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[P]
Dispelling Some Myths About Credit Cards

By Delirium in Op-Ed
Thu Aug 21, 2003 at 11:27:09 PM EST
Tags: etc (all tags)
/etc

Periodically, various scary myths about credit cards begin to be circulated, and having seen this in a number of locations, I've decided to write a short article dispelling some of them. As an added benefit, this should also serve as a "how to use credit cards without getting screwed." As with many myths, the ones about credit cards do come from some true stories, but they're ones that are quite easy to avoid if you know what you're doing.

Now you may say "a debit card is better anyway, so why should I care?" I disagree, so a secondary focus of the article will be to explain why credit cards are preferable, in many cases, to debit cards.


Please note that this discussion is intended to apply only to the United States. As the advantages and disadvantages of credit card and debit card usage are highly dependent on the financial system and laws of a country, quite different principles may apply elsewhere.

"Credit Cards Are Expensive"

This should not be the case at all -- credit cards can in fact be entirely free. I certainly don't pay anything at all to my credit card company beyond what I actually charge on the card (plus the cost of a stamp to mail payment for the bill), and there's no reason you should either.

There are of course some expenses one could incur through unwise use of credit cards, but these are fairly easily avoided:

  • Yearly Fees: These can range from $50/year to over $400/year (for some fancy American Express Platinum cards). These may be worth it for some of the high-end cards like American Express that come with many ancillary services, but if all you want is a credit card, don't pay any yearly fees. Keep reading those offers as they come in, and you're bound to find plenty of cards that have no yearly fee. Many Visa and MasterCard issuers charge no yearly fee, and American Express's "Blue" card does not either.
  • Interest: This is the biggest problem with people's use of credit cards, but is again easily avoided. Simply treat your credit card as if it were a bill that must be paid, and ignore the "credit" part of the name. When you buy things on it, pretend it was a debit card or cash, and only spend money you actually have. Then pay the bill in full when it comes, and you'll pay no interest at all.

    A word of warning, however: that there are some unscrupulous credit card companies with whom this is not possible. Before signing up for a card, carefully read the terms to make sure there is a "grace period" (generally 14-21 days). If there is, you can pay the bill within this period and incur no interest at all. A few cards lack grace periods; with these you pay interest starting from the date of purchase (not the date the bill is sent), regardless of whether you pay the bill on time or not. Avoid these cards.

The summary to using a credit card for free: Get a card with no annual fee and at least a 14-day grace period. Then pay your bills on time, and you'll never pay anything more than your bill.

"Credit Cards are Insecure"

This is simply untrue. In the United States at least, there are strong protections in place for cardholders.

  • Theft: Under US law, the cardholder is responsible for no more than $50 of charges made to a stolen card, even if the theft isn't reported right away and thousands of dollars have been charged in the meantime. Timely reporting can even avoid this $50, as the holder is not responsible for any charges at all made after the card is reported stolen (it's considered the responsibility of the credit card company to deactivate the account as soon as it's reported stolen). Some credit card companies, especially "Platinum" level cards, also waive the $50 and take full responsibility for any charges to a stolen card. Furthermore, the $50 only applies if you physically lose your card -- if someone steals your number but not the physical card, you're not responsible for any charges. But in any case, by law $50 is the absolute maximum you can possibly lose from a stolen card.
  • Fraud: The credit card dispute-resolution procedures are heavily tilted in favor of the cardholder. Simply registering a dispute automatically puts the charge on hold, and you don't have to pay it until the dispute is resolved. The burden of proof in resolution is primarily on the charger, not the cardholder -- they must produce evidence that the charge was authorized by the cardholder, and that the services paid for were rendered. This is a notorious complaint of anti-spam ISPs (they almost never succeed in collecting on their "we'll charge your card $500 in spam clean-up fees if you spam from our account"), but it works well for cardholders. You're doubly protected online, because the credit card companies require a higher standard of evidence from the charging party in cases where they don't actually have the cardholder's signature on the transaction.

But Why Not Just Use Debit?

There's quite a few reasons I consider a credit card, when properly used, to be preferable to a debit card.

  • Fraud and Disputes: With a credit card, disputing a charge automatically puts it on hold, and you don't pay pending resolution of the dispute. With a debit card, your money has already been debited, and you generally don't get it back until the dispute has been resolved in your favor. If the disputed amount is large, being out the money for the weeks it takes to resolve a dispute may be undesirable.
  • Security: If you lose an ATM or Debit card and report it within 2 days, you're covered under the same $50 limit as with credit cards. However, if you don't notice for 3 days, the limit becomes $500. There is the added security of a PIN number to balance this, but in the US at least, this can easily be circumvented with most cards by simply using the debit card through the credit card charging system (e.g. by making online orders, which generally don't ask for PIN numbers). With a credit card, you can never be out more than $50. With a debit card, you could well be out $500 if you don't notice for three days, and someone has gone nuts on newegg.com in the meantime. And, as with the disputes, there's also the issue of who fronts the money in the interim. When you report a credit card stolen, all the charges are put on hold. When you report a debit card stolen, you don't get your money back right away, until the "stolen card" procedures and paperwork are completed. So even if your liability ends up being only $50 (or $500), you could be out the entire balance of your bank account in the interim.
  • Financial benefits:
    • Delayed payments: Credit cards on average let you keep your money for around two weeks before you actually have to pay for your purchase on the next monthly bill. If you make a lot of purchases, and keep your money in interest-bearing accounts until payment, this can make you, over time, quite a bit of extra interest (though moreso during periods when interest rates are a bit higher than they are now).
    • Cashback: Many credit card companies have programs whereby they give you back some percentage (usually 1 to 1.5%) of the cost of your purchases to encourage you to use the card more. If you make a lot of purchases, this can add up nicely.
    • Platinum benefits: If you have a platinum card (they're quite easy to get for free if you have good credit), they come with a number of added benefits, such as supplemental warranties for items purchased on the card, rental insurance for car rentals paid for with the card, and so on.
  • Building a Credit Rating: Using a credit card responsibly for some time builds a credit rating, while using a debit card (or paying cash) doesn't. This is useful if you plan at some point to take out loans of any sort (whether to buy a car, mortgage a house, or start a business).

In short, a credit card does not have to be expensive, or put you in debt, or any of the other normally negative connotations associated with it. When used properly, essentially as a delayed debit card, it is entirely free, can have some side benefits, and gives me a greater feeling of safety -- the process of "charge things on the card, then review the bill, then pay it if nothing is amiss" strikes me as safer than the process of "charge things on the card, then review the list of debits, then try to get my money back if something is amiss."

Obligatory note: I don't work for credit card companies, banks, or anything in the financial industry at all. In fact, credit card companies generally don't want you to use your credit cards like I've suggested, because interest on carried balances is where they make much of their profit.

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Poll
I use:
o A credit card exclusively 25%
o A debit card exclusively 31%
o Sometimes one, sometimes the other 33%
o Neither 10%

Votes: 148
Results | Other Polls

Related Links
o Also by Delirium


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Dispelling Some Myths About Credit Cards | 343 comments (329 topical, 14 editorial, 0 hidden)
good stuff (4.50 / 2) (#2)
by circletimessquare on Thu Aug 21, 2003 at 07:40:30 PM EST

here's another one for you:

"Never use your Credit Cards on the Internet"

I certainly don't pay anything at all to my credit card company beyond what I actually charge on the card (plus the cost of a stamp to mail payment for the bill), and there's no reason you should either.

you use stamps? i have been banking online since it was dial up directly to the bank. i don't think i have licked the back of a stamp to mail a bill to anyone in 10 years. i couldn't imagine that arcane existence. as long as it is https folks, go ahead and do your shopping/ banking online, and don't fret one bit about security, unless your paranoid schizophrenia is of a certain level.


The tigers of wrath are wiser than the horses of instruction.

no, *YOU'RE* a moron !!!! /nt (1.73 / 19) (#7)
by rmg on Thu Aug 21, 2003 at 08:01:05 PM EST



_____ intellectual tiddlywinks
[ Parent ]

lol stalker... get a girlfriend ;-P (nt) (1.83 / 6) (#30)
by circletimessquare on Thu Aug 21, 2003 at 10:08:48 PM EST



The tigers of wrath are wiser than the horses of instruction.

[ Parent ]
wow, circletimessquare, (2.50 / 8) (#38)
by rmg on Thu Aug 21, 2003 at 11:34:40 PM EST

you're a veritable fountain of wisdom.

as a matter of fact, i think i will.

you've changed my life. i'll never forget you.

_____ intellectual tiddlywinks
[ Parent ]

ego-stroking is nice (2.33 / 6) (#45)
by circletimessquare on Fri Aug 22, 2003 at 01:49:11 AM EST

when it is done by you to yourself, in the privacy of your own bedroom, thank you very much

The tigers of wrath are wiser than the horses of instruction.

[ Parent ]
shh... (1.80 / 5) (#53)
by rmg on Fri Aug 22, 2003 at 02:37:46 AM EST

they already think i'm turmeric...

we don't want them thinking i'm you too...

_____ intellectual tiddlywinks
[ Parent ]

you're not turmeric (2.00 / 4) (#55)
by circletimessquare on Fri Aug 22, 2003 at 02:53:00 AM EST

way too friendly

The tigers of wrath are wiser than the horses of instruction.

[ Parent ]
that's me, rmg the friendly troll !! /nt (2.00 / 4) (#57)
by rmg on Fri Aug 22, 2003 at 02:59:16 AM EST



_____ intellectual tiddlywinks
[ Parent ]

It is official; Netcraft confirms (2.00 / 5) (#42)
by grouse on Fri Aug 22, 2003 at 01:29:06 AM EST

circletimesquare is a bigger moron than rmg. You heard it here first!

You sad bastard!

"Grouse please don't take this the wrong way... To be quite frank, you are throwing my inner Chi out of its harmonious balance with nature." -- Tex Bigballs
[ Parent ]

you like me! you really like me! (nt) (2.57 / 7) (#46)
by circletimessquare on Fri Aug 22, 2003 at 01:52:56 AM EST



The tigers of wrath are wiser than the horses of instruction.

[ Parent ]
hold on let me setup a store for you to visit (nt) (2.00 / 4) (#40)
by geekmug on Fri Aug 22, 2003 at 12:51:46 AM EST


-- Why reinvent the square wheel?
[ Parent ]
fret just a little (5.00 / 1) (#64)
by muirhead on Fri Aug 22, 2003 at 04:27:21 AM EST

and don't fret one bit about security

You not immune to fraud, but you are reasonably protected. On the other hand once you get a track record as a card fraud victim you end up paying.

[ Parent ]

Stamps... (none / 0) (#79)
by Noodle on Fri Aug 22, 2003 at 09:34:12 AM EST

...haven't been lick-and-stick for about ten years, anyway.  They come glued to a sheet of wax-paper now; all you have to do is peel and place.

{The Nefarious Noodle}
[ Parent ]

that probably explains... (none / 0) (#130)
by fishling on Fri Aug 22, 2003 at 01:18:36 PM EST

...why so many of them end up stuck to his tongue instead.

[ Parent ]
Windows-only online banking (none / 0) (#114)
by pin0cchio on Fri Aug 22, 2003 at 11:50:05 AM EST

i have been banking online since it was dial up directly to the bank.

Some people can't afford the proprietary terminal that many banks require. This proprietary terminal is an x86-architecture PC with Microsoft Windows brand operating system and Microsoft Internet Explorer brand web browser. They also cannot afford to switch banks because their town has only one bank with ATMs within walking distance of home.


lj65
[ Parent ]
You, sir, need to move. (nt) (1.00 / 2) (#295)
by scanman on Mon Aug 25, 2003 at 12:10:12 PM EST


"[You are] a narrow-minded moron [and] a complete loser." - David Quartz
"scanman: The moron." - ucblockhead
"I prefer the term 'lifeskills impaired'" - Inoshiro

[ Parent ]

You, sir, need to pay me $200,000. (none / 0) (#324)
by pin0cchio on Thu Aug 28, 2003 at 06:42:56 PM EST

Moving costs: money to buy a house, money to set up utilities, money to move my stuff, time and money to build a web of trust to replace my family, etc. In 2003, are most technology companies willing to pay such relocation costs when hiring 4-year computer science graduates?
lj65
[ Parent ]
Don't use those banks (none / 0) (#338)
by emschwar on Tue Sep 02, 2003 at 08:49:29 PM EST

Who are these banks with Windows-only access? My online bank works great with every browser I've thrown at it, including links-ssl. My credit union's sucks slightly more, since they use lots of useless JavaScript, but I can use it just fine with Mozilla, even so. Citibank's works fine as well, as did RBC's brief abortive attempt at online banking.

As for ATM fees, my bank refunds up to $6 or so of ATM fees per month (haven't run up to the limit yet), so I can use pretty much any ATM anywhere, and know that I'll get that $1.50 or so back at the end of the month. Yes, I'm paying a (very) small amount of interest for the convenience, but given how low personal account interest rates are these days, that's not worth worrying about.

Gomez.com rates various online banks. Pick the top 5 or 10, and I'll bet they work fine with any browser you care to use.



[ Parent ]
There are solutions to that problem (5.00 / 1) (#216)
by kcbrown on Sat Aug 23, 2003 at 04:37:39 AM EST

...but unfortunately, very few card companies implement them.

Citibank, for instance, will let you generate a virtual credit card number for each purchase. I'm not sure, but I think it's either limited to one transaction or you can place a dollar limit on the virtual number to minimize the damage if the number is compromised.

It's the best answer I've seen to the problem of online credit card purchases. I just wish more credit card companies would implement it.

I think the reason the credit card companies generally don't bother to eliminate credit card fraud is that they don't really lose any money from such fraud: someone else pays for it. Indeed, it wouldn't surprise me at all if the merchants ended up paying the transaction fee for each fraudulent transaction, which means that the credit card companies would actually make money from credit card fraud. But perhaps I'm just overly cynical...

[ Parent ]

Another thing about debit cards (4.62 / 8) (#4)
by Bill Melater on Thu Aug 21, 2003 at 07:54:51 PM EST

If someone has your debit card and PIN number, they can drain the cash out of your bank account, withdrawing the maximum every day. AFAIK, you're just screwed if this happens ... no one covers it.



Uh, you cancel the card (4.00 / 3) (#60)
by Craevenwulfe on Fri Aug 22, 2003 at 03:48:37 AM EST

and arrest the guy next time he tries to use the card. Photo's taken from the auto-teller should help quite a lot with that.

[ Parent ]
Oh yea (4.50 / 2) (#81)
by rhdntd on Fri Aug 22, 2003 at 09:42:14 AM EST

They really help.

A friend's wife had her purse snatched recently. The police have a dozen photos of the same guy using her cards and checkbook around town. This has done nothing towards an arrest or to stop the inconvenience they're going through. There's no profit in prosecuting crimes at that level, so they don't.

-- 
"book chicks really seem to like anal"
  — Lady 3Jane
[ Parent ]

Let's review (4.50 / 2) (#104)
by Bill Melater on Fri Aug 22, 2003 at 10:38:50 AM EST

With a stolen credit card, you're liable for 50 bucks, max, regardless of how many charges the guy runs up on your card, regardless of whether he gets caught, regardless of whether anything of value is ever recovered.

With a stolen debit card + PIN (and the max ATM withdrawl is about $500 or so per day, at least at my bank, all in nice untraceable cash), the police first have to catch the guy. Assuming the guy had any cash when he was arrested (instead of, say, a bloodstream full of cheap smack), you then have to stand in line with all the other people the guy has stolen from, hoping to get a percentage of your money back.

The ATM photos will help the police identify the guy, but they ain't gonna help you get your money back. And neither will Visa/MC or your bank. They'll sit back and say "That's too fucking bad, Charlie. You should guard your PIN number more closely."



[ Parent ]

Depends on the bank (4.50 / 2) (#232)
by kindall on Sat Aug 23, 2003 at 01:33:26 PM EST

Bank of America offers "zero liability" for their debit cards and guarantees refunds on any unauthorized transactions the next business day after the card is reported stolen. They also put your photo and your signature right on the front of the card (not a place for you to sign the card like on the back -- they actually take your signature when you open your account and have that printed on the front of the card, so it's not like someone could snatch it out of the mail and sign the back), two nice security features that help prevent a stolen card from being used in person at stores.

I'm sure there are other banks that offer similar features, check around.

[ Parent ]

Is that a new thing? (none / 0) (#271)
by Bill Melater on Sun Aug 24, 2003 at 07:07:15 AM EST

I have a BOA account (opened about a year ago) and the debit card looks like any other debit card. "Zero liability" might be enough for to move the card out of storage and into my wallet. I'll look into it.

[ Parent ]
What if you don't have a pin number? (none / 0) (#258)
by dipierro on Sat Aug 23, 2003 at 08:34:12 PM EST

Is it possible to get a debit card which can't be used in an ATM? That would be a good feature for some people.



[ Parent ]
+1FP, Informative (1.87 / 8) (#5)
by Random Liegh on Thu Aug 21, 2003 at 07:58:13 PM EST


--
Fives for the funny, one's for the spelling flames, and 0's for the assholes ^W geeks.
what if.... (2.44 / 25) (#9)
by rmg on Thu Aug 21, 2003 at 08:04:55 PM EST

you are an interdimensional being whose soul is trapped in a human body and you face constant discrimination because of your inability to function as a normal human? how would this affect one's ability to use a credit card? what card would be most appropriate for such a person?

how does a credit card factor into the eternal quest for keys?

_____ intellectual tiddlywinks

Give it up (3.50 / 2) (#99)
by ad hoc on Fri Aug 22, 2003 at 10:20:59 AM EST

you'd never be able to punch in your PIN number, so it's really a lost cause.


--

[ Parent ]
no problem (none / 0) (#212)
by Kiwaiti on Sat Aug 23, 2003 at 02:16:17 AM EST

in that case, you can probably avoid needing a credit card at all by having all your earnings forwarded to a scientology company account - you'll find out it is nearly enough to cover your most basic needs there

Kiwaiti
Member of the Legion Of Microsoft Haters
[ Parent ]

Rewards programs (4.50 / 4) (#10)
by Sven on Thu Aug 21, 2003 at 08:13:29 PM EST

One of the things I really like about my credit card, in addition to the general convenience factor, is the rewards program. I'm speaking from an Australian perspective, but I'm sure there are similar programs in most parts of the world.

I'm certainly not a big spender by any means, but even my modest spending has earned me around 24,000 points. Generally points are earned at 1 point per dollar, but there are lots of ways to earn more. For example, my current card gave me 5,000 points just for signing up, and I could also get another 5,000 every time I get someone else to sign up (haven't been able to take advantage of this though). 24,000 points could give me $200 in gift vouchers (which is significantly more than I've paid for the card), or 30,000 could get me a return trip from Perth to Singapore or anywhere on the east coast of Australia with the Qantas frequent flyer program. For me, it represents an excellent way to supplement my frequent flyer points.

Even though cards with rewards programs have higher annual fees than those without, the return (for me anyway) makes it easily worthwhile.

--
harshbutfair - you know it makes sense

not necessarily higher annual fees (4.00 / 1) (#13)
by Delirium on Thu Aug 21, 2003 at 08:51:33 PM EST

In the US at least, Discover was the first major card to offer rewards programs (they offered straight cash at around 1%), and it has no annual fee. There's also many banks who offer rewards programs on cards with no annual fees. YMMV, of course.

[ Parent ]
Amex (4.00 / 1) (#33)
by Kadin2048 on Thu Aug 21, 2003 at 10:33:34 PM EST

American Express has a cash back card that gives you between 0.5 and 3% back, depending on where you spend. It's about the same as Discover, maybe a little higher. I don't have one, but I've looked into it. They have it in both a 'Blue' interest-bearing version and a regular charge-card version.

If you really want to force yourself to not keep a balance, the 'classic' American Express cards aren't a bad idea...they aren't credit cards at all, they're 'charge cards.' You buy things with them, and at the end of the month you get a bill. And they have certain perks if you do a lot of international travel.

[ Parent ]

Reward points (3.50 / 2) (#17)
by smallstepforman on Thu Aug 21, 2003 at 08:56:56 PM EST

Yes, Award points cards have higher annual fees, but you can pay the fee with the reward points you earn. For VISA, I need 6000 points to cover my annual fee, which when paying bills is easily achievable. Therefore, its a win-win situation.

[ Parent ]
Not always... (4.00 / 1) (#18)
by StormShadow on Thu Aug 21, 2003 at 09:21:58 PM EST

... I got a Berkeley graduate alumni card recently that lets you earn points with NO annual fee. Those do exist but tend to be more difficult to get. I don't know how competitive the awards program is but it is better than nothing.


-----------------
oderint dum metuant - Cicero
We aren't killing enough of our [America's] enemies. Re-elect Bush in 2004 - Me
12/2003: This account is now closed. Password scrambled. Its been a pleasure.


[ Parent ]
AirMiles, GM points and other reward programs (none / 0) (#135)
by dark ally on Fri Aug 22, 2003 at 01:28:55 PM EST

  1. Ensure your reward program rewards you with something you will use.  I replaced my GM VISA (which gave me $$ to buy a GM vehicle, which I have no plans to do) with a Canadian Tire MasterCard (which gets me $$ to use in a store I buy things at anyway).
  2. Know when (and how much) the rewards program kicks in.  My wife's AirMiles Amex only gets points at certain retailers at a miserly rate.  We cut up our PC MasterCards in favor of Canadian Tire because CT MC gives CT$ for any purchase.


[ Parent ]
Assuming I'm thinking of the same PC Mastercard... (none / 0) (#236)
by dave114 on Sat Aug 23, 2003 at 02:04:36 PM EST

You get points for any purchase as well (the debit cards are limited to certain stores for acquiring points). See http://www.pcpoints.ca/unsecure/about.asp for details.

[ Parent ]
Credit cards are tools.. (1.66 / 21) (#11)
by anaesthesis on Thu Aug 21, 2003 at 08:21:52 PM EST

.. for the elite to suck out wealth from the commons. They are functions of an unfair capitalist economy. I don't support credit cards because they sponsor the classist system entrenched in the global economy. When you use a credit card you make someone else money. When you use a bank you also make someone else money - that's why I keep everything cash. I work hard for my money and I'll be damned if it's going to funnel into some greedy corporate execs pocket.

keep taking the medication [nt] (1.00 / 3) (#21)
by QuantumG on Thu Aug 21, 2003 at 09:30:00 PM EST



Gun fire is the sound of freedom.
[ Parent ]
that's just like you (2.40 / 5) (#23)
by anaesthesis on Thu Aug 21, 2003 at 09:39:41 PM EST

can't reply with a valid counter argument so you insult me personally. way to go.

[ Parent ]
Good stuff... (1.80 / 5) (#24)
by debillitatus on Thu Aug 21, 2003 at 09:40:18 PM EST

This'll keep me chucklin' all night.

Damn you and your daily doubles, you brigand!
[ Parent ]

hehehe (2.33 / 6) (#26)
by anaesthesis on Thu Aug 21, 2003 at 09:44:24 PM EST

i am glad i could help

[ Parent ]
nice, except (2.80 / 5) (#28)
by circletimessquare on Thu Aug 21, 2003 at 09:53:14 PM EST

when you find a system that works better than capitalism, tell us all about it.

until then, don't widen the discussion about credit cards into your asocial grousing about unfair this and that is in life.

whatever.

we're all glad you have the critical thinking skills of an angry teenager, but we're somewhat unimpressed by how uninsightful you really are and the overall appropriateness of your overly-negative and misplaced comment.

The tigers of wrath are wiser than the horses of instruction.

[ Parent ]

Trolls trolling trolls? LOL <nt> (1.87 / 8) (#31)
by Vesperto on Thu Aug 21, 2003 at 10:10:47 PM EST



If you disagree post, don't moderate. Alimaniere forf
[
Parent ]
cash? (3.50 / 4) (#41)
by puppet10 on Fri Aug 22, 2003 at 01:16:17 AM EST

isnt cash tying you into the capitalist system just as much?

