrase it. Those who use their cards for impulse purchases, and carry a balance......Chumps.
Years ago I did some locksmith work at the house of the #2 man at MBNA. The bathroom in the basement must have cost as much as my entire house... Coffered hardwood ceiling, Italian marble counters, vanities that where built to the highest furniture standards...
Amazing what usury can buy.
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"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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Credit Card Industry to Profit From Good Payers
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