Cash is just a bunch of paper unbacked by anything and the value is controlled by the federal reserve - the de facto central bank of the US.

You should work for barter or maybe gold.

[ Parent ]

exactly (1.50 / 2) (#73)
by livus on Fri Aug 22, 2003 at 08:25:23 AM EST

only I think he should work for hamburgers. Or Potted Meat Product.

---
HIREZ substitute.
be concrete asshole, or shut up. - CTS
I guess I skipped school or something to drink on the internet? - lonelyhobo
I'd like to hope that any impression you got about us from internet forums was incorrect. - debillitatus
I consider myself trolled more or less just by visiting the site. HollyHopDrive

[ Parent ]
Nice try (1.00 / 1) (#111)
by CaptainSuperBoy on Fri Aug 22, 2003 at 11:40:10 AM EST

So, how does your new-found communism jive with this?

Live in the real world for a while kid, and sooner or later your views won't be so irrational and hypocritical.

--
jimmysquid.com - I take pictures.
[ Parent ]

haha (1.00 / 2) (#161)
by anaesthesis on Fri Aug 22, 2003 at 03:36:46 PM EST

i normally don't like to do this, but..

YBHT. YHL. HAND.

[ Parent ]
Poor trolling (2.50 / 2) (#190)
by CaptainSuperBoy on Fri Aug 22, 2003 at 07:34:02 PM EST

Ah, poor form. The poster himself should never announce it was a troll, especially mere hours after said troll. Poor form there, kid. You'd do well to read some of spiralx's early treatises.

--
jimmysquid.com - I take pictures.
[ Parent ]
thank you sir (1.00 / 1) (#223)
by anaesthesis on Sat Aug 23, 2003 at 09:36:02 AM EST

i could use some wisdom - thank you.

[ Parent ]
Hope you're keeping it under a mattress (none / 0) (#233)
by kindall on Sat Aug 23, 2003 at 01:39:04 PM EST

If you're keeping your money in a bank, the bank's earning interest loaning it out to others.

[ Parent ]
Do you realize what you've done? (2.76 / 13) (#19)
by Mr Hogan on Thu Aug 21, 2003 at 09:22:15 PM EST

Interest: This is the biggest problem with people's use of credit cards, but is again easily avoided. Simply treat your credit card as if it were a bill that must be paid, and ignore the "credit" part of the name. When you buy things on it, pretend it was a debit card or cash, and only spend money you actually have. Then pay the bill in full when it comes, and you'll pay no interest at all.

Thanks for letting the cat out of the bag blabbermouth revealing trade secrets like that on the internet for all to read and heed now the credit card companies won't have any way to make money and the will economy crash.

--
Life is food and rape, then tilt.

he should be sued under DMCA (3.00 / 5) (#44)
by turmeric on Fri Aug 22, 2003 at 01:47:31 AM EST

communist!

[ Parent ]
blah blah EACH ACCORDING TO THEIR MEAN$ blah (1.50 / 2) (#54)
by Mr Hogan on Fri Aug 22, 2003 at 02:47:34 AM EST

He reminds me of Lenin both are very logical no detours no remorse: "If no money then no funny! Now what about the Winter Palace, comrade Koba, has it fallen yet?"

--
Life is food and rape, then tilt.
[ Parent ]

Merchant fees? (4.66 / 3) (#63)
by kreyg on Fri Aug 22, 2003 at 04:08:20 AM EST

They make money whether you pay interest or not. Most (all?) cards charge the seller, usually between 2% and 5% of the purchase price anyway. So, of course, you're paying indirectly for the privilege to use a credit card through higher prices.

I'm not sure what percentage of revenues this represents for the credit card companies, though.

There was a point to this story, but it has temporarily escaped the chronicler's mind. - Douglas Adams
[ Parent ]
My experience is different. (2.00 / 1) (#70)
by Mr Hogan on Fri Aug 22, 2003 at 07:15:00 AM EST

Correct me if I'm wrong but you're confusing third party credit card billing agents such as paypal and ccbill with legitimate merchant accounts - on account of your experience with and addiction to porn sites - but where I'm from the cost of swiping a card on a terminal is zero. Thing is banks and credit unions don't give merchant accounts to pornographers for the obvious reason their clientele the customers collectively known as open source zealots never pay for anything - always they are hacking committing fraud capitalism is hemorrhaging.

--
Life is food and rape, then tilt.
[ Parent ]

You are incorrect, sir. (4.66 / 3) (#126)
by ckaminski on Fri Aug 22, 2003 at 01:08:57 PM EST

As a person who has set up multiple merchant accounts, I can attest to you that the merchant indeed does pay a percentage of every transaction to the transaction processor.  That 1.5-3% (it's not usually more the 3%, even for small-time shop owners) goes to the person who rents the gear and the merchant account to the merchant.  Some portion of that percentage makes it into the pockets of the credit card vendors.  So they get you coming and going.  They get you at point-of-sale with higher prices (although the competition effect reduces this somewhat), and they get you on interest charges.


[ Parent ]
Are you sure? (1.00 / 3) (#157)
by Mr Hogan on Fri Aug 22, 2003 at 03:15:20 PM EST

I think you're mistaken please post a dot edu link or retraction.

--
Life is food and rape, then tilt.
[ Parent ]

Are you a wild man? (1.60 / 5) (#175)
by Mr Hogan on Fri Aug 22, 2003 at 05:47:40 PM EST

You strike me as something of a loose cannon and your reply was an eccentric jeremiad without scientific or artistic merit. Please believe me when I tell you friend that unlike the numerous craven agents provocateurs on this battered site - that legion of truculent fellows their disrespect for society's cognitive elite - teh computar admins - matched only by the ambiguousness of their morality - they bathe rarely frequently they touch each other in the most inappropriate of places - I have no wish to troll you flaunt gays or strike in your heart fear of Muslims.

The spread of blatant lies and misinformation here may not have been your intent - perhaps the whole of kuro5hin has been the victim of a cross-cultural issue you wished to ignore vanish with a bold claim uttered with conviction - but be that as it were still I will correct your meretricious sentences because truth matters that is something everyone with agrees. So here's the fo shizzle: in my country - which admittedly is socialist regulates heavily the cultural conventions of Jewry - merchant accounts are not levied per transaction costs only a one time setup fee $1,000,000. You may have the last word if it makes you feel bigger stronger faster better looking - me my work is done here the people have been spoken to the music slew the screeching.

--
Life is food and rape, then tilt.
[ Parent ]

Prepaid Credit (3.50 / 4) (#22)
by Katt on Thu Aug 21, 2003 at 09:32:49 PM EST

And if you still can't get a credit card, I've seen machines set up in a few grocery stores that let you purchase a pre-paid Mastercard.

I don't know if they carry the same protections as an actual credit card, though. I imagine they're targeted to low-income people or those with lousy credit who need a card for renting a car or hotel room or whatnot.

Yes (4.00 / 2) (#96)
by ad hoc on Fri Aug 22, 2003 at 10:17:54 AM EST

they are normal "credit" cards, not debit cards. They are "secured" credit cards. It's like taking a home equity loan, if you don't pay back the loan, they take your house.

These cards are good to establish or reestablish your credit. However, the charge limit of the card is the amount you have securing it (if you have $500 in the account, you can only charge $500 worth of stuff). They do not have to pay you interest on your security, and the finance charge rates are usually very high (+20%). They also often charge a yearly fee.

So while they have a purpose, it's best to just use them to get your credit worthiness established, then ditch them as fast as possible.


--

[ Parent ]

The evil card (3.20 / 5) (#25)
by SwampGas on Thu Aug 21, 2003 at 09:40:22 PM EST

9.9% fixed, no yearly fees, month long grace period.  Had it since I was 18.

chase? (nt) (2.00 / 3) (#27)
by circletimessquare on Thu Aug 21, 2003 at 09:49:41 PM EST



The tigers of wrath are wiser than the horses of instruction.

[ Parent ]
PSECU (3.00 / 3) (#34)
by SwampGas on Thu Aug 21, 2003 at 10:39:11 PM EST

Pennsylvania State Employee's Credit Union

psecu.com

[ Parent ]

Here's my question (4.63 / 11) (#36)
by RyoCokey on Thu Aug 21, 2003 at 10:51:09 PM EST

Many computer parts companies have a "administrative fee" for chargebacks in their little click-thru agreement. This basically says that if you attempt to challenge a charge they make, they get XX amount of money, regardless of the outcome. I've heard this is legal in California, but does it really have universal jurisdiction? If not, what states is it not valid in?



The troops returning home are worried. "We've lost the peace," men tell you. "We can't make it stick." - John Dos Passos
Excellent question (5.00 / 1) (#91)
by CaptainSuperBoy on Fri Aug 22, 2003 at 10:06:13 AM EST

That is an excellent question. I don't think this is enforceable, what are they going to do, charge your card again? Your credit card company investigates each chargeback and if they determine the reseller is at fault, I think you can effectively ignore their demands.

Now, I see the merchant's point of view too - there are some morons who will receive a DOA part and immediately charge it back without trying to resolve the matter at all. Hopefully the credit card company catches their fraud and hits them with a stiff fee.

--
jimmysquid.com - I take pictures.
[ Parent ]

hm (2.20 / 5) (#37)
by tps12 on Thu Aug 21, 2003 at 11:02:30 PM EST

There are definitely cards with more than a $400 annual fee.

They also profit from the merchants (4.54 / 11) (#39)
by Valur on Thu Aug 21, 2003 at 11:53:57 PM EST

A typical low-risk merchant account (IE, a place where you take the credit card in person) takes a 1.5 to 2.0 percent cut of every transaction made. "Higher risk" merchants, such as internet-based sales and mail order can pay as much as 3 to 4 percent of every transaction. Being able to accept cards also often involves a monthly fee. Despite this, few sane businesses would pass up the opportunity to be able to charge customer's cards because of the increased sales this brings.

---
Hosting for creators: RPG-Works.Net
if you always pay on time they will cancel you (1.73 / 19) (#43)
by turmeric on Fri Aug 22, 2003 at 01:45:55 AM EST

duh. they are in business to make money not be a charity. if you want a straight shooting CC go with a credit union or something.

as for 'credit rating', well, roughly 5.7 billion people on this planet will never ever have a credit rating with transunion, experian, or equifax, and yet they will somehow manage to have meaningful, full lives ahead of them.



Um. No. (4.50 / 2) (#47)
by nyet on Fri Aug 22, 2003 at 02:03:39 AM EST

I have paid off every single credit card i have ever had with no rolling debt almost without exception, and i have YET to get canceled. They make 5% off of the retailer, regardless of interest paid. If anything, you have to WORK to get your cc canceled (i.e. to increase your FICO if you have too many bank cc's)

[ Parent ]
hasn't happened to anyone I know (4.66 / 3) (#48)
by Delirium on Fri Aug 22, 2003 at 02:04:14 AM EST

I know people who have gone decades with paying every bill on time, and far from being cancelled, they've had their credit limits repeatedly increased. The credit card companies still make plenty of money on the 3% fee they charge merchants.

[ Parent ]
7 years (4.66 / 3) (#49)
by DoorFrame on Fri Aug 22, 2003 at 02:12:31 AM EST

I've been doing this for seven years (paying all bills promptly and in full) and all I've ever gotten from the credit card company is a constantly increasing spending limit. Not quite a cancelled card. I know they're trying to trick me into spending more than I can afford to repay in one shot, but let them try. I know my limits and I shop within them, take that MBNA.

And those 5 billion people will never have most things that people in this country have, and that's sad for them. While they certainly can live a meaningful life, it doesn't mean that they won't at some point love to have our health care system, or any of the ten million other products and services which our culture provides for us.

[ Parent ]

And vice versa. (4.00 / 2) (#61)
by Craevenwulfe on Fri Aug 22, 2003 at 03:52:11 AM EST

And those 5 billion people will never have most things that people in this country have, and that's sad for them. While they certainly can live a meaningful life, it doesn't mean that they won't at some point love to have our health care system, or any of the ten million other products and services which our culture provides for us.

[ Parent ]
I didn't realise you were Canadians! (5.00 / 2) (#72)
by livus on Fri Aug 22, 2003 at 07:58:00 AM EST

"love to have our health care system" tipped me off though.

---
HIREZ substitute.
be concrete asshole, or shut up. - CTS
I guess I skipped school or something to drink on the internet? - lonelyhobo
I'd like to hope that any impression you got about us from internet forums was incorrect. - debillitatus
I consider myself trolled more or less just by visiting the site. HollyHopDrive

[ Parent ]
things, healthcare (none / 0) (#140)
by Rainy on Fri Aug 22, 2003 at 01:49:06 PM EST

After all, none of these things are necessary and in most cases they create problems rather than solve them. As for healthcare.. well, you're your own doctor and if you fail, nobody else will help you much.
--
Rainy "Collect all zero" Day
[ Parent ]
Ask them to lower your credit... (none / 0) (#337)
by emschwar on Tue Sep 02, 2003 at 08:39:37 PM EST

In point of fact, I've called various credit card companies and asked them to lower my limit.  Most customer care representatives are confounded by this, since 99.999% of their callers want to raise, not lower, their credit limit, but they will do it for you.  I feel much better knowing that I can't spend more than $10,000 with any given card.

[ Parent ]
Others have said this.... (5.00 / 1) (#71)
by signifying nothing on Fri Aug 22, 2003 at 07:23:36 AM EST

Incorrect.

What's more, my credit card company (MBNA UK) make paying especially easy - they automatically take the full amount from my bank account on the due date. I get 2-6 weeks free credit without having to lift a finger, and with no chance of ever incurring late fees or interest.

[ Parent ]

Completely untrue (5.00 / 1) (#103)
by elladan on Fri Aug 22, 2003 at 10:37:38 AM EST

This is completely and utterly untrue. They won't cancel you for this, ever.

This is in fact a completely ludicrous myth that's been going around for years, spread by people that apparently don't understand how credit cards work.

This is how credit cards work:

When you buy something, the store charges the amount to the CC company. They are then paid that amount, minus a fee. That's right, no matter what happens, the store gets screwed (out of 1-5%).

This is why they couldn't care less if you pay on time.

Of course, what this really means is that the store has already raised their prices 1-5% to compensate. So, if you're paying with cash, you're a chump because you're subsidizing the store's Credit Card tax.



[ Parent ]
Not entirely true... (4.50 / 2) (#113)
by Malvoisin on Fri Aug 22, 2003 at 11:47:30 AM EST

As between 1-5% one time or the typical 20% interest rate for years and years on the typical $8K balance, what do you think is more attractive?

They may not cancel you for being a "deadbeat" (their term) who pays the balance off each month, but they can always revise their terms-of-adhesion until they're unpleasant enough that you'll cancel on your own.  One card I had "rewarded" me for using it almost exclusively for six months and charging thousands of dollars to it by doubling my interest rate and instituting an annual fee.  Because I didn't carry a balance, they didn't want me anymore.  Naturally, I cancelled the card and let the issuer (Household) go exploit someone else.

[ Parent ]

Not Entirely False (none / 0) (#162)
by virg on Fri Aug 22, 2003 at 04:04:00 PM EST

I have worked at a bank that issued credit cards in mass quantities, and I can comfortably say you're mistaken. There are three things that make money for a credit card issuer: interest, fees, and churn. The first is simple, the second is obvious, and the third is how often one buys stuff with the card. Because the bank gets a (small) piece of every transaction, they make money when you use the card. Then, if you carry the balance, they make money on interest. You seem to think that this means that if you're only making them money on transactions, but not interest, that they'll dump you, which is patently untrue. Because there's no upper limit (realistically) on how many cardholders there can be, they don't need to "kick you out" to make room for a more profitable holder. They'll do business with both you and the balance carriers. The only real way to get a card cancelled on you for lack of profitability is to open a no-fee account card and then sit on it. If you never use it, they'll lose money to administrative costs, so they'll drop inactive accounts.

As to your personal experience, my guess is that your card's holding bank got bought out or merged, and the new owners changed the rules. It's very unlikely it was because you don't carry a balance, as I've never seen a single churn customer out of hundreds of thousands thrown out just for being less profitable.

Virg
"Imagine (it won't be hard) that most people would prefer seeing Carrot Top beaten to death with a bag of walnuts." - Jmzero
[ Parent ]
a data point (none / 0) (#265)
by jfkominek on Sun Aug 24, 2003 at 01:34:59 AM EST

i've had a discover card for, oh, 4 years now, i've never used. not once. i applied for two at once, and the discover card came second, so i stuck it in a drawer and forgot about it until i got a copy of my credit history.

[ Parent ]
1-5% is to break even (1.00 / 2) (#189)
by turmeric on Fri Aug 22, 2003 at 07:13:03 PM EST

duh

[ Parent ]
Not in 10 years, they won't. (nt) (5.00 / 1) (#143)
by ethereal on Fri Aug 22, 2003 at 01:54:58 PM EST


--

Stand up for your right to not believe: Americans United for Separation of Church and State
[ Parent ]

bah (4.00 / 8) (#50)
by fhotg on Fri Aug 22, 2003 at 02:18:00 AM EST

Cash is magic. How does your ugly pice of plastic substitute for the feeling of peeling a note from a roll which contains half your monthly income ? The feeling of freedom provided by that little roll which is made of well travelled, worldwide highly desired pieces of very symbolic artwork which expresses the value and power carried by these little marvels. The universal power of cash will buy you all kinds of things, services, experiences and people, where a plastic-card with AmEx-logo will do you no better than any arbitrary piece of plastic.

"Thats $2745.89 Sir. Which Card ?"
"Cash ! "

How do I love that dialogue !
~~~
Gitarren für die Mädchen -- Champagner für die Jungs

lol (4.25 / 4) (#51)
by Abominable Abitur on Fri Aug 22, 2003 at 02:31:02 AM EST

next time you want to make any kind of reservation over a phone or the internet go ahead and wave that cash in front of it, i'm sure the person/computer taking the reservation will go for it.

"Terrorism is only a viable "political activist" method for marginalized nutjobs, bottom line. The backlash that it causes makes it intractable for any reasonable ideology. Which is why you don't generally see wild athiest suicide bombers in america's streets." - lonelyhobo
[ Parent ]
ah (3.50 / 2) (#52)
by fhotg on Fri Aug 22, 2003 at 02:35:46 AM EST

ordering by phone or web: I ask for getting a bill. That usually works. I'm not missing much by refusing to give companies the possibility to take my money before I didn't see the goods.
~~~
Gitarren für die Mädchen -- Champagner für die Jungs

[ Parent ]
s/didn't/did/ (nt) (none / 0) (#62)
by fhotg on Fri Aug 22, 2003 at 04:05:11 AM EST


~~~
Gitarren für die Mädchen -- Champagner für die Jungs

[ Parent ]
well (none / 0) (#131)
by Abominable Abitur on Fri Aug 22, 2003 at 01:19:42 PM EST

I was thinking more of making reservations and what not.

Every rental car company I've rented from insisted on a credit card, they wouldn't rent without it.

I've also been to hotels where you have to use a credit card, they refused cash up front.

Anymore in some places we're moving towards the cashless society. Plastics are the future!

"Terrorism is only a viable "political activist" method for marginalized nutjobs, bottom line. The backlash that it causes makes it intractable for any reasonable ideology. Which is why you don't generally see wild athiest suicide bombers in america's streets." - lonelyhobo
[ Parent ]

yeah (none / 0) (#177)
by fhotg on Fri Aug 22, 2003 at 05:52:30 PM EST

Admittedly, when I was living on your side of the Atlantic, I was forced to use my VisaCard a couple of times. For one, my university didn't accept the legal tender of the country for tuition fees. Then, to rent a car, which I had to quite frequently,it was an absolute prerequisite.

I never liked it. I had a traumatic experience when I got talked into "get our customer card now, it's free and you save $20 on your $120 purchase here and now!". They took my CC - info, and a couple of weeks later I had to get back the money that was charged by a shady third party who got my info from the customer-card company and insisted on having me sold an insurance against credit card fraud !

I couldn't decide wether to laugh or to cry.
~~~
Gitarren für die Mädchen -- Champagner für die Jungs

[ Parent ]

Yeah sure (none / 0) (#234)
by kindall on Sat Aug 23, 2003 at 01:45:57 PM EST

How do you get companies to send you a bill when you pay cash for everything and therefore have no credit history?

[ Parent ]
Cash Money (4.60 / 5) (#65)
by bloat on Fri Aug 22, 2003 at 05:12:46 AM EST

"Thats $2745.89 Sir. Which Card ?"
"Cash ! "
"Would you mind waiting here for a moment, Sir. I'm just going to call the DEA."

CheersAndrewC.
--
There are no PanAsian supermarkets down in Hell, so you can't buy Golden Boy peanuts there.
[ Parent ]
DEA (4.50 / 6) (#66)
by fhotg on Fri Aug 22, 2003 at 05:26:49 AM EST

"Yes I do mind 'cause I am kind of in a hurry and need this gun now. I will buy my weaponry at a different place, au revoir."

Seriously though, would it raise suspicion these days in th US if you payed a bill like this in cash ? When I'm buying and selling used cars here, there's regularly larger piles of cash changing the owner.
~~~
Gitarren für die Mädchen -- Champagner für die Jungs

[ Parent ]

You forgot one thing. (3.00 / 1) (#77)
by tkatchev on Fri Aug 22, 2003 at 08:43:36 AM EST

The U.S. uses the credit card system as a universal spying device to keep track of its citizens.

Very handy, even though it is totalitarian.

   -- Signed, Lev Andropoff, cosmonaut.
[ Parent ]

Nope (5.00 / 5) (#109)
by ph317 on Fri Aug 22, 2003 at 11:22:15 AM EST


At that level there are no suspicions really.  At the $10,000+ mark, any bank or merchant which accepts a cash-equivalent amount from you that high is required to report it to the IRS.  Therefore, if you make $40K a year and buy two $35K cars in cash, the IRS will come audit you, and if you can't show where the cash came from, you're charged with tax evasion.  You actually have to prove where the $70K for the cars came from, even if you legitimately saved it up for years.  There's another cutoff mark down around $6,500 I believe, where again above that mark banks and merchants have to notify someone, but I can't remember who gets notified at that point.

The bottom line is, if you don't want the government digging in your possibly shady financial affairs, don't ever transact more than about $6K of your cash at one time in one place, even as a bank deposit.

[ Parent ]

same here (5.00 / 1) (#181)
by fhotg on Fri Aug 22, 2003 at 06:08:17 PM EST

If you walk up to a bank and try to put a five figure number of cash on your account, you get reported (or even have to prove where you got it from). If I recall correctly, this relatively new law was justified not to prevent tax-evasion but to hinder money-laundering. I don't know about merchants, but if it's transactions between private people, cash is still the most secure (for the vendor) and accepted form of payment.
~~~
Gitarren für die Mädchen -- Champagner für die Jungs

[ Parent ]
I beg to differ, sir... (none / 0) (#68)
by Wayfarer on Fri Aug 22, 2003 at 06:11:33 AM EST

My piece of plastic is really quite pretty.

Though, for what it's worth, nothing beats the American Sacajawea dollar coin for putting a convincing jingle in your step.  Save maybe the British pound coin.  But still...

-W-

"Is it all journey, or is there landfall?"
-Ellison & van Vogt, "The Human Operators"


[ Parent ]
Au contrare mon frare! (3.50 / 2) (#129)
by ckaminski on Fri Aug 22, 2003 at 01:16:14 PM EST

The Susan B. Anthony [SBA] is much more entertaining to shop with.  Drop 20 of those next time you pay to fill your tank at the petrol station, and watch poor Apu scream at you for leaving him only $5.  

Yes, yes, that was quite racist of me.  Poor Sally at Blockbuster couldn't figure out that 2 SBA's and a coupla quarters was the rental price of a movie... Kids today.

Or even better, something my mom was known to do, was carry $500 in $2 bills.  ;-)  Ho ho ho!  Life is grand sometimes...

[ Parent ]

Overseas (none / 0) (#201)
by Bios_Hakr on Fri Aug 22, 2003 at 11:10:38 PM EST

US Military bases overseas are required to hire local national employees.  They also do not usually give pennies as change.  I have been detained on 2 occasions because of this.

Once, I was at Burger King and I paid with a $2 bill and three $1 bills.  The Italian clerk and the Italian manager thought it was counterfit.  They threatened to call the cops.  I took out my cell-phone and called the cops for them.  The manager was shocked that I was pressing the issue.  When the cops showed up, the manager immidately tried to control the situation by claiming that I was trying to pass counterfit bills.  I shot him down by countering that I was the one who actually called the police to report a vendor refusing to accept legal US tender.  The cop laughed, told the manager the bill was real, and left.  I got my next two meals for free.

The second time I was picking up dry-cleaning.  I had about 70 cents in pennies I was trying to unload.  The cleaner refused to take the pennies.  I was in a hurry, so I just paid in cash.  A few days later, I called the local national employment office to lodge a complaint.  She ended up with a one-week suspention and I ended up getting the shittiest dry-cleaning service ever till I moved away.  But at least I paid every fucking bill with pennies.  Towards the end of my tour, I had my mom ship pennies in $1 rolls for me to break open in front of the cashier.  It was so fun to see her count...

[ Parent ]

Wow (none / 0) (#178)
by fhotg on Fri Aug 22, 2003 at 05:57:10 PM EST

I wasn't aware that now you can have a CC with an integrated microprocessor on which you can store your favorite URLs. That changes everything !
~~~
Gitarren für die Mädchen -- Champagner für die Jungs

[ Parent ]
Plus... (none / 0) (#197)
by Wayfarer on Fri Aug 22, 2003 at 08:46:38 PM EST

It's partially transparent!  The first thing a cashier does when I hand over the card is to hold it up to the light...

Credit limit?  Interest?  What does that have to do with anything...?

-W-

"Is it all journey, or is there landfall?"
-Ellison & van Vogt, "The Human Operators"


[ Parent ]
coin inscription (none / 0) (#188)
by Kiwaiti on Fri Aug 22, 2003 at 06:58:22 PM EST

Now that, if anything, should really read "in gold we trust".

Kiwaiti
Member of the Legion Of Microsoft Haters
[ Parent ]

For the D&D nerds among us... (none / 0) (#198)
by Wayfarer on Fri Aug 22, 2003 at 08:50:55 PM EST

The golden dollar allows you to carry money in copper (pennies), silver (dimes), and gold (dollars)!  Impress your gaming buddies!  Attract women other nerds!

Hey, it works for me...

-W-

"Is it all journey, or is there landfall?"
-Ellison & van Vogt, "The Human Operators"


[ Parent ]
Dark street, late at night (4.00 / 1) (#95)
by ad hoc on Fri Aug 22, 2003 at 10:12:15 AM EST

Pick your scenario:

Mugger: Give me your cash
You: I've got $20 and an Amex card

or

Mugger: Give me your cash
You: I've got 2 grand


--

[ Parent ]

forgot (none / 0) (#98)
by TheOnlyCoolTim on Fri Aug 22, 2003 at 10:18:23 AM EST

Mugger: Give me your cash.
You: I've got a gun.

Tim
"We are trapped in the belly of this horrible machine, and the machine is bleeding to death."
[ Parent ]

Next Scenario (5.00 / 3) (#158)
by virg on Fri Aug 22, 2003 at 03:27:59 PM EST

The Real Scenario:

Mugger: Give me your cash.
You: I've got a gun.
Other Mugger: So do I.
You: <gulp>
Mugger: Give me your cash and your gun.

Only the desperate work that racket alone.

Virg
"Imagine (it won't be hard) that most people would prefer seeing Carrot Top beaten to death with a bag of walnuts." - Jmzero
[ Parent ]
additional risk in carrying weapons (none / 0) (#187)
by Kiwaiti on Fri Aug 22, 2003 at 06:52:04 PM EST

The second mugger might also not be willing to take the risk of your gun, in that case you'd be lucky if you just got knocked senseless.

Kiwaiti
Member of the Legion Of Microsoft Haters
[ Parent ]

also (none / 0) (#165)
by fishling on Fri Aug 22, 2003 at 04:42:28 PM EST

2nd Mugger (behind you): So do I.

[ Parent ]
Gun works best (none / 0) (#290)
by Cro Magnon on Mon Aug 25, 2003 at 09:46:04 AM EST

if you see and identify the mugger as a possible threat BEFORE he goes after you. Odds are, by the time he demands your money, he and/or an accomplice already have their guns out and pointed right at you.
Information wants to be beer.
[ Parent ]
Are you a pimp? (none / 0) (#148)
by tkatchev on Fri Aug 22, 2003 at 02:04:59 PM EST

What the hell are you doing on a dark street late at night with $2000 in your pocket?

   -- Signed, Lev Andropoff, cosmonaut.
[ Parent ]

Um, no, he's a mugger n/t (5.00 / 1) (#154)
by Bill Melater on Fri Aug 22, 2003 at 02:50:02 PM EST



[ Parent ]
It's called... (4.50 / 4) (#173)
by curunir on Fri Aug 22, 2003 at 05:43:06 PM EST

A decoy wallet.

Mine usually contain $40-$100 plus some non-essential wallet-type cards (ie my ISIC card). I fill it with spending cash whenver it gets low so that I never have to pull out the real stash in public. It's pretty standard practice when you're travelling and need to carry large sums of cash. A mugger would have no reason to suspect you've got massive amounts of cash in a money belt stashed somewhere on your body.

[ Parent ]
Decoys (4.00 / 1) (#200)
by wiml on Fri Aug 22, 2003 at 09:59:45 PM EST

Well, except that having a hidden money belt is such a common practice among travelers. If the mugger thinks you look like a traveler and thinks you look like you ought to have more cash on you than you gave him, you might well get a more thorough going-over.

[ Parent ]
You forgot to mention... (3.42 / 7) (#56)
by the77x42 on Fri Aug 22, 2003 at 02:55:10 AM EST

...how easy it is to get stuff added to your card for free.

Always speak calmly and call the sucker/person on the phone by their first name. Tell them you want to purchase some expensive stereo equipment to invest in a new career and you want to put it on your credit card. Boom, instant $3000 limit increase.

Tell them you found a card with a lower interest rate and that you are thinking of moving over, but would rather keep their business because you have never had any problems. Boom, instant interest rate decrease.

For those of you who are thinking about going through school or don't have any money, just sign up for as many credit cards as you can, give them all sob stories about how you need a limit increase (I'm sure this will work on at least a few) and charge up everything you need paying off one credit card with another. Once things get really ugly, just declare bankruptcy and in 4 years your credit record will be wiped clean and by that time you'll be just about finished school.

It all works out in the end :)


"We're not here to educate. We're here to point and laugh." - creature
"You have some pretty stupid ideas." - indubitable ‮

Try 10 years (5.00 / 3) (#87)
by CaptainSuperBoy on Fri Aug 22, 2003 at 09:57:26 AM EST

Try 10 years - that's how long bankruptcy information is reported for. That's 10 years with no car loans, no mortgage, lower job prospects, limited housing opportunities. What you do with your card in college can fuck up your life for a long, and important, stretch of time.

--
jimmysquid.com - I take pictures.
[ Parent ]
no, he's canadian... (none / 0) (#117)
by Run4YourLives on Fri Aug 22, 2003 at 12:03:03 PM EST

7 years

It's slightly Japanese, but without all of that fanatical devotion to the workplace. - CheeseburgerBrown
[ Parent ]
Try 6 years (none / 0) (#146)
by Big Sexxy Joe on Fri Aug 22, 2003 at 02:00:38 PM EST

in the U.S. anyway. That's 6 years with the ability to get credit at highter interest rate than people with good credit.

In some cases a bankruptcy can help your credit. If you are in severe debt you will be unable to get credit and would be better of after the bankruptcy. If you file a Chapter 7 you cannot file another one for 6 years. And that's a good thing to prospective creditors. If you filed a Chapter 13, you most likely have assets you can go after.

I'm like Jesus, only better.
Democracy Now! - your daily, uncensored, corporate-free grassroots news hour
[ Parent ]

Error (none / 0) (#94)
by ad hoc on Fri Aug 22, 2003 at 10:10:10 AM EST

Your record is never wiped clean. Or rather, never wiped entirely clean.  While it's true that the specific terms of your bankruptcy are wiped after 10 years, the fact that you once (or twice, or whatever) declared bankruptcy at all is never wiped from your record.


--

[ Parent ]
Not a good idea (none / 0) (#147)
by Big Sexxy Joe on Fri Aug 22, 2003 at 02:03:24 PM EST

Incurring debt with the intention of filing bankruptcy considered fraud. Also I should point out that your student loans can't be wiped with a bankruptcy.

I'm like Jesus, only better.
Democracy Now! - your daily, uncensored, corporate-free grassroots news hour
[ Parent ]
or just flee the country (none / 0) (#171)
by auraslip on Fri Aug 22, 2003 at 05:36:32 PM EST

who wants to live in america anyways
___-___
[ Parent ]
Why you want an AmEx card (4.50 / 6) (#58)
by Bryan Larsen on Fri Aug 22, 2003 at 03:46:20 AM EST

Pulling out an American Express in front of a manager/owner is usually enough to get yourself a nice 3-5% cash discount, if you do it the right way.

They prefer that the customer receives the service fee over American Express.  As well, they know that you're not going to be reversing the charges on them.

Sometimes I pull it out for spite.  I get the same number of Air Miles regardless of whether I use Mastercard or American Express, so the only difference to me is how much the merchant gets nailed.

Cash discounts are even higher for high risk services.  http://www.funvalerie.com/ (definitely not safe for work) used to charge a 50% credit card premium.  I guess that wasn't enough: I see she no longer accepts credit cards.  That may have something to do with the sleazeball who hired her services using my credit card!

And then there's the contractors that prefer avoiding a paper trail.  They're great to hit up for cash discounts.

Bryan

More detail please (none / 0) (#244)
by maniac1860 on Sat Aug 23, 2003 at 05:06:45 PM EST

I assume you mean if you show them the American Express, and then give them another card they give you a discount. How do you do this? Is there some smooth way, or is it just blatantly blackmail?

[ Parent ]
No.. (none / 0) (#250)
by mindstrm on Sat Aug 23, 2003 at 07:16:53 PM EST

He means that if they see you are going to pay with Amex, they will be more inclined to offer you a cash discount (meaning "Hey if you pay with cash, we'll knock 5% off"). Why? Merchants don't like amex..

Amex has higher merchant fees than Visa or MC.

It's not blackmail at all, it's called business.

[ Parent ]

So.. =) (2.33 / 3) (#59)
by thenerd on Fri Aug 22, 2003 at 03:47:58 AM EST

Anyone out here possess an American Express Centurion card?

No Centurion. (none / 0) (#100)
by acceleriter on Fri Aug 22, 2003 at 10:26:32 AM EST

Had a Platinum, got rid of it when the fee went from $300 to $400/yr. That, and I realized that I'm not rich and probably won't be buying any full fare international tickets and thus would never have gotten that free companion fare.

Centurion is taking the place the Amex Platinum used to market to--a truly exclusive card. Amex is being very quiet about it, probably to avoid losing more Platinum card holders who realize that they don't have the card with the most snob appeal :).

[ Parent ]

I give up (none / 0) (#145)
by ethereal on Fri Aug 22, 2003 at 01:59:36 PM EST

Why did you feel the need to pay $300/year to American Express? I have trouble finding places that will even accept it around here (Midwest). What exactly did your $300 buy you?

--

Stand up for your right to not believe: Americans United for Separation of Church and State
[ Parent ]

Power of the Yuppie? (N/T) (none / 0) (#160)
by The Amazing Idiot on Fri Aug 22, 2003 at 03:30:58 PM EST



[ Parent ]
Not much . . . (none / 0) (#166)
by acceleriter on Fri Aug 22, 2003 at 04:42:48 PM EST

. . . save for a bunch of Gap gift certificates with the "free" Membership Rewards that came with it. At the time I got it, I traveled quite a bit and envisioned actually using some of the car rental memberships.

And I did get to hang in a Delta airport lounge (if you're ticketed on the airline that day, you can use the member lounges with the card). Free Maker's Mark and Coke until the flight boarded. Not enough to pay the $300/yr. fee, though.

Oh, and a couple of small Purchase Protection claims. If one actually does travel internationally and has an employer reimbursing for full-fare tickets, it would pay for itself very quickly.

[ Parent ]

OK, I get it - it's mostly for travellers. (none / 0) (#301)
by ethereal on Mon Aug 25, 2003 at 02:10:39 PM EST

Thanks for clarifying.

--

Stand up for your right to not believe: Americans United for Separation of Church and State
[ Parent ]

More info on Centurian (none / 0) (#124)
by Moebius on Fri Aug 22, 2003 at 12:53:33 PM EST

Wow, I'd never heard of this card before now. AmEx is certainly pretty hush-hush about it, but there is some information available in the form of Centurian cardholder reviews. It certainly looks pretty cool, at least :)

[ Parent ]
had one tonight (none / 0) (#204)
by mlknowle on Fri Aug 22, 2003 at 11:55:44 PM EST

not mine of course. asked the gent about it and he reported that his 'credit limit' was (at last check) 7 million dollars

[ Parent ]
Typlical K5 Article (1.68 / 16) (#67)
by losang on Fri Aug 22, 2003 at 05:39:26 AM EST

Well you are good at stating the obvious, presenting your opinion as fact and patronizing others. Perfect article for K5.

You could always leave and never look back [nt] (3.50 / 4) (#86)
by CaptainSuperBoy on Fri Aug 22, 2003 at 09:48:35 AM EST



--
jimmysquid.com - I take pictures.
[ Parent ]
Thank you for your contribution. (3.00 / 3) (#101)
by porkchop_d_clown on Fri Aug 22, 2003 at 10:34:13 AM EST

We value your input.


--
You can't raise my prices. You can't build more power plants. You can't build more power lines. Why are my lights out!?!


[ Parent ]
I Thought... (4.00 / 1) (#128)
by FantocheDoSock on Fri Aug 22, 2003 at 01:14:20 PM EST

...he was stating the obvious, until I read some of the comments here. Apparently, America needs to start teaching household finances in Home Ec again.

The usefulness of the article nonwithstanding, the usefulness of your derisive comment is about nil.



[ Parent ]
One-time credit card numbers (4.60 / 10) (#69)
by artemb on Fri Aug 22, 2003 at 06:36:28 AM EST

For those who are paranoid about credit card safety on the Internet some credit cards offer one-time card numbers. AmEx Blue and Discover do and I've heard about a Master Card that came with similar features. Pretty nice, especially when one has to deal with something risky (like internet).

This way one can keep all the benefits of the credit card and avoid exposing real credit card number to to who knows what is out there. Once transaction has been completed, the number can't be charged again, so even if someone steals it - not a big deal.

-A

-- Even if I'm a paranoid, it does not mean that they are not after me.

Holy shit (2.25 / 4) (#75)
by The Terrorists on Fri Aug 22, 2003 at 08:28:24 AM EST

That, sir, is cool.

Watch your mouth, pigfucker. -- Rusty Foster
[ Parent ]

Mostly propoganda (3.66 / 3) (#83)
by wumpus on Fri Aug 22, 2003 at 09:45:30 AM EST

I wonder how hard it is to actually use on of these. You also have to wonder how it works. You have to trust your connection to the credit card company, but then assume that the company you are buying from is untrustworthy. Remember that the credit card company holds a buisness responsible for any fraudulant purchases made without a physical card, they don't care if your number is stolen.

Note that you are only risking the hassle of removing items from your credit card bill, presumably placed by the untrustworthy company you did business with. If you don't trust the company with your credit card, why are you doing business with them at all?

Wumpus

[ Parent ]

It's pretty easy (4.00 / 3) (#92)
by ad hoc on Fri Aug 22, 2003 at 10:07:09 AM EST

but of limited usefulness.

Sometimes there are circumstances where I trust the company, but not the employees. For example, the two times my credit card number was stolen, it was stolen by cashiers working in the Bursar's office at my university (it's the only place I ever use that particular card). The Bursar's office was not interested in hearing any complaints, so the only alternative is to use one of the one-off numbers to pay tuition. Then, even if they steal it, it's worthless.

They're not really one-off numbers, though. They are "limited life" numbers. At least for Amex. Rather than being good for one charge, they are good for 30 days, so there is still some "life" to them.


--

[ Parent ]

Ouch. (3.00 / 2) (#229)
by wumpus on Sat Aug 23, 2003 at 12:42:13 PM EST

Thats a pretty good use for one. On the other hand, what is the point of a 30 day lifespan? A thief can charge a lot in 30 days. I'm pretty sure when I had a credit card stolen (mailed to my dorm during the summer), they maxed it out in 30 days. Don't ask me what happens with an amex card.

Wumpus

[ Parent ]

The point (none / 0) (#260)
by ad hoc on Sat Aug 23, 2003 at 09:02:37 PM EST

I think the point is really that they're counting on a certain amount of time to pass before the card is actually used. The bursars' office problem was one thing, but if your card number is stolen by someone, it was probably stolen so that it could be sold. That takes time. Hopefully, it takes enough time for the number to expire.


--

[ Parent ]
Yeah. (none / 0) (#282)
by DavidTC on Sun Aug 24, 2003 at 03:09:04 PM EST

Just like most people who steal cars do not try to operate a parts store to resell them, most people who steal credit cards numbers just want 25 dollars a number or whatever.

Unless, of course, they're idiots. Which plenty of them are, ordering 2000 dollars worth of crap to their own house, or, more cleverly, to a PO box.

But if you get hit by a professional credit card theft ring, though, your number might be sold two or three times before someone purchases one easily fenceable item of jewelry with it, over-the-phone-but-pick-it-up-in-person-the-next-day, and then throws the number away. By the time you realize anything's wrong, the purchased jewelry is in a pawn shop and all copies of your number have been destroyed.

-David T. C.
Yes, my email address is real.
[ Parent ]

Single-use CC numbers (none / 0) (#330)
by kmself on Sat Aug 30, 2003 at 03:40:35 AM EST

Depends on the system. Some "single use" or "time-limited" numbers only credit a single payee. So even if stolen, all the theif could do in this case, is pay Uni fees on behalf of the cardholder.

--
Karsten M. Self
SCO -- backgrounder on Caldera/SCO vs IBM
Support the EFF!!
There is no K5 cabal.
[ Parent ]

MBNA does this (none / 0) (#195)
by ehintz on Fri Aug 22, 2003 at 08:08:05 PM EST

I've been using it for a couple of years now. You can specify the credit limit and expiration month of the card, and it includes the CVC code as well. Very useful for online and phone transactions.

Regards,
Ed Hintz
[ Parent ]
And it is one shot as well (none / 0) (#342)
by Azethoth on Wed Sep 03, 2003 at 10:05:16 PM EST

*You can set the timeout to be 1 - 12 months. (I wish the upper limit was longer so I can conveniently pay bills automatically this way) *It will only work with the first charger to use it. (RTFM, this was confusing on first use ;-) *Also, YOU set the purchase limit for that fake number, so if you know the exact amount up front, there can be no overcharge at all. (Commerce sites that don't collect card info till after the total really suck) *Plus the downloaded app lets you drag & drop the fake number & CVC code to the appropriate field. *Your credit card number is not sitting on some schmo's database waiting for a hacker to steal it. Yes, I am a very happy user of this feature of my MBNA card.

[ Parent ]
What I want (3.50 / 2) (#74)
by Cackmobile on Fri Aug 22, 2003 at 08:26:07 AM EST

I want a debit card with credit features. I don't have a cc and don't really want one but sometimes I need to buy off the net or rent a car/hotel room. WHat I want is a card that acts like a debit card ie takes funds straight from my account and stops when it full. Yet I have the ability to leave it as deposit for a car etc so has a little bit of emergency credit.

Small line of credit (4.00 / 1) (#85)
by CaptainSuperBoy on Fri Aug 22, 2003 at 09:46:59 AM EST

You can usually get a small line of credit through your bank, this protects you from overdraft on your checking account. However there is usually a fee each time your line of credit is used to pay off your checking, and there is no grace period on interest. For small amounts this could be useful anyway.

--
jimmysquid.com - I take pictures.
[ Parent ]
Cars (4.00 / 2) (#90)
by ad hoc on Fri Aug 22, 2003 at 10:03:24 AM EST

Generally speaking, car rental agencies will not accept debit cards for deposits. One of the additional "features" of a debit card is that back charges are not allowed.

For credit cards, a retailer can charge additional money on your card in certain circumstances. They are not allowed to do that for debit cards.

For example, if you rent a car and three weeks later the car rental agency gets a parking ticket in the mail that you got, but didn't pay, while you rented the car, they can charge your credit card for the ticket (plus a service charge). They can also charge you after the fact if you did not fill up the tank. A hotel can charge your card extra if you trashed the room.


--

[ Parent ]

Line of credit (3.00 / 1) (#97)
by kvan on Fri Aug 22, 2003 at 10:18:13 AM EST

What you're looking for is a debit card combined with a (short) line of credit.

"Many people would sooner die than think; in fact, most do." - Bertrand Russell


[ Parent ]
They do exist (3.50 / 2) (#123)
by dark ally on Fri Aug 22, 2003 at 12:49:16 PM EST

There are Visa and MasterCard branded debit/check cards.  Check with your bank.

However, even though they look like CCs, not all places (car rental companies in particular) will accept them.  This is because these cards can't be charged in the same way if you cause damage.

The alternative is to get a normal CC and have the limit set very low.  But be careful and know what your limit is.  It's very easy to forget and try to buy something (which you may have $$ for) that exceeds that limit.


[ Parent ]

We have prepaid credit cards here... (none / 0) (#240)
by Bake on Sat Aug 23, 2003 at 03:33:11 PM EST

In my country (Iceland) MasterCard offers a card called MasterCard Plus. It's basically a credit card except that instead of a withdrawal limit, there is a deposit. Instead of paying a bill, you make a deposit on the card. The card's limit is the therefore only controlled by the amount of money you've deposited onto the card, minus of course the amount of money you've withdrawn from your card. :-)

The upside of a CC like this is that it can be used like almost any other CC, you pay for goods/services with it, shop on the web, and withdraw cash from ATMs (provided you can withdraw cash from the ATM with a regular MasterCard card).

There are certain downsides to a card like this. Downsides include no payment schedules (i.e. paying for an expensive item by having your CC company charge your card for X dollars for Y months until you've paid for the item in full). Also it's not possible to put your other bills on the CC (like phonebills and utility bills etc).



[ Parent ]
Grace period (2.12 / 8) (#76)
by marx on Fri Aug 22, 2003 at 08:43:26 AM EST

I don't believe there is such a thing as a grace period. You must have misunderstood the terms you were given, or else there is something else you are hiding.

If there would be such a thing as a grace period, then it would allow indefinite interest-free loans of up to the maximum of the card. The assumption is that there is no interest between the date of the purchase and the date of the bill. This means that I can have two cards, which indifinitely pay each other's bills, for an initial purchase of the maximum of the cards.

I'm sure there is some restriction which prevents this from happening, such as the inability to use credit cards to pay bills, but then that is a severe disadvantage that you have not stated.

Join me in the War on Torture: help eradicate torture from the world by holding torturers accountable.

Doesn't apply to cash transfers (5.00 / 1) (#78)
by squigly on Fri Aug 22, 2003 at 09:09:40 AM EST

Interest is charged daily on cash transfers.  

Actually, a lot of CC companies seem to be offering several months 0% interest on cash transfers as an introductory offer, so you probably could do this trick until you run out of card companies.

[ Parent ]

Credit card "free money games" (none / 0) (#139)
by smithmc on Fri Aug 22, 2003 at 01:46:38 PM EST


Actually, a lot of CC companies seem to be offering several months 0% interest on cash transfers as an introductory offer, so you probably could do this trick until you run out of card companies.

I know a couple of people who have done this. It works for a while, but it always catches up to you in the end. For one thing, it doesn't exactly help your credit rating, which makes it harder to get new cards to play with.

[ Parent ]

Grace period (5.00 / 3) (#82)
by CaptainSuperBoy on Fri Aug 22, 2003 at 09:44:42 AM EST

There is almost always a grace period on purchases, but never on cash advances, which is what you're talking about. One point that was left out of the article is, never take cash advances or balance transfers unless it is absolutely necessary, i.e. the Mexican mechanic should be holding your car hostage for cash before you think about getting an advance. Interest builds up from day 1, usually at a higher rate. In addition your company takes an advance fee right off the top, which is a percentage of your advance.

I don't understand, why would he be 'hiding something else?' He doesn't have anything to gain from this article.

You could conceivably buy a lot of stuff, sell it for cash, and pay off your cards. Personally I have better things to do with my time than move thousands of dollars of merchandise every 2 weeks for no profit.

--
jimmysquid.com - I take pictures.
[ Parent ]

TANSTAAFL (2.00 / 3) (#106)
by marx on Fri Aug 22, 2003 at 10:40:39 AM EST

There is almost always a grace period on purchases, but never on cash advances, which is what you're talking about.
Well, this piece of quite crucial information is left out of the article. A big part of my (and other people's) spending could be classified as "cash advances", i.e. bills such as mortgage payments, rent, utility bills, etc. It's really only "luxury" stuff such as trinkets, gadgets, partying, etc. which can be paid with credit cards, and why should I have an extra incentive to waste more of my money on these things? It's also inevitable that I will end up paying a bill with my credit card, once I get used to spending more than I actually have.
I don't understand, why would he be 'hiding something else?' He doesn't have anything to gain from this article.
Of course he does. He wrote this article to explain to us how he has found a superior lifestyle, which includes using credit cards. If it turns out that using credit cards is bad, then that means his lifestyle is crap.

The article gives the appearance that it's possible to trick the naive and foolish credit card companies out of money, since they apparently are dumb enough to give "grace periods". I.e., he wrote:

If you make a lot of purchases, and keep your money in interest-bearing accounts until payment, this can make you, over time, quite a bit of extra interest
Has he miraculously found a way to trick money out of the credit card companies, or does this money turn up somewhere else? Do the merchants pay the 3% loss on purchases from their own pockets?

My guess is that if the merchants have to pay 3% to the credit card companies, then they will add that 3% to the price. So promoting the use of credit cards effectively raises the prices for everyone, including those that don't use credit cards.

Join me in the War on Torture: help eradicate torture from the world by holding torturers accountable.
[ Parent ]

FUD (none / 0) (#110)
by CaptainSuperBoy on Fri Aug 22, 2003 at 11:22:37 AM EST

It's also inevitable that I will end up paying a bill with my credit card, once I get used to spending more than I actually have.

Once you get used to spending more than you have? If you are that immature about your spending, you're correct: a credit card is not for you.

Whether you know it or not, you're just spreading FUD. Utility bills go in as purchases. Anything you charge directly to the card goes as a purchase and has a grace period. Mortgage and rent are probably not chargeable. You will never charge something to the card and find out later that it is a cash transaction. The only way you can do that is if you get cash out of an ATM, use one of the checks they send you, or do a balance transfer.

He wrote this article to explain to us how he has found a superior lifestyle

I'm not even going to respond to that, except to ask that you look back and think, 'is that the most plausible reason for writing this article?'

The article gives the appearance that it's possible to trick the naive and foolish credit card companies out of money

It's not tricking anyone out of money. They know that some people are responsible credit card users, yet they still offer us cards. Why is that?

Do the merchants pay the 3% loss on purchases from their own pockets?

FUD again. Yes, they do. It's illegal for them to charge you extra. Do your reading before mouthing off about stuff you obviously don't understand.

If you're bothered by merchants passing that fee onto all customers, as opposed to just credit card users, feel free to find a merchant who doesn't take credit cards.

--
jimmysquid.com - I take pictures.
[ Parent ]

Mortgage Payments? (none / 0) (#134)
by FantocheDoSock on Fri Aug 22, 2003 at 01:23:44 PM EST

A big part of my (and other people's) spending could be classified as "cash advances", i.e. bills such as mortgage payments, rent, utility bills, etc.

You would pay your mortgage with a credit card?

**PSSHT** THIS IS THE FINANCE PATROL. WE HAVE YOU SURROUNDED. PUT DOWN THE CREDIT CARD AND COME OUT WITH YOUR HANDS UP. **PSSHT**



[ Parent ]
Why not? (none / 0) (#150)
by marx on Fri Aug 22, 2003 at 02:21:23 PM EST

If it doesn't cost me anything extra, and there's no interest, why shouldn't I?

Join me in the War on Torture: help eradicate torture from the world by holding torturers accountable.
[ Parent ]

Eventually (none / 0) (#164)
by FieryTaco on Fri Aug 22, 2003 at 04:20:30 PM EST

Eventually you are going to have to make that payment from your own pocket rather than putting it on a card and holding actual deduction from your pocket off. When that finally happens, you'll be looking at a situation where you have two (or more I suppose) payments to make in one month, or a ever extending practice of carrying a months mortage payment on your credit card.

[ Parent ]
So? (none / 0) (#186)
by ZorbaTHut on Fri Aug 22, 2003 at 06:50:30 PM EST

I guess I don't see the problem here. If you make sure you have the money, it's not a problem - I personally have about a year's rent in the bank, so if I suddenly needed to pay two months at once, gasp! . . . actually I wouldn't care at all.

On the other hand, keeping a month's rent on the credit card at all times is basically like having a month's extra to invest somewhere. Investing $500 for a year gives you an extra $50 or so. Congrats, you've made $50 by doing absolutely nothing, and due to the wonders of compound interest, next year you'll make $55. Sure, someday you'll have to give that $500 back, but so what? It was never really yours to begin with . . . you were just borrowing it, and if you weren't certain you could get it back, you shouldn't have spent it in the first place.

[ Parent ]

Have you ever had a credit card? (4.50 / 2) (#141)
by ethereal on Fri Aug 22, 2003 at 01:51:36 PM EST

The author is entirely accurate: you can buy whatever you would normally buy for the month, pay it at the end of the month, and possibly get a reward and/or cash back as well. You pay no interest, so you're not out any more money than you normally would have been. I've only paid interest on a credit card bill once in 10 years of having them (immediately after moving when free cash was more important than ~$15 in interest the next month), and I've probably made about $100 just this year in cash back, etc.

The only trick to it is remembering that your credit limit is not the stated card credit limit; your credit limit is actually the amount of money in your checking account at the end of the month when the bill comes due. Don't spend more than that on the card (and in fact you don't really want to approach that value very closely) and it works fine. For me, at least, there isn't much temptation to spend beyond my means, although I can agree that not everyone could say the same thing.

I don't think anybody is saying that CC companies are "naive and foolish"; or at least I didn't get that from the article. They base their business model off of the fact that most people aren't willing to pay off their balances every month. So in a sense the financially imprudent are subsidizing the paid-in-full-monthly people. I'm sure that if the system were no longer profitable for CC companies, they'd drop it in a heartbeat.

There probably is some cost to the merchants as well, but it is reasonable to expect them to pay some amount for using the CC system since they get benefits from it as well (presumably customers are more willing to buy?). If the cost is higher than their benefit, then they can just drop out of the system, or stop accepting certain cards. If costs are passed on to customers and the customers don't like it, they'll take their business elsewhere. It's nothing to get excited about; just a mostly-efficient marketplace at work. Nobody's getting a free lunch, and anyone can walk away if they think they're getting a bad deal.

--

Stand up for your right to not believe: Americans United for Separation of Church and State
[ Parent ]

Market place (3.50 / 2) (#152)
by marx on Fri Aug 22, 2003 at 02:45:37 PM EST

It's nothing to get excited about; just a mostly-efficient marketplace at work. Nobody's getting a free lunch, and anyone can walk away if they think they're getting a bad deal.
As always, this kind of marketplace reasoning assumes that everyone has full information. Most people are probably not aware that they just sent $30 to the credit card company when they bought their $1000 computer. They would probably just as well have paid $970.
So in a sense the financially imprudent are subsidizing the paid-in-full-monthly people.
I don't consider a system which is based on squeezing money out of the financially imprudent to be attractive. The people who are financially imprudent typically have enough problems as is, and are not in a position to be subsidizing those who are better off.

Join me in the War on Torture: help eradicate torture from the world by holding torturers accountable.
[ Parent ]

fair enough. (none / 0) (#303)
by ethereal on Mon Aug 25, 2003 at 02:20:52 PM EST

There's nothing to stop a company from offering a lower price for non-credit-card purchases, at least on big-ticket items where it's worth it. I wonder why they don't - do the credit card companies make them sign an agreement not to do so? The merchant could even offer to split the difference with the patron and actually profit from doing this.

Perhaps I'm merely self-justifying my wicked ways, but I don't think that it's "squeezing" anybody. There are plenty of markets in the world (in fact, almost all of them) where you can pay less if you take the time to understand the rules of the game, or you can pay more if you're in a hurry or just lazy. I view it as getting a premium or a discount for taking the time to fully grok the system. It's not that everyone else is being taken advantage of; lots of people could (and do) get the same good deal every day. The system wouldn't work if everybody did it, but I'm not too worried about that occurring :)

We do need a lot better financial education in middle school and high school, I agree. Although I benefited from a technical education, many people would be a lot better served by a year of financial preparation for the real world than by Algebra II. Credit cards, auto loans, mortgages, investing, etc. all require some knowledge about how to do the research up front, and I don't think a lot of people are getting this education at the moment. Otherwise consumer debt wouldn't be such a huge amount per capita.

--

Stand up for your right to not believe: Americans United for Separation of Church and State
[ Parent ]

I've seen it several times... (none / 0) (#163)
by FieryTaco on Fri Aug 22, 2003 at 04:14:57 PM EST

I don't think anybody is saying that CC companies are "naive and foolish";
OK everybody let's stop and take a thought here. For each credit card in your pocket there are two companies involved. First there is the card system company, this would be Visa, Mastercard, etc. Then there is the bank that you have your account with. The card system company does not, in any way, ever extend credit to card holders [1]. The credit line is extended by the bank. The card system company makes it's money by taking a small percentage of every transaction. The bank takes a small percentage of every transaction plus any fees and interest.

[1] - Some card system companies may extend credit. I don't know how Amex, Discover, Diners Club, etc. do their business. But VISA, Mastercard and friends do not loan you money.

[ Parent ]

I think Discover does it all. (4.00 / 1) (#302)
by ethereal on Mon Aug 25, 2003 at 02:12:34 PM EST

Or at least I've never seen them refer to an external bank. I know what you're talking about - you get an "MBNA Mastercard", for example. I don't think you can get a "Company X Discover Card", though - it's both a system and a crediting entity AFAIK.

--

Stand up for your right to not believe: Americans United for Separation of Church and State
[ Parent ]

Visa and MC are... (none / 0) (#328)
by kmself on Sat Aug 30, 2003 at 03:19:21 AM EST

...member organizations. Co-Ops, in fact. They're very nearly synonymous with the member banks (leading to a number of anti-trust concerns, etc. Yes, the description of payments and income sources is somewhat accurate. Visa (at which I've contracted) is two things: a marketing organization, and a hellacious transaction-processing system.

The difference being that Discover and AmEx, while similarly self-contained organizations (if you'd define Visa/MC +_banks as self-contained) is that Discover/AmEx don't have the storefront presence of a large brick-and-morter bank network. The DoJ has been interested in the business because of this.

--
Karsten M. Self
SCO -- backgrounder on Caldera/SCO vs IBM
Support the EFF!!
There is no K5 cabal.
[ Parent ]

Hehehe (4.00 / 1) (#228)
by awgsilyari on Sat Aug 23, 2003 at 12:39:41 PM EST

There is almost always a grace period on purchases, but never on cash advances

I have a card with a full grace period on cash advances. It's from a credit union, not a bank. No, I'm not gonna say where to get it -- you have to be an employee of a "member company."

Believe me, the ability to have a grace period for cash advances makes it possible to play some very complicated tricks with money. For example I can carry a balance indefinitely without ever accruing interest.

But such a card is apparently extremely rare, since everyone I have told about it thinks I'm making shit up (until I show them on the website).

--------
Please direct SPAM to john@neuralnw.com
[ Parent ]

Grace period (5.00 / 3) (#88)
by ad hoc on Fri Aug 22, 2003 at 09:59:13 AM EST

The grace period only applies to purchases made during that period, not to purchases you made in prior periods but have not yet paid in full. If you carry a balance to next month, there is no grace period for the amount carried forward. So, you get one grace period per purchase. That is, the amount listed in "new purchases." (But, as others say, it does not apply to cash advances.)


--

[ Parent ]
New purchases (1.00 / 1) (#133)
by marx on Fri Aug 22, 2003 at 01:23:00 PM EST

Yes, but the idea was to pay the bill from card #1 with card #2, and then when the bill for card #2 comes, you pay it with card #1. This would make the payment a "new purchase" every time.

As has been explained though, you cannot pay bills with credit cards, which for some reason was left out of the article.

Join me in the War on Torture: help eradicate torture from the world by holding torturers accountable.
[ Parent ]

Bills (3.00 / 1) (#136)
by CaptainSuperBoy on Fri Aug 22, 2003 at 01:29:39 PM EST

You can pay most bills with a credit card. For obvious reasons you can't pay a credit card bill with another credit card. Aside from that, you are simply wrong. I pay my cable bill with a credit card every month.

--
jimmysquid.com - I take pictures.
[ Parent ]
Interest (3.00 / 1) (#156)
by marx on Fri Aug 22, 2003 at 02:56:44 PM EST

For obvious reasons you can't pay a credit card bill with another credit card.
Which are these obvious reasons? What makes a credit card bill different from any other bill?
I pay my cable bill with a credit card every month.
Yes, but the idea was to pay a bill with a credit card with no money in your account, and still manage to pay no interest. Unless your cable provider pays the 3% or whatever to the credit card company, then I don't think you can manage that.

Join me in the War on Torture: help eradicate torture from the world by holding torturers accountable.
[ Parent ]

Pedantry (2.00 / 1) (#191)
by CaptainSuperBoy on Fri Aug 22, 2003 at 07:39:13 PM EST

Now you're just being pedantic. You can't pay a credit card bill with another credit card because that would be universally exploited as a loophole. There's no great financial reason behind it - cc companies just don't want to get screwed.

Yes, but the idea was to pay a bill with a credit card with no money in your account, and still manage to pay no interest. Unless your cable provider pays the 3% or whatever to the credit card company, then I don't think you can manage that.

Do your reading. You certainly can pay your bills with a credit card and pay zero interest, as long as you pay within the grace period. Did you, at some point, make a conscious decision to not even educate yourself about basic finance due to your philosophical opposition to it?

--
jimmysquid.com - I take pictures.
[ Parent ]

Thanks for not answering (3.00 / 1) (#208)
by marx on Sat Aug 23, 2003 at 01:59:47 AM EST

Apparently you don't know what is happening when you pay your cable bill with your credit card. This is what happens:
There is an emerging downside, however. Some institutions are trying to pass along the expense of charging back to people. Universities in particular have been taken aback by the popularity of charging tuition as mileage-obsessed parents gleefully paid their bills with credit cards. For the schools, the 2% fee they must pay the card companies has added up to millions of dollars. Williams College has dropped its credit-card program altogether, tired of losing tens of thousands dollars in fees simply to subsidize the vacations of affluent parents.

[...]

This tactic is similar to one the Internal Revenue Service uses. Anyone who wanted to pay his or her taxes with a credit card this year was free to do so, but the IRS tacked on a 2.5% "convenience fee."

-- WSJ
The first reform concerns the setting of interchange fees, the fees charged by a cardholder's financial institution to a merchant's financial institution. Since the cost of these fees is passed on to merchants by their own banks in the form of merchant service fees, the RBA [Reserve Bank of Australia] considers that they are ultimately paid for by consumers in the form of higher prices.
-- CFO Magazine

So each time you pay your cable bill, then 2% of that is sent to the credit card company. Let's say you pay all of your bills, say $1000 every month, with a credit card. $20 of that goes directly to the credit card company. If you would have paid it with a debit card, and the credit company would be out of the picture, then you would only have had to pay $980.

It seems that credit card users live in a fairy land, where some magical entity has set up everything to be as profitable and easy as possible just for them. I don't consider these 2-3% transaction fees to be reasonable. A single bill or purchase of $10000 becomes $200-$300 in transaction fees, which I ultimately have to pay. I simply cannot see how you could possibly justify $200 as a fee for a single transaction. 10 cents per transaction is reasonable, not $200.

So the conclusion is that all of these "grace periods" and "cash back" schemes are just a scam to make you believe you are saving money by using credit cards. The fact is that the more you use credit cards, the more money you lose. The only way to not lose money by using a credit card is to use it very rarely, so that the total fees stay in some kind of proportion to the convenience.

Join me in the War on Torture: help eradicate torture from the world by holding torturers accountable.
[ Parent ]

You're an idiot. (none / 0) (#220)
by CaptainSuperBoy on Sat Aug 23, 2003 at 07:03:21 AM EST

You're an idiot. You might as well have a problem with businesses paying for advertising - "I don't consider it reasonable that businesses spend my money on marketing." They can spend the money on whatever they want, and they obviously think credit cards are a no-brainer.

--
jimmysquid.com - I take pictures.
[ Parent ]
Free (none / 0) (#221)
by marx on Sat Aug 23, 2003 at 07:37:30 AM EST

You're also free to spend your money on whatever you want, like credit card fees. However, this article was about which was cheaper, and spending your money on credit card fees is obviously not cheaper than avoiding doing so.

Join me in the War on Torture: help eradicate torture from the world by holding torturers accountable.
[ Parent ]

Except... (none / 0) (#279)
by DavidTC on Sun Aug 24, 2003 at 02:56:33 PM EST

...you're not spending your money on credit card feees, you're spending the business's money on credit cards fees.

Which might be a reasonable argument for them not to take credit cards, or a reasonable argument for them to try to weasel out of their contract with the credit card company, which explictly says they can't offer discounts to non-credit card users, but I'll be damned if I can see how it's an argument for you to stop doing something.

It's like public restrooms. Most non-food places don't have to offer them. Many do anyway, and it costs them money. They've obviously done some cost/benefit analysis and decided the costs of installing and maintaining them is worth it. Whether it is or not, saying that customers shouldn't use them is silly. The restrooms already exist, not using them isn't saving us any money.

Now, if the place has managed to sneak out of the agreement, or is just offering discounts 'illegally' to cash or check customers, then people can decide if they want to spend $1000, but have months to pay it back, or $980 dollars, but have to pay it right then. But people already know this, and do not have to be informed of it.

-David T. C.
Yes, my email address is real.
[ Parent ]

Credit vs. debit (none / 0) (#237)
by kindall on Sat Aug 23, 2003 at 02:21:57 PM EST

Let's say you pay all of your bills, say $1000 every month, with a credit card. $20 of that goes directly to the credit card company. If you would have paid it with a debit card, and the credit company would be out of the picture, then you would only have had to pay $980.

Well, no. Because as long as the company takes credit cards, they will factor the 2% into all their prices. They don't know in advance how many people will pay with credit cards, and therefore they will raise their prices 2% for everyone. So you're going to be paying $1000 no matter how you pay, it's just a choice of who you want to get the extra 2%.

Also, if you paid it with a debit card, the merchant still would have paid a fee or a transaction charge. If the debit card was processed as a credit card, the fee would be exactly the same as if you'd used a credit card. If it was processed as a debit card the fees are, I believe, currently somewhat lower, but the banks see no reason why they should be lower, and have been raising them.

[ Parent ]

Points in Favor (5.00 / 2) (#151)
by virg on Fri Aug 22, 2003 at 02:38:17 PM EST

> Yes, but the idea was to pay the bill from card #1 with card #2, and then when the bill for card #2 comes, you pay it with card #1. This would make the payment a "new purchase" every time. As has been explained though, you cannot pay bills with credit cards, which for some reason was left out of the article.

If you heard that, you heard incorrectly, and that's why it's not in the article. You can indeed pay a credit card with a cash advance from a different credit card. It's done all the time. The catch is that, for most credit cards, there's no grace period applied to cash advances, even while the advance runs concurrently with a grace-period-enabled purchase. So, while you can pay one card with another, you don't usually benefit in terms of saving interest, unless the card you borrow from has a better rate than the one you pay off. Still, that doesn't encroach on the idea that you can buy stuff on a regular credit card, then pay the bill when it arrives and pay no interest, and you can (in a pinch) defer payment and still stay in good standing with both cards by passing the money back and forth. It can get expensive, but if you're in a bind it's a viable way to protect your credit rating for a little while.

One item of note, for completeness: if both cards are issued by the same bank, it's likely that your card agreement disallows this, so be sure that if you hold two cards, they're issued by different financial companies. Also, keep in mind that the bank listed on the back of the card (MBNA is one big one in the U.S.) is the holding bank, not whatever's on the front. Check your card agreement booklet to be sure.

Virg
"Imagine (it won't be hard) that most people would prefer seeing Carrot Top beaten to death with a bag of walnuts." - Jmzero
[ Parent ]
Grace period (2.00 / 1) (#155)
by marx on Fri Aug 22, 2003 at 02:51:32 PM EST

The catch is that, for most credit cards, there's no grace period applied to cash advances
The entire argument hinged on the fact that you would not have to pay interest. If you have to pay interest on your payments or purchases, then a credit card is much more expensive than a debit card. And as far as I can see, if you pay any kind of bill, with a zero balance in your account, then that is seen as a cash advance, which incurs interest. The article didn't mention anything about this.

Join me in the War on Torture: help eradicate torture from the world by holding torturers accountable.
[ Parent ]

Cash advances (none / 0) (#238)
by kindall on Sat Aug 23, 2003 at 02:27:46 PM EST

If you pay, for example, your cable TV bill or your phone bill with a credit card, that is treated as purchase, not as a cash advance, and will qualify for your grace period. A cash advance is when you go to the bank, plunk down your card (or stick it in the ATM) and say "gimme $500." Some credit cards also provide "convenience checks" which are processed by the bank as a check, not as a credit card charge, and these too usually count as cash advances. So if a utility or whatever will accept a credit card, yes, you can defer payments for the grace period interest-free by paying with the card. Many do.

[ Parent ]
Right (none / 0) (#242)
by marx on Sat Aug 23, 2003 at 04:13:39 PM EST

I jumped to the wrong conclusion about this.

The point still stands though, that paying the bill with your credit card is not "free". If it's a purchase, then the credit card company still gets 3% (or 2% or whatever) of the bill as a fee. For a "grace period" of one month, this translates to 3 * 12 = 36% in interest. So I really think it's bizarre to talk about being able to get money "interest-free" during this grace period. It's just a different name, and it's hidden from you.

Join me in the War on Torture: help eradicate torture from the world by holding torturers accountable.
[ Parent ]

This Isn't That Hard (none / 0) (#291)
by virg on Mon Aug 25, 2003 at 09:49:42 AM EST

> The point still stands though, that paying the bill with your credit card is not "free". If it's a purchase, then the credit card company still gets 3% (or 2% or whatever) of the bill as a fee. For a "grace period" of one month, this translates to 3 * 12 = 36% in interest. So I really think it's bizarre to talk about being able to get money "interest-free" during this grace period. It's just a different name, and it's hidden from you.

It's not hidden from you at all. It's not applied to you. The company that takes the credit card pays the fee, for the convenience of getting their money right away, and not having to pay bank processing fees on a check that you'd otherwise have mailed. While it's not "free" in the strictest sense, it costs the business less to pay that fee than process a check, and you never have to pay or worry about the fee, so it's "free" to most people's way of thinking. You do indeed get the money interest-free, because someone else pays the fees.

Virg
"Imagine (it won't be hard) that most people would prefer seeing Carrot Top beaten to death with a bag of walnuts." - Jmzero
[ Parent ]
You can do that for a while (4.00 / 1) (#180)
by ad hoc on Fri Aug 22, 2003 at 06:07:28 PM EST

if you're willing to get a brand new card every month to do it with. Most new cards come with a "balance transfer" option where you can transfer the entire balance of an existing card to the new one and pay no finance charge for the first month. However, you'd soon run out of cards since every new card comes with a credit check and it would only take about two months for them to see what you were up to and decline to give you the new card.


--

[ Parent ]
Well.. (4.00 / 1) (#105)
by jmzero on Fri Aug 22, 2003 at 10:40:28 AM EST

(Other comments have explained situation well enough).

It's also important to realize that there often ARE loopholes if you look hard enough.  I have a friend who has made hundreds and hundreds of dollars by taking advantage of a "cashback" on "convenience cheques" (which are treated like credit card payments typically, but which can also be used for a cash transfer to yourself).
.
"Let's not stir that bag of worms." - my lovely wife
[ Parent ]

Why don't you believe. (4.00 / 1) (#249)
by mindstrm on Sat Aug 23, 2003 at 07:14:17 PM EST

I make a purchase.
I have 21 days to pay it. If I pay the amount within 21 days of the purchase, I pay no extra fees, no interest, nada.

In which way is it "Not a grace period?"

As for using one card to pay off the other... some sorts of payments are considered "cash advances" and are not the same as a purchase; there is no grace period on cash advances.
Furthermore, credit companies often do not accept credit cards as a means of payment, and rightly so.

Many cards, when you get them, allow a one-time "balance transfer" from other credit cards.. this is a nasty practice that lets people get severely in debt.

[ Parent ]

Thank you (4.00 / 2) (#80)
by Noodle on Fri Aug 22, 2003 at 09:36:37 AM EST

As someone who has just landed his first full-time job and will no longer find it convenient to borrow his parents credit card for online purchases, I found this article very useful.

{The Nefarious Noodle}

can't use parents' card? (5.00 / 1) (#144)
by smithmc on Fri Aug 22, 2003 at 01:57:02 PM EST


As someone who has just landed his first full-time job and will no longer find it convenient to borrow his parents credit card for online purchases

Why, did your parents find a new hiding place for it? ;-)

[ Parent ]

somewhat offtopic: debit cards and language (3.00 / 4) (#84)
by guyjin on Fri Aug 22, 2003 at 09:46:58 AM EST

One of the minor nuisances in my life is using ATMs.

They often work in bizzare or unexpected ways. For example, one of my bank's ATM's always asks if you want to do another transaction, and if you say no, you get your card back. Another (same bank) simply spits out the card at the end of the transaction without warning.

But my biggest pet peeve is having to tell it wether I want menus in english or spanish. They must have a free bit or two on that little magnetic stripe that could tell the machine that I speak English. Why don't they do that?
-- 散弾銃でおうがいして ください

Language (5.00 / 2) (#93)
by geesquared on Fri Aug 22, 2003 at 10:09:13 AM EST

Are you sure you are using the same sort of transaction at both banks? At my bank, I have an "express money" option which just assumes I want cash and nothing else. Enter PIN, say I want cash, pick an amount from the menu, boom, out comes cash, slip, and card. When I use another bank's ATM, I usually have to say "No, I don't want another transaction" after getting cash.

My bank totally screwed me up for a while by suddenly inserting a "please choose you language" option into the normal flow. Having done the same thing for 10 years, I'd just stick my card in and start keying my PIN immediately, not really looking at the screen. Well, pressing a number on the keypad selected Chinese (or something) from the language menu, so I'd look up and see something in Chinese, presumably telling me I screwed up my PIN, since it ate the first digit.

That menu didn't last long. I'm not sure if they simply disabled it because people like me bitched about it non-stop, or they finally got wise and recorded your choice someplace. They don't even have to store the language on your card... they can just send the language preference back with the confirmation of your PIN.

Hmm... that could be a great added ATM security feature if you're able to read some obscure language. If someone does rip off your card, and is able to get your PIN, what's the chances they'd be able to negotiate the menus in Swahili in order to get at your cash?

[ Parent ]

Language wouldn't be a deterrent to theft. (5.00 / 1) (#107)
by stak on Fri Aug 22, 2003 at 10:41:52 AM EST

It would be a nuisance but that's about it. Even though the display is different the motions are the same. Do a transaction in English and remember the appropriate keys. Even if you didn't I bet you could guess your way through it. Money is motivation.

[ Parent ]
Language (none / 0) (#108)
by guyjin on Fri Aug 22, 2003 at 10:47:46 AM EST

Are you sure you are using the same sort of transaction at both banks? At my bank, I have an "express money" option which just assumes I want cash and nothing else. Enter PIN, say I want cash, pick an amount from the menu, boom, out comes cash, slip, and card. When I use another bank's ATM, I usually have to say "No, I don't want another transaction" after getting cash.

I choose the same menu options on both machines. Err, actually, not quite; the order of things on the menu is upside down on one, presumably because one is a drive-thru that you look up at; the other is a walk-up you look down at. I wonder if that's why they behave differently.

My bank totally screwed me up for a while by suddenly inserting a "please choose you language" option into the normal flow. Having done the same thing for 10 years, I'd just stick my card in and start keying my PIN immediately, not really looking at the screen. Well, pressing a number on the keypad selected Chinese (or something) from the language menu, so I'd look up and see something in Chinese, presumably telling me I screwed up my PIN, since it ate the first digit.

That menu didn't last long. I'm not sure if they simply disabled it because people like me bitched about it non-stop, or they finally got wise and recorded your choice someplace. They don't even have to store the language on your card... they can just send the language preference back with the confirmation of your PIN.

Haha, funny story. Sadly, the only languages my ATMs support are Spanish and English. If I had to, I think I could navigate the menus in Spanish, but that may be more from knowing where things are than from knowing the Spanish language.

sending the language preference back with the pin confirmation would be a problem, 'cuz the machine has to ask you to put in your pin first. if the ATM supports too many languages, the 'enter your pin number' screen is gonna get really confusing really fast.


-- 散弾銃でおうがいして ください
[ Parent ]
Worse Here (5.00 / 1) (#167)
by holdfast on Fri Aug 22, 2003 at 04:48:18 PM EST

In the UK, I regularly get asked to choose between 3 languages - English/French/German. I'm sure it offered Welsh when I was in Wales. I wonder if they offer Gaelic in Scotland?


"Holy war is an oxymoron."
Lazarus Long
[ Parent ]
My problem (5.00 / 1) (#168)
by applespank on Fri Aug 22, 2003 at 04:50:44 PM EST

Out here most of the machines don't keep the card.  You slide it in and back out again.  You get used to not having to wait for the card to spit out at the end of transaction.  Then when you do encounter a machine that holds the card during a transaction, you forget to get it back and leave.  I leave my check card in the machine about once a year.  It's a wonder I haven't had my account drained, yet.

[ Parent ]
yup (5.00 / 1) (#170)
by coryking on Fri Aug 22, 2003 at 05:27:37 PM EST

I think that every damn time I hit "english" on the ATM. 8 bits ought to cover just about every major language out there. Is that too hard to ask? 8 bits!?

[ Parent ]
Some ideas: (4.66 / 3) (#89)
by lb008d on Fri Aug 22, 2003 at 10:00:38 AM EST

  • Call the card company and set a credit limit no higher than what you can pay in one pay period, and opt out of automatic credit limit raises.
  • Make a photocopy of the front and back of the card, and keep it somewhere safe. You never know when you'll need to call to cancel the card. I lost mine in NYC, realized it within 10 minutes, and had it cancelled because I had the card number and phone number memorized.


You forgot cost to the company (4.00 / 2) (#102)
by fluxrad on Fri Aug 22, 2003 at 10:36:04 AM EST

Debit cards cost something like $.30 a transaction at your local business, whereas credit cards cost most companies somewhere around $1.00 per transaction.

That money adds up, and guess where the business recoups that hidden cost?

I wish I could find that article on NPR :-/

--
"It is seldom liberty of any kind that is lost all at once."
-David Hume
It depends (5.00 / 1) (#115)
by atomicokc on Fri Aug 22, 2003 at 11:50:36 AM EST

This is not quite true. Depends on the purchase. I own a small retail business, so I don't get the best rates, but here's how I pay. For credit cards - 1.9% of the transaction. For debit cards - $.39 flat per transaction. So a $10.00 purchase on a credit cart costs me $.19, while the same on a debit would cost be $.39. It's not until I get to the $40.00 purchase mark that debit cards save me money. My average transaction is $30.00, so on a whole, Credit cards save me money. In fact, that major lawsuit that Visa and Mastercard went through? And the settlement all us stores are getting. It's because as part of our agreement we have to take debit cards if we take credit cards, which costs us money. Now they are paying us back. Wal-Mart and Best Buy opted to not participate in the settlement, and they figured this policy costs them someone around 20 million a year, they are going for a bigger bite.

[ Parent ]
Not exactly (none / 0) (#119)
by blakdogg on Fri Aug 22, 2003 at 12:30:25 PM EST

The suit against Mastercard and Visa was because they were forcing merchants to accept signature based debit cards, if they took credit cards. These debit cards allowed the owner to make purchases without using their pins. The are more expensive to the retailer than credit or pin based debit transactions. On the other hand these transactions generally came with more protection for the consumer.
Woe be onto the United Nations, there nothing but a front.
[ Parent ]
Flawed math? (5.00 / 1) (#127)
by dougmc on Fri Aug 22, 2003 at 01:13:35 PM EST

For credit cards - 1.9% of the transaction. For debit cards - $.39 flat per transaction. So a $10.00 purchase on a credit cart costs me $.19, while the same on a debit would cost be $.39. It's not until I get to the $40.00 purchase mark that debit cards save me money.
Using your figures, any purchase over $20.52 would be cheaper for you on the debit card, and anything less would be cheaper on the credit card. So wouldn't you start saving money at around $21 rather than $30?
My average transaction is $30.00, so on a whole, Credit cards save me money.
On a $30 transaction, the debit card cost would be $0.39, and the credit card cost would be $0.57. Of course, `an average transaction of $30' is not the same as `every transaction is exactly $30' -- if you've got one purchase of $2900 and 100 purchases of $1, the credit card would certainly save you money, but that's a rather extreme example.

Are you really sure that the credit cards are saving you money?

[ Parent ]

my guess (none / 0) (#257)
by dipierro on Sat Aug 23, 2003 at 08:06:00 PM EST

That money adds up, and guess where the business recoups that hidden cost?

From the increased sales due to accepting credit cards?



[ Parent ]
What's interesting are ATM fees. (none / 0) (#278)
by DavidTC on Sun Aug 24, 2003 at 02:39:58 PM EST

If you get cash back on a debit purchase, the business sometimes ends up having to pay the ATM fee your bank charges. (Not the fee the ATM changes, the fee your bank changes for using another bank's ATM.)

I don't think they have to pay the full $1.50 or whatever your bank charges (Mine charge me none! Haha! And it will pay three fees the owner of another ATM charges me a month.), but at Walmart, when I worked there, the other employees claimed that Walmart lost money on the entire transaction when someone purchased anything under ~$1 and got cash back, that Walmart had to pay more than it received just to get the transaction to go though. (Not to mention basically having to write off whatever was 'purchased'.)

Which, BTW, is the best way to avoid the 'find your bank's ATM' problem...just don't use them. Go into a store and buy a box of tictacs, and get cash back. It's cheaper than using someone else's ATM, and you get a box of tictacs or whatever. Do this to stores you don't really like, like Walmart, not local gas stations barely staying afloat. (Although plenty of gas stations that accept debit will not do cash back for exactly this reason.)

-David T. C.
Yes, my email address is real.
[ Parent ]

cheap gas stations, cash/debit discounts, etc. (none / 0) (#339)
by gps on Tue Sep 02, 2003 at 09:39:40 PM EST

this is exactly why the cheap gas stations don't accept credit cards (only debit and cash) and that its really impolite to pay with a credit card at a non-chain store when you don't have to.

Its also why REI gives you a 2% lower end-of-year rebate on purchases made using a credit card (other than their own card that they get interest rate kickback from suckers on naturally).

(chain stores have huge deals with the credit card companies for better rates and are often corporate scum anyways so who gives a fuck...)

[ Parent ]

Wiring money (3.50 / 2) (#112)
by Francis on Fri Aug 22, 2003 at 11:47:14 AM EST

Perhaps someone has mentioned this..? I have read a couple of warnings about cash advances, but have not seen anyone mention wiring money. When you wire money via a commercial courier (e.g. Western Union) it usually will post to your credit card as a cash advance, which sort of makes sense, I suppose, but still took me by surprise. Consequently, you will end up paying higher interest for this and will not usually get a grace period.
_ _ _ _ _ _ _

Insults are the first and last arguments of fools. -- Unknown

Depends... (none / 0) (#137)
by sbalea on Fri Aug 22, 2003 at 01:33:52 PM EST

... on what service and what card you use. For example, if you send money with c2it and use a citibank card, it's considered a purchase and you benefit from the grace period and the low APR. Unfortunately they recently added a fee of 2% of the amount you transfer, but still, it's better than a cash advance (the transaction is still a purchase).
When the thing was free, you could actually make money of it, by getting a cashback citibank card (Platinum Dividend) and bouncing some money back and forth with a friend...

[ Parent ]
No such luck for me... (none / 0) (#266)
by Francis on Sun Aug 24, 2003 at 02:09:48 AM EST

I used Western Union's online service, and the card was not Citibank. I only assumed, since I was using a credit card for an online transaction, that it would post as a purchase. I was quite surprised to find otherwise.
_ _ _ _ _ _ _

Insults are the first and last arguments of fools. -- Unknown
[ Parent ]

It's a loophole. (4.50 / 2) (#276)
by DavidTC on Sun Aug 24, 2003 at 02:26:32 PM EST

Credit card companies do not want anyone ever under any circumstances turning credit on a credit card into cash, without paying the fee.

Many credit cards offer cash back, and many offer a grace period. If you could turn it into cash, then you could simply get an interest bearing checking account, dump all your money from your credit card in there, and write a check at the end of the grace period for the full amount, and make a few cents. Meanwhile, the credit card company makes no money at all, and has to pay you cash back.

To keep people from exploiting this, any transaction that might turn into cash has a fee. So realize that, if, at the end of something, someone ends up with cash in their hand, they're going to want to change a fee, and probably do, unless the situation is really exotic and no one at the CC company thought of it yet.

-David T. C.
Yes, my email address is real.
[ Parent ]

Rental Car Companies don't take debit cards (4.00 / 2) (#116)
by GGardner on Fri Aug 22, 2003 at 11:55:51 AM EST

Many people and think that you can use credit cards or debit cards interchangeable, but many rental car companies will not take debit cards, only credit. I've seen several people who didn't know this stuck in airports, unable to rent a car, because the only had debit cards, no credit cards.

Visa Debit Card (2.00 / 1) (#122)
by robot138 on Fri Aug 22, 2003 at 12:43:22 PM EST

True enough. The debit card I've got has a little Visa logo on it and can be run like a credit card...
e.b.a.c
a.a.r.o
s.y.t.r
t._._.e

[ Parent ]
VISA or not, many rental agencies will not take it (4.00 / 2) (#125)
by sh0x on Fri Aug 22, 2003 at 01:07:28 PM EST

I can't speak for other rental agencies, but Hertz Rent-a-Car will not take a debit card, even if it has a VISA logo. I know this for a fact because I used to be a rental agent there. I have seen many people try and we have never, to my knowledge, ever made an exception. The reason is that you can only put a "hold" (reserving a dollar amount without actually charging it) on a debit card for 48 hours. Since you can rent a car for many weeks, by the time you return the car we have no guarantee of payment. They can do this, however, with a real credit card.

[ Parent ]
Exactly! (3.00 / 1) (#138)
by GGardner on Fri Aug 22, 2003 at 01:45:52 PM EST

This is exactly the problem! The bank who issued the debit card tells you that it works "just like a credit card". Pretty much everywhere else you can use it just like a credit card. It even looks like a credit card, with the VISA logo on it. But try to use it at a rental car company, and BZZZT, you lose.

[ Parent ]
VISA debit update (none / 0) (#281)
by teqjack on Sun Aug 24, 2003 at 03:03:52 PM EST

You may not be aware of it, but VISA is encouraging holders of debit cards routed via their servers to use them as credit cards - in fact, at one store recently my card was declined as a debit card but accepted as a credit card. So a car rental agency (or such) might not know the difference as long as there is enough in my account to cover the "hold". There is, of course, method behind this. I have discovered that Visa charges the merchant about $0.50 for passing a debit request to a bank, but $1.50 for processing a "credit" check... That said, I agree there other advantages to an actual credit card and some for debit cards. I want both, let me know the differences, and use whichever (or cash, or even barter) seems appropriate in a particular transaction.

[ Parent ]
You lie (none / 0) (#256)
by dipierro on Sat Aug 23, 2003 at 08:03:00 PM EST

The reason is that you can only put a "hold" (reserving a dollar amount without actually charging it) on a debit card for 48 hours.

'

That's absolutely untrue. From the paypal debit card agreement:

If the merchant makes such a request, we place a ten-calendar day hold on your PayPal account for the amount of the preauthorization request

Considering your lack of knowledge on that point, I wonder if you're just making up the whole "Hertz Rent-a-Car will nottake a debit card" statement. Hertz can't tell the difference between a debit card and a credit card.



[ Parent ]
No, he's right (none / 0) (#267)
by tjb on Sun Aug 24, 2003 at 02:30:47 AM EST

My first ever business trip, my company reserved a car for me through Hertz.  They asked for a credit card.  My credit cards were at the limit from my days as a no income student (they have since been cleared and get paid off every month).  I offered up a (Visa) debit card with enough in the bank to hold a car for around 3 months.

No go.

A royal pain in the ass ensued and I ended up having to rent from a shady cash-only local place across the street.  Hertz, Enterprise, etc. would have nothing to do with me if I didn't have a credit card.  (and being under 25 complicated things, but that was cleared up by calling my boss)

Tim

[ Parent ]

He might be right about that (none / 0) (#273)
by dipierro on Sun Aug 24, 2003 at 01:39:30 PM EST

but he's most certainly wrong about the 3 day hold.

[ Parent ]
Pardon me (none / 0) (#283)
by sh0x on Sun Aug 24, 2003 at 08:11:13 PM EST

Pardon me if I got the maximum hold time wrong, but that was the explanation I was given during training for why they won't take debit cards. Incidentally, there is so much crap to know in general before working as a counter sales rep at Hertz they give you 80 hours of training before or soon after you start. They ship you off to Chicago for 2 weeks. So keep in mind, do some research in advance before renting a car. The best gem I can give you is never rent a car without a reservation. Pick up the phone on the counter, call the reservation desk, make a reservation, and then say, "Hi, I have a reservation." You wouldn't believe the difference in price.

[ Parent ]
well you're still wrong (none / 0) (#308)
by dipierro on Mon Aug 25, 2003 at 05:44:15 PM EST

Pardon me if I got the maximum hold time wrong, but that was the explanation I was given during training for why they won't take debit cards.

You shouldn't believe everything you hear. Maybe you heard wrong about other things as well.



[ Parent ]
ah. (none / 0) (#296)
by robot138 on Mon Aug 25, 2003 at 12:21:56 PM EST

thanks for the tip...i've never tried it at a rental agency...
e.b.a.c
a.a.r.o
s.y.t.r
t._._.e

[ Parent ]
Some do (none / 0) (#202)
by KnightStalker on Fri Aug 22, 2003 at 11:30:24 PM EST

I have used a debit card at Dollar -- they have a fairly scary policy where they debit you $200 or so more than your bill, then credit back the remainder when you return the car. But if you need it, you need it. This is one of the main reasons I have a credit card now... :-)

[ Parent ]
nothing worse than FUD (3.57 / 7) (#120)
by dark ally on Fri Aug 22, 2003 at 12:38:22 PM EST

Utility bills go in as purchases. Anything you charge directly to the card goes as a purchase and has a grace period. Mortgage and rent are probably not chargeable. You will never charge something to the card and find out later that it is a cash transaction. The only way you can do that is if you get cash out of an ATM, use one of the checks they send you, or do a balance transfer.

Bzzz. Sorry, wrong answer. Everyone should read the agreement which comes with their credit card.  Don't have it anymore?  Call your CC company and have them mail you one.  In there will be a long list of items which are considered equivalent to cash advances (thus charged interest from day one), including lottery tickets and casino charges.

And although most CCs have a "grace period", if you don't pay your bill before the date on the bill, you are charged interest <u>from the date of purchase</u>.

Do the merchants pay the 3% loss on purchases from their own pockets? FUD again. Yes, they do. It's illegal for them to charge you extra. Do your reading before mouthing off about stuff you obviously don't understand.

Bzzz. Sorry, wrong again.  Maybe you've never heard of a "cash discount"?  In hyper-competetive and price sensitive computer field advertised prices are often "cash discounted", and guess what you have to pay if you want to use your CC?  That's right: 2-5% extra.  And just 'cause it isn't listed on the bill, doesn't mean that the merchant CC charge (which is what funds loyalty programs) isn't buried in the price (whether you pay cash, debit, charge or check)?


above is reply to FUD by CaptainSuperBoy (none / 0) (#121)
by dark ally on Fri Aug 22, 2003 at 12:40:41 PM EST

Sorry, clicked the wrong link when submitting.  Won't happen again.


[ Parent ]
Cash discount (4.00 / 1) (#132)
by CaptainSuperBoy on Fri Aug 22, 2003 at 01:20:16 PM EST

First of all, casinos do not take credit cards. You have to get a cash advance and then buy in with that money. Host credit is a much better option, anyway.

If you buy lotto tickets, you are an idiot anyway.

Cash discount is prohibited by Visa and MC. You are just plain wrong - there are no reputable online retailers who do this.

You do know what FUD stands for, right? Hint: It doesn't mean "wrong." You say I'm spreading "fear, uncertainty, and doubt" about, um.. cash?

--
jimmysquid.com - I take pictures.
[ Parent ]

cash discount & advances (4.00 / 1) (#142)
by dark ally on Fri Aug 22, 2003 at 01:53:51 PM EST

I can't say that I've ever personally been tempted to purchase lottery tickets on a credit card, nor have I ever been to Vegas or attempted to buy chips at a casino using a credit card.  So you may be right.  However, both of those were listed explicitly in the credit card agreement I recently received.

As for cash discounting, I can assure you that it does exist.  And at least when I was down in Silicon Valley more than a few years ago this was standard practice.  It certainly is with the retailers in my neck of the woods.  I've even occasionally heard of independent gas stations offering discounts for people who pay cash.


[ Parent ]

this happens in CA a lot (none / 0) (#174)
by jeduthun on Fri Aug 22, 2003 at 05:46:40 PM EST

there's a chain of gas stations here called QuikStop ... their advertised prices are for cash. it's always three cents more per gallon if you pay at the pump with credit.

[ Parent ]
Arco (none / 0) (#286)
by Katt on Mon Aug 25, 2003 at 04:06:38 AM EST

Arco gas stations typically don't take credit cards, but there are a few of them around Oregon that will accept credit cards and add on a few extra cents per gallon.

[ Parent ]
I see cash discounts and/or CC surcharges... (none / 0) (#159)
by porkchop_d_clown on Fri Aug 22, 2003 at 03:29:06 PM EST

all the time. Yeah, they're always smaller, independent businesses - which is why I don't mind that they do it. If Visa is going to charge them 2.5% on every credit card purchase, why should they eat that cost?


--
You can't raise my prices. You can't build more power plants. You can't build more power lines. Why are my lights out!?!


[ Parent ]
Cash discounts / CC surcharges (none / 0) (#304)
by lunatic on Mon Aug 25, 2003 at 02:33:50 PM EST

"If Visa is going to charge them 2.5% on every credit card purchase, why should they eat that cost?"

Because they entered an agreement where in exchange for being able to accept Visa, and display Visa's logo, they agree not to upcharge Visa's customers. IOW, they exchanged margin for volume.

[ Parent ]

Casinos. (none / 0) (#193)
by mindstrm on Fri Aug 22, 2003 at 07:57:24 PM EST

1 - Online casinso will most certainly accept credit cards. How they do this is another matter, but they DO.

2 - Lotto tickets - agreed.

3 - Cash discount is prohibited by visa/mc, but I can assure you that 99% of meatspace retailers who accept credit cards WILL give you a cash discount if you ask.   So as sure as you might be that "it never happens", you obviously haven't actually asked. Every store I ever go into gives me a discount for cash, with rare exceptions.  

[ Parent ]

Prohibited by Visa/MC (4.00 / 1) (#194)
by mindstrm on Fri Aug 22, 2003 at 08:00:33 PM EST

You have to remember a couple things
a) visa and mc and amex are in a precarious position.

The reason they dont' want people charging different prices is because it would detract from the image of the credit card as being useful. If everyone thought that the credit card caused things to cost more, nobody would use them, and it would hurt their bottom line immensely.

but

These issuers NEED merchants... and they are not likely to pull the plug on any merchant for offering cash discounts...  that's like saying "Sorry, we don't want all the money we make off you cause you gave someone a cash discount".

This is all not as black and white as you think.

Many people ask for cash discounts and they don't even realize WHY the merchant gives one... that's why the card companies tolerate it.. it still doesn't reflect badly on them.

[ Parent ]

If a merchant... (4.00 / 1) (#224)
by razzmataz on Sat Aug 23, 2003 at 10:29:12 AM EST

... is charging you an extra fee, you can complain to either Mastercard or VISA, because the merchant is violating the merchant agreement they sign.

-- I love the smell of fdisk in the morning...
[ Parent ]
Building Credit History (5.00 / 4) (#149)
by dark ally on Fri Aug 22, 2003 at 02:07:47 PM EST

There is such a thing as too much credit.  A credit report will list all of your credit cards and the credit limit for each (along with any lines of credit and their limits).  When a lender looks at your credit report they total up your available credit, whether or not you have used it.

So what's the problem?  More credit = more risk that you will be unable to pay the lender = higher interest rate (or even refusal).  So, if you have no plans to use a credit card, call up the CC company and cancel it.  And for the credit cards you keep, call those up and have your limit set to what you consider to be a reasonable amount.  (And this should also mean the CC won't automatically increase your limit in the future.)

Maybe - maybe not (4.75 / 4) (#176)
by sphealey on Fri Aug 22, 2003 at 05:50:24 PM EST

So what's the problem? More credit = more risk that you will be unable to pay the lender = higher interest rate (or even refusal). So, if you have no plans to use a credit card, call up the CC company and cancel it.
The US courts have agreed with the credit reporting companies that they can keep the FICO algorithm secret, so we don't know exactly how it works. But the rabid consumer-types who hang out on the consumer-oriented Usenet newsgroups have done a lot of research on simulating the FICO score. Typically what they find is that the two keys factors are (a) longevity of credit lines (b) amount of open, UNUSED credit over a period of time.

If this analysis is correct, closing unused cards could actually make your FICO score worse.

sPh

[ Parent ]

more references? (none / 0) (#203)
by nyet on Fri Aug 22, 2003 at 11:36:37 PM EST

having just gone through equifax and finding 16(!) open credit card accounts, i just closed 4 or 5 of them. I guess i'll find out soon enough what happens ;)

[ Parent ]
One good thing about debit cards (4.33 / 3) (#153)
by Bill Melater on Fri Aug 22, 2003 at 02:47:00 PM EST

If you ever find yourself in a position where a company wants to access your bank account directly, a debit card can actually be useful.

For example, the people that do bug-spraying and termite inspections at my house charge me less if they can debit directly from my checking account every three months instead of waiting for me to approve a check. I don't really trust people with that level of access and my bank tells me that there's no way to block them out, other than by closing the account and reopening with a different number.

But if, instead of giving them my checking account I give them the debit card number that's linked to the checking account, the company can debit against the account and I can then selectively block access to that company if I decide to.



In the UK (5.00 / 3) (#172)
by it certainly is on Fri Aug 22, 2003 at 05:37:09 PM EST

Direct Debit. It's the Standing Order's tame, simple to use, easy (for the payer) to cancel or change.

Do they have it where you come from? Many companies give you a discount for paying by Direct Debit, because it saves them huge amounts of money in billing and collection costs.

It also carries a lot more guarantees to the payer than the payer simply giving the payee some card details and hoping they charge it correctly. You can cancel or suspend any direct debit simply by phoning your bank. You don't need to sign forms in triplicate to cancel it.

kur0shin.org -- it certainly is

Godwin's law [...] is impossible to violate except with an infinitely long thread that doesn't mention nazis.
[ Parent ]

Direct debit (none / 0) (#231)
by kindall on Sat Aug 23, 2003 at 01:26:10 PM EST

Many companies will set up direct debit for you (utilities and banks are almost always happy to do so, except for my local electric company) and many banks offer a bill payment service that, in the event the merchant doesn't do debits themselves, simply cuts a check to them. Bank of America offers it for free -- I use them to pay my electric bill to the aforementioned balky utility (I got on a "leveled" payment plan so my bill would be predictable, then scheduled a recurring payment). Other banks charge a monthly fee for this service, or you can use the US Postal Service's similar service, which is $5.95 a month. (The cool thing about the USPS's service is that they actually scan your bills for you and post them on a Web site, and then you just click to pay them, so it works even with bills that aren't predictable in their amount.) So yes, direct debit does exist in the US, either through the merchant or through your bank. Not all merchants support it so it is good to have a bank that offers a bill payment service. From what you say, it sounds like this is a more universal and standardized thing in the UK than it is here.

[ Parent ]
A Player's Perspective (4.50 / 4) (#179)
by Pluto on Fri Aug 22, 2003 at 05:59:15 PM EST

This article does a great job of dispelling the myths and confusion surrounding the routine use of consumer credit. I'm surprised folks the small stuff so much. I never read the fine print because I figure if it's a bogus deal spread across millions of people, a class action suit will follow and I'll just join the class and collect at the end.

In the meantime, I've always thought of my Visas, MasterCards, and American Express as a venture capital group, dedicated to me. (Four of these kind and generous plastic investors provided the downpayment for a tiny condo in San Francisco. Two more of my plastic mentors further invested the payments for the two months it took to sell it again. At the end, we all walked away better than we found each other, and they all sent rave reviews, about moi, to the credit reporting agencies.)

Since then, I've discovered that your FICO score is the ticket to freedom. It's not how much money you have. Or how much you make. It's how much you can borrow that provides the opportunity to make enough so you can spend your time dicking around.

Embrace debt. The money will show up. Nature abhors a vacuum.

_______________________________________
Burgeoning technologies require outlaw zones... deliberately unsupervised playgrounds for technology itself. -- William Gibson

I don't even have a FICO (4.00 / 1) (#183)
by randyk on Fri Aug 22, 2003 at 06:27:06 PM EST

Or I should say I didn't. Without one, I financed a home purchase in the low six figures and with a pretty good interest rate. I had NO credit. See my other post for how.

After a while of paying the home loan exactly on time (it comes out automatically, so there's nothing to forget), I'd be willing to bet my Fair Isaac score rocks right now. I certainly am getting a lot of credit card offers now with ridiculously low interest rates, grace periods, and fee-free stuff. Tempting, but these get shredded and sent to the fire pit.



[ Parent ]
Smart Move (4.00 / 1) (#185)
by Pluto on Fri Aug 22, 2003 at 06:41:35 PM EST

Randy, I read above how you did that; seized the moment and made the financing happen.

As for credit card offers: Build a big fire pit, dude, you'll need it. They'll be dropping them from helicopters into your back yard.

_______________________________________
Burgeoning technologies require outlaw zones... deliberately unsupervised playgrounds for technology itself. -- William Gibson
[ Parent ]

CC junk mail -- Junkbusters (none / 0) (#329)
by kmself on Sat Aug 30, 2003 at 03:35:53 AM EST

Three years after filling out and sending off marketer removal requests, I still get just a trickle of crud. It's great.

--
Karsten M. Self
SCO -- backgrounder on Caldera/SCO vs IBM
Support the EFF!!
There is no K5 cabal.
[ Parent ]

No myth: credit cards still suck. (3.60 / 5) (#182)
by randyk on Fri Aug 22, 2003 at 06:20:10 PM EST

Debt sucks. Buy now pay later sucks. Finance should be only used for capital goods. Real estate and (maybe) cars and major household durable goods (washer/dryer, fridges, etc.) should be financed. Otherwise, if you don't have the money for it, you can't afford it. Yes, this is all IMO.

But, if you're going to use one, this is the way to do it. Always pay them off in full when you get the bill. If you get in a jam and can't pay them off, pay as much as you can. The minimum payments will eat you alive in interest.

Contrary to popular opinion, you do not have to have "good credit" to buy a house. What you cannot have is "bad credit". Many lenders have alternative financing for home purchases where as long as you can show stable payments on utilities (who typically don't report any credit info unless they go to collection) and similar stuff, you can still get the loan. It's a little more hassle from a paperwork perspective, but I think it's worth it.



Contrary to what you think... (4.50 / 2) (#192)
by mindstrm on Fri Aug 22, 2003 at 07:52:30 PM EST

Buy now pay later sucks if you are using it to pay money you don't have. I, however, use it to pay for things so I have time to figure out if I got ripped off, and so I can later balance out my charges, and so I have a record. I COULD pay cash for everything, but I don't like to, it's not as secure

Contrary to your contrary opinion, lack of bad credit is often NOT sufficient to get a big loan, like for a house... there IS such a thing as good credit, and it DOES help, and it helps a lot. I've seen many people turned down for a loan, not because they had bad credit, but because they had no credit record period.

[ Parent ]

Sure... (4.50 / 2) (#196)
by randyk on Fri Aug 22, 2003 at 08:20:35 PM EST

All you're doing is using a credit card as a de facto debit card, though. And I don't know about different banks, but my bank offers me the same fraud and theft protection on my debit card that the ir credit card offers.

If I had a card that was not debit, it would be an American Express card, which is really a charge card, and not a credit card.

Contrary to your contrary to my opinion (did I do that right? :-), it is frequently sufficient to have no credit to buy a house, as long as you have no "bad credit". I never once said there is no such thing as good credit. I must have good credit now, because I get tons of credit card offers since I bought a house. Is it more difficult? Certainly. It's more paperwork, mostly. Does every bank do it? Of course not. But I've found that banks that don't are generally not the ones I want to work with anyway. When your total financial picture can be boiled down to a single 3 digit number, and above this line you're okay, and below it you're a schlep, there's something wrong with the system.



[ Parent ]
A few points then. (none / 0) (#239)
by mindstrm on Sat Aug 23, 2003 at 02:30:39 PM EST

  • The definition of a "Debit card" varies from place to place. In the US it is usually JUST like a credit card, but it is tied directly to an account.  With a Visa debit card, for instance, a merchant cannot tell if it is debit or credit.
  • In Canada, A Debit card means an Interac card, and it's NOT processed like a credit card at all. Merchants all have special gear for it.  Money is immediately transferred when you use interac.  A "Debit Card" from the US would be called a "Cheque Card" in Canada... they are not very common.
  • In other countries - various other things. In the UK you will see "Check Guarantee cards".. which are basically used like a debit card.. though you also write a cheque on the spot.  Kind of a neat hack. Everything is still processed as a cheque... but the merchant has no risk.
I am not using it as a de-facto debit card, I assure you. Perhaps if it was like yours, it would be the same, I don't know...  I like that 21 day grace period where I can look over my transactions, and not tie up my cash which is busy earning me interest elsewhere directly from my bank account.. and perhaps it's irresponsible, but my lazy lifestyle likes the fact that if I don't pay in time, I only pay a small penalty...

[ Parent ]
Also. (none / 0) (#275)
by DavidTC on Sun Aug 24, 2003 at 02:15:54 PM EST

While it doesn't use a card at all, there's also the neat trick of digitally scanning your check and running it through some computer, which immediately gives them the money, and then giving the check back to you as a receipt, and there's no chance of fraud. (At least, no chance of you defrauding them.)

I've also seen them do this over the phone by having you read the account number off the check. Although I don't like that, it seems like it would be too easy to steal someone's checks...although many places don't ask for ID for checks anymore anyway.

-David T. C.
Yes, my email address is real.
[ Parent ]

Credit card offers (none / 0) (#255)
by dipierro on Sat Aug 23, 2003 at 07:51:26 PM EST

I must have good credit now, because I get tons of credit card offers since I bought a house.

Credit card offers don't mean shit. I know people with horrible credit who constantly get credit card offers. And I've seen quite a few times that someone has applied for credit cards which were "pre-approved" and been declined.



[ Parent ]
Why does debt suck? (none / 0) (#254)
by dipierro on Sat Aug 23, 2003 at 07:47:23 PM EST

Buy now pay later sucks if you are using it to pay money you don't have.

Why? As long as I am going to get the money eventually, why should I wait to get the product when I can get it now?

I don't see the big deal with debt. It's like alcohol. Sure, there are some people who can't handle it, but for most of us who can use it responsibly it's not a problem.



[ Parent ]
Debt can be good (none / 0) (#253)
by dipierro on Sat Aug 23, 2003 at 07:42:13 PM EST

Finance should be only used for capital goods. Real estate and (maybe) cars and major household durable goods (washer/dryer, fridges, etc.) should be financed.

None of those are capital goods. Capital goods are goods which are used in production of other goods.

The minimum payments will eat you alive in interest.

Depends on the interest rate, of course. My credit cards have interest rates lower than most car loans which you claim are "maybe" acceptable.

Contrary to popular opinion, you do not have to have "good credit" to buy a house. What you cannot have is "bad credit".

Hell, you can have bad credit and buy a house, if you don't want a loan, or if you're willing to put down a whole lot, get a really high interest rate, and pay for PMI. If you've never had a loan in your life you're going to get a higher interest rate than if you have excellent credit. That's the way it works.



[ Parent ]
get it straight: debt sucks, credit cards don't (none / 0) (#311)
by dh003i on Mon Aug 25, 2003 at 05:52:54 PM EST

Credit cards do not necessarily mean debt. If you are capable of paying off all credit card debt at this moment, and always pay off your credit-card balance at the end of the month, then you have no problems at all. In fact, a credit card, in that case, helps you for several reasons: (1) Don't need to carry cash; (2) Earn interest on that money for an extra month...not much alone, but over years, it amounts to many many months, which amounts to significant amounts of money; (3) Get various credit-card rewards, like cash-back (see my StockBack message). The problem is when people look at a credit card like a blank check. You should never charge more on your credit card per week than you make per week (after considering taxes, rents, bills, emergency fund, and prudent savings). Of course, credit card companies make their money on the fact that many many people use credit-cards like a blank check, with no restraint. And that's perfectly fine. Credit-card companies offer a valuable service (and it would still be here even if no-one was irresponsible, because banks would compete with eachother), and they are in no manner evil because they make money off of it. I've benefitted quite a bit from using my credit-card. I use it to buy I-Bonds from the US Treasury Department, and get 1% cash-back from that. Over a year, that amounts to quite a bit; also considering all the other things which I buy with it.

Social Security is a pyramid scam.
[ Parent ]

Biggest problem with this article (3.00 / 7) (#184)
by golrien on Fri Aug 22, 2003 at 06:41:26 PM EST

PIN stands for Personal Identification Number, hence "PIN number" is a dumb thing to say :)

UMB Bank (none / 0) (#289)
by Cro Magnon on Mon Aug 25, 2003 at 09:33:31 AM EST

Well, according to their sign, I bank at the United Missouri Bank Bank!
Information wants to be beer.
[ Parent ]
yeah, but that's just how things work (none / 0) (#315)
by Delirium on Tue Aug 26, 2003 at 02:14:24 PM EST

Everyone says ATM machine too. :-P

[ Parent ]
Re: Biggest problem with this article (none / 0) (#320)
by TaranHero on Wed Aug 27, 2003 at 11:46:44 PM EST

Yeah, yeah, Based on NT Technology and all that. People do the "acronym then last word of acronym" thing all the time. (Doesn't make it right though...)

[ Parent ]
Credit Card vs. Debit Cards. (4.83 / 6) (#199)
by Psycho Dave on Fri Aug 22, 2003 at 09:25:06 PM EST

If you are staying at a hotel for a week and give your debit card as the form of payment, the hotel will place a hold on the card for room and tax and also about twenty dollars in incidentals each night (phones, porno movies, honor bar etc.)
Now, officially, the card hasn't been charged yet. Even if you cut your stay short by a few days or don't make and long distance phone calls, the amount that was put on hold stays on hold for a couple of weeks, in which time getting your money out of an ATM will be a bitch.

If you used a credit card for the transaction, the same hold still applies. But seeing as your credit limit is several thousand dollars you don't notice that maybe a grand of you credit is put on hold for a week (unless you're a huge spender).

Basically, hotels, car rentals, airplane tickets, buying things online, I use my credit card. If I'm just buying lunch, espresso, a random DVD, something where the clerk will hand me a receipt and that says, "This is what was charged to your card right now," I'll use a debit card.

Listen here asshole (1.68 / 16) (#205)
by tofubar on Sat Aug 23, 2003 at 12:52:14 AM EST

Stop pretendingyou'reanexpertonsubjectsyournot.fuckinggeek.

my experience... (3.66 / 3) (#206)
by bigbigbison on Sat Aug 23, 2003 at 01:06:22 AM EST

I've had the same credit card nearly ten years, since I was 19.  I got it in college.  I am currently in a phd program.  I've been in an out of college ever since I got the card.  Never had a really good job that paid more than $30,000 a year.  

However, I did pay off my bill nearly every month.  I think I've only carried a balance on the card 3 times since I got it.  Once or twice a year I will buy something for over a thousand dollars.  But I still pay it off the next month.  It never fails, every time I put more than a thousand on the card they raise my limit.  

I worked at a casino for over a year.  Nothing delighted me more than to have a customer's credit card declined for a cash advance and have these people who are nearly twice my age yell at me, "That can't be!  I've got a limit of $15,000 on that card!" and to smile and tell them, "Well, my credit limit is $22,000."

Of course right now I'm a graduate assistant at college and my credit limit is almost twice my yearly salary....

My advice.  pay that bill off every month.  Like the article said, treat it like any other bill.  Heck at current interest rates, if you can get a loan from a bank to pay off the cards do it, the interest is probably signifigantly lower.

So, ummm, essentially... (1.80 / 5) (#207)
by proles on Sat Aug 23, 2003 at 01:44:21 AM EST

You're suggesting that the best way to use a credit card is to pretend it's a debit card?  Well, ummm... why not just get a debit card?

I mean, yes yes, if a debit card is compromised you can be more screwed than if a credit card is compromised, but you're really only screwed if you lose your PIN too and if you've got half a brain you should never lose your PIN.  In fact, you should be able to control it so you never really lose your credit card either.  I mean you should definitely be able to avoid physically losing it, and as for it being stolen online, only buy from reputable places.

That, and it's not like hitting my debit card would be a jackpot.  My checking account has less in it than even the limits on introductory credit cards.

So despite your nice little article, I think I'm going to keep my debit card for the time being.
If there is hope, it lies in the proles.

So, um, essentially read the article (none / 0) (#211)
by skim123 on Sat Aug 23, 2003 at 02:12:23 AM EST

You're suggesting that the best way to use a credit card is to pretend it's a debit card? Well, ummm... why not just get a debit card?

The author gave several reasons why a credit card is advantageous over a debit card. Read the last half of the article for more information.

Money is in some respects like fire; it is a very excellent servant but a terrible master.
PT Barnum


[ Parent ]
Yes, building credit (none / 0) (#213)
by proles on Sat Aug 23, 2003 at 02:16:34 AM EST

But to my understanding there are other ways to build credit.

And as for all the other potential "perks" (rental stuff, etc.) that they try to use to sell cards, I guess none of them are substantial enough (especially considering I'm not a big enough consumer) for me to want to spend credit when I can just spend money I actually have.
If there is hope, it lies in the proles.
[ Parent ]

Were you trying to prove that you read the story? (5.00 / 1) (#214)
by Ta bu shi da yu on Sat Aug 23, 2003 at 02:22:42 AM EST

If you were, then you didn't do a good job!

Here are some other reasons, straight from the article:

  • Fraud and Disputes
  • Security
  • Financial benefits (multiple reasons), and lastly (as you so aptly pointed out)
  • Building a Credit Rating
Yours humbly,
Ta bù shì dà yú

---
AdTIה"the think tank that didn't".
ה
[ Parent ]
Were you trying to prove that you read my comment? (none / 0) (#245)
by proles on Sat Aug 23, 2003 at 05:16:00 PM EST

If so, you didn't do a very good job.

I dealt with fraud and disputes and security in my first comment, noting that my checking account has less money in it than a typical starting credit card limit, and that I tend to be able to avoid losing my credit card/PIN anyway (and only use reputable online dealers, I know it's still not 100% certain but it's pretty safe).

I dealt with the financial benefits and credit rating in my second comment, noting that neither was enough of a benefit for me to want to spend on credit what I could spend on cash.

Yours humbly,
Aaron
If there is hope, it lies in the proles.
[ Parent ]

The "points" are nice (5.00 / 1) (#215)
by skim123 on Sat Aug 23, 2003 at 02:26:40 AM EST

I have a card where I get a point for every dollar charged, and you can turn them in for gift certificates and the like. It averages out to just a bit over 1%. Typically, in a year I don't amass that much, but the year I moved into my first home and needed furniture and the like, the year I got an engagement ring for my fiancee, and this year, paying for the wedding, the points have turned into a few $50 gift certificates for various businesses I frequent. Try to get that with a debit card.

Money is in some respects like fire; it is a very excellent servant but a terrible master.
PT Barnum


[ Parent ]
Yes but (none / 0) (#247)
by proles on Sat Aug 23, 2003 at 05:34:37 PM EST

I'm not a big consumer just yet.  I'm a mere college student, not yet buying furniture for a home or an engagement ring for a fiancee.

I didn't say that I will never ever get a credit card, I merely asserted that it doesn't seem to me like any of the perks are at this point enough of a benefit to me to outweigh the fact that I would rather avoid buying with credit what I can buy with cash.

At some point in my life it may make more sense to get a credit card, but this article seemed to fail to offer any revolutionary arguments in favor of the credit card.  I started it expecting some argument as to why credit cards are worth it, and found, well... admittedly there was some argument, I guess I just wasn't all too impressed by it.
If there is hope, it lies in the proles.
[ Parent ]

Paypal (none / 0) (#252)
by dipierro on Sat Aug 23, 2003 at 07:35:28 PM EST

Try to get that with a debit card.

A 1% cash back debit card? I already have it.



[ Parent ]
Uh read the article (5.00 / 1) (#222)
by Anonymous Hiro on Sat Aug 23, 2003 at 07:38:21 AM EST

With the credit card, in event of fraud - it's NOT YOUR money that's gone.

With the debit card, it's YOUR money.

Maybe that's an insignificant difference to you, but to me, it makes a credit card far far better than a debit card for buying stuff (BTW with some credit cards purchases are automatically insured).

Saying "if a debit card is compromised you can be more screwed than if a credit card is compromised, but you're really only screwed if you lose your PIN too" seems to be missing the point completely. The whole point is to not to be "more screwed".

If you still don't see the difference, then I suppose you're one of those who don't need money or doesn't care very much about it.

While it is commendable for one to not be attached to one's money, I find it preferable that my money remains attached to me.

[ Parent ]

Uh read my comment (none / 0) (#246)
by proles on Sat Aug 23, 2003 at 05:18:31 PM EST

"With the credit card, in event of fraud - it's NOT YOUR money that's gone.

With the debit card, it's YOUR money."

Yes, I know.  I acknowledged that fully.  And as I noted, I'm not a heavy user and have little enough money in my checking account that I'm not too terribly worried about it even if it does get stolen.  I mean, yes, it'd suck, but it wouldn't be unsurmountable.

It's not that I don't need money or don't care much about it: I'm just not a big consumer and would prefer not to subscribe to the consumerist culture and get a credit card.  A debit card meets my needs just fine, and I'm a safe and responsible enough user that I very much doubt it'll ever get stolen.  It's not impossible, I realize, but I'd say it's relatively unlikely.
If there is hope, it lies in the proles.
[ Parent ]

Stockback, a credit card worth considering (3.50 / 2) (#209)
by dh003i on Sat Aug 23, 2003 at 02:08:39 AM EST

Stockback gives 1% back on all purchases, no matter how much you buy. In addition, if you buy from about a hundred stores that have deals with MasterCard, you get an additional 1-11% back. It goes into a Merril Lynch account (either an S&P 500 index or a cash position).

This card is worth considering, but it's not for everyone. It requires a very good credit rating, and the benefits are only provided if you pay off your debt each month completely. It also has disadvantages over-seas, where extra charges are applied.

I do tend to agree that credit-cards are better than debit cards (for one thing, you make interest off of your money for longer). However, ATM-cards are necessary for many, so you shouldn't disconsider them. And always remember that you're dealing with real money. You shouldn't buy more with a credit card on a weekly basis than you make on a weekly basis, for example. You should always be able to completely pay off your credit-card debt immediately; otherwise, you're in serious credit-card debt trouble.

Social Security is a pyramid scam.

You're getting screwed! (3.75 / 4) (#210)
by skim123 on Sat Aug 23, 2003 at 02:10:38 AM EST

credit cards can in fact be entirely free. I certainly don't pay anything at all to my credit card company beyond what I actually charge on the card (plus the cost of a stamp to mail payment for the bill), and there's no reason you should either.

You pay for a stamp? You are getting bilked - pay your bills online, man - simplify!

Money is in some respects like fire; it is a very excellent servant but a terrible master.
PT Barnum


Okay, I just HAD to post this link. . . (2.22 / 9) (#217)
by Fantastic Lad on Sat Aug 23, 2003 at 04:57:29 AM EST

Visa = 666 ??"

The logic here is interesting;

'VI' = 6 in Roman.

'Z', (as the 'S' is pronounced in VISA), is character for '6' in Ancient Egypt.

'A' is the character for '6' in Sanskrit from the same period.

Hence, VISA = 666 as described by one of those Nostrodamus style cave-dreamers way back when the original material eventually collected in the bible was still being written.

Judge the comparison charts for yourself. --This isn't the same lameness as that mark of the beast pamphleteering as distributed by church groups.

Do as you will. I thought it was interesting.

-FL

This just in... Fantastic Lad = 666 (5.00 / 2) (#298)
by Fon2d2 on Mon Aug 25, 2003 at 12:38:42 PM EST

"Fan" starts with the letter F which is the 6th letter of the alphabet.

"tas" starts with the letter T, the 20th letter, after which, there are only 6 more.

and "tic" also starts with the letter T, once again leaving only 6 letters remaining.

And if we understand "Lad" to mean chap or fellow, then clearly "Fantastic Lad" is meant to be understood as "Associate to The Devil".

And there you have it. The evidence could not be more straightforward.

[ Parent ]

Cute. (1.00 / 1) (#333)
by Fantastic Lad on Sun Aug 31, 2003 at 11:34:56 AM EST

But it seems to me that your demonstration is a creative reach, while the VISA thing is rather more direct. --In the three major languages of the time during which the 'prediction' was first brought forth, the numbers 666 are represented by 'VI-S-A'. --Three (then) contemporary numeric symbols without any clever symantic juggling required.

Consider if our current Alpha-numeric symbol for '6', was sitting next to the Chinese symbol for '6', and say, the Arabic symbol for the same. --All sitting in a neat row for anybody to notice who bothered to do so. Not quite the same as the old, "Take Y, subtract X, Look at your neighbor's license plate, spin around three times, and that's what de-bunking is all about," routine.

Credit and debit cards have much more potential to become a very negative system of population control, (they practically are already!), while we Lads Fantastic are simple voice boxes who control nothing, save perhaps the level of irritation we inflict upon unhappy ears.

-FL

[ Parent ]

Hey (none / 0) (#340)
by phlux on Wed Sep 03, 2003 at 01:20:15 PM EST

Hey FL...

Just curious if you received my email....

was talking to montalk - and wanted to get to chat with you some.

Phlux

[ Parent ]

Nope. (none / 0) (#343)
by Fantastic Lad on Thu Sep 04, 2003 at 10:41:01 PM EST

I just checked the old email account attached to Fantastic Lad on K5 and found nothing but junk mail.

I've not really explored the montalk site. I'll go take a look.

Anyway, cheers!

-FL

[ Parent ]

well, yeah (none / 0) (#313)
by Battle Troll on Tue Aug 26, 2003 at 09:47:46 AM EST

Hitler was 666, Stalin was 666, the Jews were 666, Visa is 666, and even 665 clearly alludes to 666.

Face it, we're all 666.
--
Skarphedinn was carrying the axe with which he had killed Thrainn Sigfusson and which he called 'Battle Troll.'
Njal's Saga, ca 1280 AD
[ Parent ]

Another benefit: Overseas shopping. (4.50 / 2) (#218)
by it certainly is on Sat Aug 23, 2003 at 06:20:38 AM EST

This also seems to be one of the most advertised benefits, too. I wonder why the author left it out?

Sure, most UK websites and shops will let me pay with my UK debit card, but will the USA? Germany? Japan? No.

With a credit card, I can make a purchase in any currency, in almost any country -- whether I'm there on holiday or ordering over the internet. I also have all the same financial protections that go with using the credit card (as listed in the article), no matter where merchants are located.

While I would still recommend to anyone that they take plenty of cash with them on holidays for buying all the small things (and thus not look like an American tourist :), a credit card can help if you desire a reasonably expensive thing -- obviously assuming you've done your sums before leaving the country, and know that you can afford to buy said expensive thing rather than go into real debt over it :)

kur0shin.org -- it certainly is

Godwin's law [...] is impossible to violate except with an infinitely long thread that doesn't mention nazis.

Actually... (none / 0) (#219)
by nicklott on Sat Aug 23, 2003 at 06:51:20 AM EST

My UK debit card is visa-linked and can be used anywhere that a visa card could be and in any currency. I can (and have) purchased in many countries both in person and over the internet.

In fact the usefulness of the card is the only reason I continue to have an account with this bank (LloydsTSB). I all other respects they're a waste of time.

[ Parent ]

And one step further ... (none / 0) (#263)
by dangerousdan on Sat Aug 23, 2003 at 09:44:34 PM EST

I maintain banking accounts in Australia and use a visa card drawn on them to get cash from ATM's in my country of temporary residence (Indonesia) While this incurs a cost of $4 every time I withdraw cash, with an $800 withdrawal it is a worthwhile price to pay to ensure that I am removed from the hazards of Indonesian Rp fluctuations and their absolutely inept and corrupt banking system.

This is in advantage to using the credit card directly for larger purchases.

Dan


Give a man a match and he is warm for a day. Set him alight and he is warm for the rest of his life.
[ Parent ]

Overseas (none / 0) (#268)
by tjb on Sun Aug 24, 2003 at 02:38:27 AM EST

For internaional travel, credit cards just rock.

At money changers and even ATMs I've found I get raped on the exchange rate, but my Amex Gold (where usable, natch) and Mastercard (accepted almost everywhere) give me phenomenally good exchange prices without having to time-the-market wrt tot he exchange rate.  

Yeah, its slightly different everyday, but as far as I can tell its the same exchange rate that Yahoo say is the going rate and there doesn't seem to be a commission.  Very unlike cash where you can expect to lose 5-10% switching back and forth.

Tim

[ Parent ]

Yes, why not? (none / 0) (#287)
by olethros on Mon Aug 25, 2003 at 06:50:23 AM EST

Most UK banks as far as I can remember offer Debit cards with VISA/Mastercard numbers. Basically, using these cards, your credit card account is the same as your normal account and you are forced to keep it on  a positive balance. I guess you could do the same on a real credit card account, by telling your bank to restrict your credit to 0 (ZERO) USD/EUR/UKP/whatever.
-- Homepage| Music
I miss my rubber keyboard.
[ Parent ]
Why you should not use credit cards (3.17 / 17) (#225)
by RGRistroph on Sat Aug 23, 2003 at 11:38:08 AM EST

You should not use credit cards because the system hides it's cost from you, as well as spreading it to other people.

Delirium says that "credit cards can in fact be entirely free."  This is only true in the sense that shoplifting gets you free goods.  In fact, someone else pays the cost of what you steal, and even if you are immoral, you have to see that the cost is largely passed through them right back to you anyway.

This is because the cost of the credit card system is not expressed on your reciept or directly in what you pay.  This is acheived by the fact that the credit card companies will refuse to offer a retailer a merchant account if they have a different price for cash or credit, or if they simply add the merchant fee on to the bill.  By keeping their costs out of the open market, credit card companies erode the free market system will simultaneously profiting from it.

You see, credit cards have a cost to operate like anything else -- maintaining the system and dealing with fraud and paying for all that advertising you see.  This cost is reflected in the merchant fee -- a fee ranging from less than one percent to up to 4 percent of the transaction cost.  This could be added on to the receipt like a sales tax, then Delirium wouldn't be lying to you that credit cards can be free.  Instead, that cost is spread across ALL customers of the store, like an overhead cost such as electricity.

This means that a poor customer who only has cash pays for Delirium's use of convenient plastic.  This means that if a certain restaurant has a high rate of disputed charges due to employee number copying, when I eat there I don't see the higher merchant fee and know that I have to be careful (or use cash).  (A merchant with a high rate of disputes, card theft etc will have to pay a higher rate; this is why all the internet merchant accounts offered are so high, while an account where the person is physicaly present to sign the reciept is relatively cheap.)

It is important to note that if ALL of a retailer's sales are through credit cards, the moral problem disappears, because all share the cost equally.  That is why I am willing to use my credit card for internet purchases.  However, the fact that you don't know the fee is still bad; it prevents you from being able to compare the fraud rate at different retailers, and I personally believe that the more information the flows down to the decision makers (the buyers) the more efficient the market will be.

In Australia and some other countries there has been a movement in force merchant fees to be listed on the reciept where customers can act on them.  The proposal is fought vicously by the credit card cartels.  I should also note that it is possible to find stores that offer a "two percent discount for cash" where cash means a check, debit card, or anything other than a credit card; non chain computer stores, especially ones that deal in used stuff, sometimes do this.  I know of about 4 such stores, 2 on the east coast and one in Austin and one in Houston.

Let's summarize why you should avoid using credit cards whenever possible:

1) The same price for credit and cash makes cash using people pay for your system of plastic.  Stand on your own two feet like an American; this is a system of soccer mom welfare.  (Doesn't apply to places where all transactions are credit cards, like internet purchases.)

2) The same price for credit and cash hide information from you.

3) Paying with cash is like increasing your spending by 2.5 percent (average merchant fee) at no cost to yourself.  If consumer spending went up 2.5 percent it would be substantial boost to the economy.

I'd like to apend to this long post a note on "identity theft."  This is misleading term used by credit card companies to describe a fraud committed against them by someone who applies for credit under a false name.  The term seems to imply that the person who legitimately has that name somehow is a victim.  In fact, what has happened is that the credit card companies insecure system of throwing credit at anyone who asks has been pillaged one more time.

There is a reason why there has been a sudden flood of concerned articles on the standard voter mind control channels about "identity theft."  These stories are often acompanied by anecdotes of people's lives ruined by being cut off from the teat of consumer credit.  What is happening is that the credit institutions, long used to passing the costs of their insecure system on to people other than their customers, are preparing to go for a huge government handout.  Rather than spend a relatively small amount of their own money to make the system secure, they prefer to spend a large amount of the tax payers money patching holes by chasing down the con men.

There is no such thing as a victim of identity theft.

Cash handeling also has its overheads (5.00 / 1) (#226)
by CompUComp on Sat Aug 23, 2003 at 12:24:57 PM EST

Stores using cash also have hidden cash only overheads like the risk of being held up and securely bringing cash in and out of the store.

---
Howard Dean 2004
[ Parent ]

And more. (5.00 / 1) (#274)
by DavidTC on Sun Aug 24, 2003 at 02:07:07 PM EST

Don't forget counting.

They have to pay someone to count the cash when you hand it to them, they pay the cashier or someone else to count it at the end of the shift, they pay someone else to sort and count it again before sending it to the bank, and the bank then counts it again and passes that overhead back to the store.

Sometimes they're missing one of those steps, but they always have at least three.

All methods of payment have many hidden costs.

-David T. C.
Yes, my email address is real.
[ Parent ]

And having enough change too. (none / 0) (#294)
by Anonymous Hiro on Mon Aug 25, 2003 at 11:58:27 AM EST

They need to make sure they have enough change.

There are some places that try to short change you - they don't carry small change and hope you don't care. If they try to cheat you of those few cents, I think they deserve to lose 2% when you tell them you are going to use your credit card instead.

[ Parent ]

well, you can always tell them (none / 0) (#323)
by dh003i on Thu Aug 28, 2003 at 12:49:13 PM EST

well, you can always tell them to go fuck themselves and give you a check for your change, or deposit it into your bank account. Not having spare change does not excuse them from giving the customer back his money. If they accept a 20 for something that's $19.99, then they owe you one cent, one way or another. The actual amount of money that they owe you when you split a bill is irrelevant; it's the principle of the matter. Not giving back that one cent is theft, just as much as it would be theft to hold up a bank.

Social Security is a pyramid scam.
[ Parent ]

re: Why you should not use credit cards (5.00 / 2) (#227)
by brass on Sat Aug 23, 2003 at 12:39:38 PM EST

This is because the cost of the credit card system is not expressed on your receipt or directly in what you pay.  This is achieved by the fact that the credit card companies will refuse to offer a retailer a merchant account if they have a different price for cash or credit, or if they simply add the merchant fee on to the bill.  By keeping their costs out of the open market, credit card companies erode the free market system will simultaneously profiting from it.

It is true that the credit card companies force the retailers to treat the cost of the merchant account as overhead. However, I assure you that the cost of the merchant account is far less than the cost of handling the cash. Most retail environments have greater loss to theft than they are paying back to the Credit Card Cabal.

Here's another example. It takes 5 or 6 people to count all the cash that moves through the average American grocery store. That store then has to pay a transport system to take the cash some place more safe. It takes 1 person 20 minutes to reconcile all the transactions for that same store. The paper records are then moved offsite, imaged then destroyed.

I assure you, credit cards make the system more efficent.

[ Parent ]
The costs are seperable, so let them compete (5.00 / 1) (#230)
by RGRistroph on Sat Aug 23, 2003 at 01:09:11 PM EST

If what you say is true, then if credit card companies allowed different credit and cash prices, stores would try to reduce the amount of cash they handled by offering discounts for using the card, right ?  And society would naturally move away from this clumsy, physical token based paper money to the efficient, simple electronic -- right ?

Why should the costs of paper money be subsidized by those who use the low cost plastic ?

If people can see on their reciept the difference in prices, and merchants are free to set prices as they need to in order to make themselves the most money and not the credit card companies the most money, I'm sure that some stores may adopt credit card only policies.

But right now, if you use a credit card, you participating in a system that is consciously designed to limit your power as a consumer.

[ Parent ]

It's not really realistic.... (5.00 / 2) (#235)
by breser on Sat Aug 23, 2003 at 01:59:21 PM EST

You're assuming that the cost of processing a transaction is a fixed and reliably known figure.  This is just not the case not just with credit cards but with any payment system currently in use.

The actual merchant charge varies based on a number of variables, most of which can't possibly be known for sure by the merchant at the time of the charge.

The fees for a debit card and a credit card are not the same.  If you use your debit card as a credit card (i.e. you sign and don't use your PIN) then the merchant will be charged a higher fee.  Unfortunately, there is no good way for the merchant to know what type of card you presented them.  (Though Visa and Mastercard have recently settled a class action suit by merchants against them to change this to some degree, though the fee will still not be exactly the same)

This is also true of other types of cards, that most consumers are not aware of.  Purchasing cards (used by the government) have different fees.  Again there's no good way for the merchant to identify these cards (and in thise case they haven't agreed to change their fees).

Then there are chargeback and retrieval fees which you can't even begin to guess at what they will be.

Further, (as other people have pointed out) every payment system carries its own overhead.  Cash carries the costs of theft and protection from theft.  Checks carry the cost of verifying the validity of the check, processing a check (businesses usually pay money to cash checks), costs of returned checks, collection on those returned checks, etc...

All of these variable fees mean that it is difficult for the merchant to figure out exactly what the cost of your transaction is.  Difficult is probably an understatement, in many cases it is flat out impossible.

If you even try to account for these costs on a per transaction basis then you start spending a lot of money.  By the time you add this up the money you think you'll be saving by avoiding the fees of the credit card companies will be wiped out.

Ultimately, there are many costs of overhead that we don't all use that we all pay for.  If I walk to the store should I get a discount because I haven't used the stores parking lot?  Should I have to pay to use the stores bathroom?  I mean really, this idea of identifying the costs of the overhead and applying it to the individuals who it applies to is really absurd.

[ Parent ]

Absurd (none / 0) (#241)
by marx on Sat Aug 23, 2003 at 03:50:22 PM EST

[Handwaving about the gargantuan task of determining a transaction fee]

By your reasoning, it's too much work to determine exactly which items are in a grocery basket, and the only reasonable solution is to charge all customers a flat fee, regardless of which and how many groceries they buy.

A merchant knows exactly what fees he has to pay to the credit card companies. Since all cards have a magnetic strip, I don't see why there would be a problem in identifying the card electronically. This is not the stone age, we have computers now to perform exactly these types of tasks.

Join me in the War on Torture: help eradicate torture from the world by holding torturers accountable.
[ Parent ]

It may seem absurd but it's the truth. (none / 0) (#316)
by breser on Wed Aug 27, 2003 at 01:34:11 AM EST

You'd think that but the cards are designed to be indistinguishable to the merchant.  They are built that way so that merchants won't get confused about what they can and can not accept.  In fact until recently it was a violation of Visa/Mastercard regulations to accept credit cards but not accept debit cards (and the only reason that changed was some high profile merchants, e.g. Wal*Mart, sued).  If you took one you had to take the other.

[ Parent ]
Odd. (none / 0) (#248)
by it certainly is on Sat Aug 23, 2003 at 06:14:27 PM EST

But right now, if you use a credit card, you participating in a system that is consciously designed to limit your power as a consumer.

Yes. If I buy from a crooked vendor and he doesn't ship me the goods, I can instantly dispute that payment thus not having to pay it. If I'm in the right, I never have to pay it, thus I haven't lost any money. Like insurance, the CC company deals with this by hiking up merchant rates, which in turn gets me a pay rise as part of keeping in line with inflation (because everything now costs more). If I paid cash, well, even after a criminal prosecution I might not see any of my money returned.

Regardless of your discussion of hidden costs, you must admit that "designed to limit your power as a consumer" is disingenuous.

kur0shin.org -- it certainly is

Godwin's law [...] is impossible to violate except with an infinitely long thread that doesn't mention nazis.
[ Parent ]

The competition's already over (none / 0) (#285)
by xigxag on Mon Aug 25, 2003 at 03:18:37 AM EST

If what you say is true [that credit handling costs are cheaper,] stores would try to reduce the amount of cash they handled by offering discounts for using the card, right ?

A lot of stores do, at least here in the US.  If you go to, say, Best Buy, you can typically buy an item with their branded credit card for 18 to 24 month interest free financing.  Which, based on the GDP deflator alone is approximately  5% to 10% discount.  

Furthermore, if you want to play "free market capitalist," then you have to accept that merchants are free to decide to only sponsor credit card companies that allow them to take a cash discount.  Credit card companies are free to allow this if they want.  The fact that both sides have agreed not to do this is simply a contract they have freely entered into for their mutual benefit.  According to your garden-internet-variety self-styled libertarian free marketeers, a freely negotiated contract is mutually beneficial by definition, correct.  

But one doesn't have to look far for additional reasons why all sides benefit from not allowing cash discounts.  Imagine if a merchant took two cards, one which allowed the merchant to give a cash discount, and one which didn't.  The people who carried the first card would effectively pay a premium to use their card.  Whenever they came into the store, they'd notice they were paying a higher price than other customers, including other credit card customers.  This would make them reluctant to use their card.  The store would then get less business as a result, particularly on big ticket items.  Eventually, the "cash discount okay" card would get fall out of use in that store.  Even if the store initially only allowed "cash discount okay" credit cards, normal cc users would feel slighted and would look for stores which advertise "we don't charge a premium for accepting your card."  Those stores would wind up with more business than the other stores and force them to change their policies or be run out of business.  

In fact, this has already effectively happened.  At one time in the US, many large department stores used to only take their own private in-house credit cards, for which of course they paid no additional merchant fees since they owned the card.  But almost all of those old stores have had to start accepting the standard "merchant must swallow the fee" major credit cards in order to stay in business.  People would generally rather use their MC/Visa/Amex cards even if the Sears brand card gives them a 5% discount.  

What about those people who pay cash only for everything?  Well, they can always go to a "cash only for everything" store and reap the maximum benefit.  Except, oddly enough, there aren't too many of those stores around these days.  Wonder why?  

The "no-cash-discounts-allowed" cards have competed on a level playing field and won.  By setting standard, across the board rules codifying this, CC companies are not only acting within their rights under contract law, they are also making a level playing field for all merchants and reducing consumer confusion.  This is a case where their own selfish interests dovetail nicely with the interests of all other parties.

[ Parent ]

i'm confused (none / 0) (#319)
by dboyles on Wed Aug 27, 2003 at 07:42:20 PM EST

Why should the costs of paper money be subsidized by those who use the low cost plastic ?

Didn't you initially argue that the costs of credit cards shouldn't be subsidized by those who pay with cash?

But right now, if you use a credit card, you participating in a system that is consciously designed to limit your power as a consumer.

Relative to cash, how does using a credit card limit your power as a consumer?  Not only do you have better protection against loss, you are actually paying less for the product (considering the time value of money).

Going back to your initial post that discusses the free market, what about the general economic market in retail America isn't open?  Retailers have a choice to accept credit cards or not, and consumers have a choice to pay with the method of their choosing (or go somewhere else if the retailer won't accomodate).

--
"Complacency is a far more dangerous attitude than outrage." -Naomi Littlebear
[ Parent ]

It depends (none / 0) (#243)
by blakdogg on Sat Aug 23, 2003 at 05:03:48 PM EST

Most retail operations are smaller than you suggest. A restaurant/store that serves 10-15 customers per hour, is probably closer to the average. And they would have lower costs due to cash. For larger entities this may no longer be true. But since the cash infrastructure cannot be removed, these savings are for a large part theoretical.
Woe be onto the United Nations, there nothing but a front.
[ Parent ]
IHBT, but... (4.00 / 1) (#251)
by dipierro on Sat Aug 23, 2003 at 07:30:48 PM EST

You should not use credit cards because the system hides it's cost from you, as well as spreading it to other people.

Kind of like K5.

The same price for credit and cash makes cash using people pay for your system of plastic.

That sounds like a reason to use credit cards instead of cash, not the other way around.

The same price for credit and cash hide information from you.

Yes, and the information is hidden either way. That's not an argument one way or another.

Paying with cash is like increasing your spending by 2.5 percent (average merchant fee) at no cost to yourself.

No, paying with credit cards is increasing my spending by 1 percent, at no cost to myself, since I get 1 percent cash back on every purchase. Yes, this is at the expense of the merchant, kind of like a coupon (you don't consider those shoplifting too do you?)

There is no such thing as a victim of identity theft.

You're dead right on that one.



[ Parent ]
Stealing? (5.00 / 1) (#262)
by Valdrax on Sat Aug 23, 2003 at 09:22:17 PM EST

This is such a ludicrous argument, that I'm going to have to call "Troll" on the parent post.  Is it stealing when I take longer than other people in the check-out line because of the hourly wage of the check-out cashier?  Is it stealing when I don't use a check because of the merchant account costs of doing check processing?  Is it stealing when I buy something on sale instead of other items in the store which aren't on sale?  Is it stealing when I get my free refill because the cost of drinks is spread over many customers who don't get as many refills?

It's ridiculous to argue that because I take advantage of a service that not all customers take advantage of and that because this service costs the vendor money that I'm "stealing" from the vendor or other customers.  You might as well argue that buying a shake at McDonalds is stealing because they don't keep a separate budget for shake machine sales vs. shake machine expenses.  Oh no!  The costs are spread out to other customers too!  I must be stealing from them!  When I buy an XBox, I must be stealing from all those poor Windows and Office users who are subsidizing the XBox division!

Then again, I readily admit that I Have Been Trolled.

[ Parent ]

Why you should not use checks or cash, either (4.00 / 2) (#264)
by tgibbs on Sat Aug 23, 2003 at 11:45:02 PM EST

The same price for credit and cash makes cash using people pay for your system of plastic.
Of course, there is also a cost to using checks, because some checks are going to be bad, imposing additional costs on the merchant, who will have to make up those costs by raising prices for everybody, including cash-paying customers. So checks are also unfair to people paying with cash.

But wait! Customers paying with cash impose costs, too, because they increase the attractiveness of a store to robbers, and increase the losses if a robbery occurs. Not to mention the risk to clerks and other customers. At least if you pay for checks or credit cards, you aren't likely to be partially responsible for getting somebody murdered.

Gee, I guess that you shouldn't shop at all for fear of being unfair to somebody.

Or you can believe in the free market, and suppose that the merchant only choses to take a particular form of payment because its benefits outweigh its costs to him (well, except for cash, which he is required to take even if the benefits don't offset the risk), probably by bringing in increased business. And the increased business lets him buy merchandise at more favorable terms and offsets his fixed costs, so that he can offer more attractive prices for everybody.

[ Parent ]

barter (none / 0) (#272)
by F a l c o n on Sun Aug 24, 2003 at 08:44:25 AM EST

In many places, you can also barter with the merchant (if you're talking to a merchant - this doesn't apply to the cashier at the supermarket who knows nothing about the accounting details).

If the merchant pays 2% on all credit card transactions, and you pay cash, then you should be entitled to a 2% discount. You can at least give it a try.

Obviously, it's not worth for that $15 CD. But if you're buying a new computer for $2k, that's 40 bucks saved.

--
Back in Beta (too many new features added): BattleMaster
[ Parent ]

That's why you should use plastic. (5.00 / 1) (#297)
by Fon2d2 on Mon Aug 25, 2003 at 12:23:39 PM EST

What you have just presented is a prisoner's dilemma of sorts. Everybody would benefit if only everybody used cash, but they don't so the credit card users reap a small reward off of those that pay with cash. In this system the optimal strategy for any one person would be to also use credit cards.

But it doesn't really work like this anyway. Any kind of monetary system will have its overhead costs. Cash has certainly got to be a big hassle to any kind of large retailer. They have to make sure they have correct change to last throughout the day. They have to spend hours counting it every night. They need to keep excess cash secured in a safe. And they need to transport it to and from the bank on a regular basis. Then there's also the cost of printing and distribution of money by the government, which ultimately comes down to the taxpayers.

Checks don't help you out either because checks have the highest probability of fraud. So either a retailer has to shell out for a check authorization system (not all of whom can afford it), has to write off bounced checks, or has to simply not accept checks (which is becoming increasinly common). Also checks have the overhead of the financial instutions which have to clear those checks, which probably translates down into lower rates on savings accounts or something like that.

But as for using plastic, there's one thing I tell people not to use it for, and that's the tip on a bill, because that 1 to 4 percent doesn't exclude the tip.

[ Parent ]

This gets a 5 (none / 0) (#306)
by Golden Hawk on Mon Aug 25, 2003 at 04:42:23 PM EST

Now I feel ashamed for every 5 I've ever given a post on kuro.  None of them compare.  This post was thourough, concise, and extreamly informitive.

Perhaps this issue deserves the entry of a rebuttle article written by RGRistroph?  Complete with quotes and news sources?
-- Daniel Benoy
[ Parent ]

This idiocy doesn't justify a rebutal (none / 0) (#317)
by RGRistroph on Wed Aug 27, 2003 at 02:52:48 PM EST

Read the article. It's just a distillation of the junk mail credit offers that clutter up our mailboxes. It's unquestioning belief in TV 30 sec spots. It simply never brings up the structure of the industry at all; it has a kind of childlike, naive view centered on the immediate consumer aspects.

Look at the responses, particularly the patronizing defenses of the price fixing. I suppose these people think it's all just capitalism at work producing a more efficient market, when you have to pay for windows OS even when you buy a computer with an empty hard drive ? The Microsoft case did for anti-trust what the OJ trial did for rules of evidence -- the general public now understands that the first thing a corporation does when they have the power is eliminate free capitalism for everyone else.

Except that didn't sink in on k5.

If you look at my posting history, you'll see I only occasionally drop by k5. I'd always thought of this place as a little out of touch, in the coffee shop hemp sandal wearing vegetarian sense, and I pretty much left around the time Rusty started deleting posts he didn't like. But it's the last place I would have expected to find people applauding a fucking credit card commercial on the front page !

Here are some links for any non-idiots left here:

Boston Globe article about gov-mandated cost spreading

In contrast, the preservation of a free market in Australia

[ Parent ]

except, ding dong (none / 0) (#318)
by dh003i on Wed Aug 27, 2003 at 03:15:16 PM EST

The "microsoft monopoly", if you can even call it that, was created by the government's policies. Specifically, copyrights and patents.

The idea that credit-cards can price-fix (basically a cartel) is absurd. There is a natural incentive to break the agreement and reel in more sales, after which point the entire thing falls apart.

Many credit-card companies may very well have unagreeable policies. That's why this free market stuff is great. You can choose to leave such crappy companies and go to better ones. Or you can choose which company best suits you. Some people will want low APR and low rates, others will want cash-back cards, and others will want reward cards. It's called freedom of choice.

Social Security is a pyramid scam.
[ Parent ]

Fees are liquid... (none / 0) (#322)
by spstanley on Thu Aug 28, 2003 at 12:43:36 PM EST

Actually, there are many factors that go into a transaction fee, many of which cannot be known at the time of purchase.  This is because credit cards are handled in a "store and forward" manner where the bank receives all the transactions for a location once per day, and fees for such things as manual entry without card ID are assessed at that time.

I'm not saying the system isn't evil.  But it didn't start out that way, exactly.

There used to be a day where you were charged the fee for your transaction at the time of purchase.  But Amex had a higher fee, and others changed their fees, and the fee structure got more and more complicated based on individual merchant contracts.

So now we have a system where the mean fee is built into merchant prices.  This is not driven so much by greed as it is by a desire to make it easier at the cash register.  The price charged for any given item is based in part on the mean fee the merchant has paid on all previous transactions at the location.

[ Parent ]

Credit cards always put you in debt (2.14 / 7) (#259)
by dipierro on Sat Aug 23, 2003 at 08:43:41 PM EST

In short, a credit card does not have to be expensive, or put you in debt, or any of the other normally negative connotations associated with it.

Actually, using a credit card necessarily puts you in debt. That debt may only last less than a month, and it might be interest free, but it's still a debt.

Kind of makes the whole "pay it off every month because debt is evil" theory kind of stupid, now doesn't it?



Obligation to pay != accumulating interest (none / 0) (#288)
by Nostalgia Aint What It Used To Be on Mon Aug 25, 2003 at 09:26:39 AM EST

"Debt is Evil" is a misnomer for the actual philosophy that most financially intelligent people apply.

The sound bite should be "Interest is Evil", but that's not as catchy.  Debt isn't a problem in and of itself, to most people -- heck, you "incur debt" every month by having a telephone, or net access, or any other postpaid service.

The grace period is the key here.
--
sigs are extraneous.
[ Parent ]

Interest isn't evil (none / 0) (#310)
by dipierro on Mon Aug 25, 2003 at 05:52:29 PM EST

"Debt is Evil" is a misnomer for the actual philosophy that most financially intelligent people apply.

Of course. For instance, I, as a finacially intelligent person, go by the motto that "Debt is Good."

The sound bite should be "Interest is Evil", but that's not as catchy.

It wouldn't be true, either. Sometimes interest is fine. Other times it isn't.



[ Parent ]
Alright then - (none / 0) (#299)
by GhostfacedFiddlah on Mon Aug 25, 2003 at 01:47:38 PM EST

You come up with a better word to describe "debt for less than a month, interest-free".  I'd say he chose the best word to get his point across without resorting to nitpicky 8-word phrases.

[ Parent ]
what word? (none / 0) (#309)
by dipierro on Mon Aug 25, 2003 at 05:48:04 PM EST

You come up with a better word to describe "debt for less than a month, interest-free".

Better word than what? I'm not sure a single word accurately describes that.



[ Parent ]
make money with your credit card (4.66 / 3) (#261)
by massivefubar on Sat Aug 23, 2003 at 09:16:37 PM EST

I wish everyone understood the facts you explain so nicely. Until the end of the year, you can make money with your credit card when you buy your savings bond right here

Use a Discover card that gives you cash back. The feds will put your savings bond purchase through as merchandise to allow you to get your cash back from Discover. The program closes at the end of the year. But if you are planning to buy savings bonds anyway, get some extra kickbacks from Discover while you're at it! You can buy up to $30,000 worth of savings bonds this year and get the cash back bonus.

they're discontinuing that? (none / 0) (#284)
by Delirium on Sun Aug 24, 2003 at 10:08:25 PM EST

It doesn't say anything on the site about the program being discontinued at the end of the year. Where'd you see that?

[ Parent ]
Sadly, yes (none / 0) (#307)
by nine4mortal on Mon Aug 25, 2003 at 05:23:31 PM EST

A bit of the way down the page: "Online savings bond sales through Savings Bonds Direct will end December 30, 2003, at 3:00 pm EST."

You can still get them online through TreasuryDirect, but you will have to use direct debit from your bank account: no more 1% cash back plus money market interest while you roll the bonds over from one 0% intro-rate credit card to another. (I did this with about $5000 for a year. It was more trouble then it was worth, but it was fun to prove I could do it.)


"Nine for Mortal Men doomed to die..."
[ Parent ]

Rewards (none / 0) (#269)
by SleepDirt on Sun Aug 24, 2003 at 04:22:09 AM EST

I am currently trying to find a new card that offers some rewards. My current bank offers a great interest rate but I pay off my balance on a monthly basis so it's not very important to me.

Which card/bank offers the best rewards program?

"In a closed society where everybody's guilty, the only crime is getting caught. In a world of thieves, the only final sin is stupidity." - Hunter S. Thompson

Amex (none / 0) (#280)
by tjb on Sun Aug 24, 2003 at 02:56:55 PM EST

The Amex rewards are pretty good and extremely varied.  Shopping, travel, hotels, golf - lots of stuff, with double points on supermarkets and gas, and insane (like 5x or 10x) multiples at a few selected merchants.

Of course there is the issue of the yearly fee ($130/year on my Gold card).  My normal spending patterns wouldn't justify that, but when I toss in 3-5 business trips per year (mostly international, and mostly on short notice, and mostly to very expensive places like Tokyo or London), booking the plane tickets and hotels on my Amex card can generate enough points to justify the fee (considering I get paid back my company).  

In other words - if you can put, say, $15-20K on the card every year, its probably worth it.  If you spend less, the green card (I think its around $50/year) is probably better, but you'd still need to spend around $5-$7K minimum to make it worth it.  If you have a serious spending habit or do *a lot* of international travel, get the platinum card.  

But if your spending doesn't hit $5K/year, you're probably better off looking for a card with no yearly fee.  

Tim

[ Parent ]

Discover Platinum (none / 0) (#300)
by webmaestro on Mon Aug 25, 2003 at 02:04:51 PM EST

The only reward I care about is cash back. They pay you .5% on the first $1000 in a year and 1% for everything over that. You can also get double your reward back by getting rewards from some of their partners"
--
Check out Worldofun.com. It's a world of fun.
[ Parent ]
amazon credit card (none / 0) (#314)
by asad on Tue Aug 26, 2003 at 12:50:12 PM EST

for every 2500$ on the card you get a 40$ gift certificate at amazon.

[ Parent ]
Automatic Minimum Payment (none / 0) (#270)
by ocrow on Sun Aug 24, 2003 at 05:37:15 AM EST

I have a question about card payment ... I currently have a credit card that's linked to my bank account so that each month if I forget to pay the card (which I occasionally do), the bank automatically pays the minimum charge. I still get stuck with the 'finance charges' but at least I don't get hassled with fees and being reported for late payment. I'm switching my bank account to a different bank that doesn't issue it's own credit card, so it seems like they won't offer this automatic minimum payment service. I mean I can set up an automatic payment, but the minimum amount changes from month to month, and the bank won't know what's on my current credit card statement each month, because they're not the card issuer. How does anyone else solve this problem (apart from not forgetting to pay)?

Don't forget to pay. (none / 0) (#277)
by elladan on Sun Aug 24, 2003 at 02:39:02 PM EST

It's very irresponsible. They send you a bill, pay it when it arrives. Generally speaking, you get bad credit for forgetting to pay your bills. Solution: Pay your bills.

[ Parent ]
Well you can pay more than you owe. (5.00 / 1) (#293)
by Anonymous Hiro on Mon Aug 25, 2003 at 11:48:06 AM EST

Then stop paying till it drops to a certain threshold.

That's also one way to make sure you don't hit the credit limit if you are going an extended trip. Say your limit is some low value e.g. 3000. Pay the card people MORE than you owe them. e.g. 5000. Then if you go on an overseas trip for a month or so, you don't have to bother about minimum payments etc. AND you can actually spend nearly 8000 before you start hitting your credit limit. So if you need to, you have the money, plus it's MUCH safer than carrying 5000 cash with you.

I believe you can still dispute any unauthorized charges even if they owe you instead of the other way round.

Of course you should check with your card issuer to see if they support this, but they should.

Disadvantage is you don't get any interest, so if you end up not spending that money, it's sitting there not earning you anything.

[ Parent ]

Re: Well you can pay more than you owe. (none / 0) (#341)
by Azethoth on Wed Sep 03, 2003 at 09:31:28 PM EST

Carefull with this advice as it may not work with all cards. I once sank $10k into a $5k limit card and went on vacation with obviously a positive balance in the card of $10k. All transactions were declined by Bank of America because I "had exceeded my limit". This was not resolvable by phone (4 hours of vacation wasted), they wanted to see me in a branch. So I was reduced to my cash & travelers cheques for the duration of the 3 week holiday which sucked. Preposterous but true.

[ Parent ]
Go online... (5.00 / 1) (#327)
by sbalea on Fri Aug 29, 2003 at 10:40:40 AM EST

Pretty much every credit card issuer nowadays gives you the option to pay online. You enter your account information and they will be able to withdraw the amount you specify directly from your bank account. For most of them you can set up automatic payments, pretty much the same thing you have now. The difference is that the CC company initiates the transaction and they will know what your minimum payment is.

[ Parent ]
How Credit Card Companies Screw The Consumer... (4.75 / 4) (#292)
by Yaroslav The Wise on Mon Aug 25, 2003 at 11:38:27 AM EST

I have not read the multiple posts and subsequent replies to this article, so excuse any obvious duplication of info.

The credit card companies will try to screw you at every turn. Some of the particulary nasty things they do are all right there in the fine print. They charge you what is called "Average Daily Balance". Let me give you an example. Let's say you carried a $10 balance on your card. On the first day of your new billing cycle, you bought a $2000 computer knowing full well that you have this money in your checking account and are going to pay it off in full. The bill comes a month later and you promptly write a check for 2K. But wait! You still had that $10 balance. You know what? The CC company will charge you interest for the $2010 using the Average Daily Balance Model and you end up paying interest on the larger amount. Now, the smart economist would pay the $10 and be done with it, but my example is a simple one. Sometimes things can be more complex and you can simply overlook the small things, especially if you have multiple cards. Another thing they do is set up the really low interest rate and then if you should be so unfortunate as to be late on a single payment, BANG, your rate shoots up to 25.99%. This is borderline usury! Other things to be wary of are the "balance transfer fees" for rolling debt over to other cards. That fee is usually in the amount of a percentage of the amount rolled over and many times effectively kills any savings you might have gained from rolling over to a lower rate card. Finally, when you use the card alot or sometimes not so much, the CC companies will pull your credit and look to give you a higher limit. You did not ask for this but they do it anyway. Note that this shows up as an inquiry on your credit file and your FICO score takes a small hit. Imagine if you have 15 cards and each one of them is pulling your credit on a regular basis. Personally, I think that FICO scores are worthless and do not realy reflect a person's creditworthiness. However, creditors literally size you up by that number. If you want to play in this capitalist country you have to come to the game with a high score or you are literally paying more for everything you finance over the course of your life.

In my younger days, I did the big credit dance and shot myself in the foot. This was especially true in college where it was easy to mortgage the future and not think twice about it. Having been screwed over in the past by my own poor planning and ignorance, I have forced myself to become what is known in the Credit Card Company circle as a "deadbeat". A deadbeat is one who uses the card regularly but consistently pays of the amount IN FULL every single month. It takes discipline but is certanly doable and reflects exactly what Delerium recommends. I also try to take advantage of any incentive or cash-back programs while never giving them a dime in interest. CC companies hate deadbeats because we take away the power that they hold over our economic lives. You know what I mean if you have ever gone into any kind of collection with even the smallest lender.

FICO and credit checks... (none / 0) (#305)
by Ether on Mon Aug 25, 2003 at 03:12:24 PM EST

FWIW, this type of activity (credit checks not initiated by you), is tagged on your credit check history as 'PRM-' (or similar) and not used in your FICO score. However, having a larger credit limit  may help or hurt you, depending on your situation. While it is good to have unused credit for an extended period of time, it may be bad to have 'too
much" credit.

-Ether

[ Parent ]

Not quite 100% true.. (none / 0) (#312)
by Yaroslav The Wise on Mon Aug 25, 2003 at 07:08:21 PM EST

If a credit card company that you don't currently have an account with pulls your credit to make you an offer to be a customer, then what you say is true in that it does not ding your FICO. However, if a company with whom you already have a card wants to do you a "favor" and verify your creditworthiness to increase your credit limit, those do count.

[ Parent ]
Incorrect (none / 0) (#326)
by sbalea on Fri Aug 29, 2003 at 09:59:22 AM EST

As a matter of fact, that is not true. The type of inquiry you mention is noted as AR (Account Review) or something and it doesn't count. If you pull an Equifax report you'll see all sorts of inquiries with explanation for each abbreviation.
As a general rule, only transaction initiated by YOU count against your credit score. That means that if YOU ask them to increase your credit limit, then it will count, but if they do it automatically, your score won't be affected (to be 100% correct it might even increase, since the balance/limit ratio will decrease and that comprises about 30% of the score)...

[ Parent ]
Utter nonsense. Credit cards fucking suck! (2.33 / 3) (#321)
by deadplant on Thu Aug 28, 2003 at 11:46:01 AM EST

How can you suggest with a straight face that credit cards are secure?
You seem to have confused "well insured" with secure.  With credit cards the safety of your money is Insured, not Assured.

Debit cards have at least a security code that's required to make a transaction.  Credit cards need nothing at all.  Literally every single merchant you have ever bought anything from using a credit card has complete access to your credit line.

In comparing the costs you seem to have forgotten that the retailer has to pay between a 1.5 and 4.5 percent surchage on every credit card transaction.  It's that money that pays for the MASSIVE fraud that takes place on credit cards every year.
The banks keep their credit card fraud rate a secret but you can be sure it's in the billions/year.

Debit card transaction costs are in the order of 10-20 cents.  Credit card transactions scale with the cost of the product.  If you buy a $500 TV on your credit card you have paid between $7.50 and $15 for that transaction!  it may not show up on your bill but it's there, buried the purchase price.

Don't be a fool!  and stop pushing up the prices I pay for stuff, you're as bad as shoplifters!

Your statements are completely retarded (5.00 / 1) (#325)
by iCEBaLM on Thu Aug 28, 2003 at 11:16:54 PM EST

Great troll by the way.

If I pay $500 for a TV with cash or $500 for a TV on debit, or $500 for a TV on credit, I'm still paying $500 for a TV. The price is the same no matter how I pay for it. Sure, the merchant may have to pay a bit to accept a credit card but that's their cost of doing business if they want mine.

Don't be a fool! and stop pushing up the prices I pay for stuff, you're as bad as shoplifters!

Great line, completely false and utter nonsense but it's a nice troll nonetheless.

-- iCEBaLM

[ Parent ]

Actually, we all pay a higher price, including you (none / 0) (#331)
by RGRistroph on Sat Aug 30, 2003 at 12:26:22 PM EST

You may pay $500 with either method of payment at that point in time, but when you come back to buy anything else the price is higher because the merchant had to pay that fee. It's like leaving the light on in a bathroom of a business you frequent. You are going to pay for that electricity.

There is the issue I raised in a separate post, that I and others who also use the store but pay with cash also pay for that fee.

Which is all right, if that was simply the decision of the store owner, who decided for simplicity's sake (or any other reason) to put the fee in overhead instead of on the reciept.

However, it isn't the store's decision, it's a system imposed by the credit card companies. Many people would say that makes no difference, as long as the companies involved make a free decision to do it that way who cares ? This is the corportist attitude towards big business.

However, often the combined power of the credit card companies is not enough to keep the absurd system in place. Do you believe that it should be state law that a store cannot charge separately for the merchant fees ?

When I lived in Massachusetts I always bought my computer stuff at PC's for Everyone, because if I paid cash they gave me a %2 discount. By "cash" they also meant a check, anything except a credit card. I suppose they must no longer have that policy because of the law.



[ Parent ]

buddy, you need an economics lesson (none / 0) (#336)
by deadplant on Mon Sep 01, 2003 at 06:23:07 PM EST

actually, not even economics, just some basic math.
If there's a $10 transaction cost on that $500 TV it's not going to come out of the retailers profit. It's going to be factored in with the the price he paid for the TV, the price he paid for the shipping and storage and the salary of the kid behind the counter.

If there were no credit cards allowed at that store you can be sure that the price of that TV would be $490.

Sure, the merchant may have to pay a bit to accept a credit card but that's their cost of doing business if they want mine.

... 1 + 1 = 2 ... if you raise the merchant's cost of doing business you raise the prices he charges you. how hard is that to understand?


hey Sumer, what were you thinking rating that comment at 5?

[ Parent ]

Debit cards don't require codes (none / 0) (#334)
by ewindisch on Sun Aug 31, 2003 at 12:01:22 PM EST

My debit cards can be used just like credit cards without any codes. The only difference is that I don't get a better credit rating through use of my debit card.

[ Parent ]
Your Most Important Piece of Plastic (5.00 / 1) (#332)
by Pluto on Sat Aug 30, 2003 at 07:04:49 PM EST

As I learned recently, you'll always want to keep a credit card in your wallet -- one that you cleverly use regularly with an eye toward increasing the limit.

It's just about the only way you can bail yourself out of jail in a hurry. Quietly.

Never leave home without one.

_______________________________________
Burgeoning technologies require outlaw zones... deliberately unsupervised playgrounds for technology itself. -- William Gibson

Why you want a credit card and why it might cost. (none / 0) (#335)
by ewindisch on Sun Aug 31, 2003 at 12:15:22 PM EST

For those here who are from Europe, you are probably wondering why one would want a credit card instead of a debit card. Those in (some parts of?) Europe will not necessarily need a credit card as much as an American. America has a system based around credit. If you want to rent a car, buy a house, take a business loan, or even qualify for some apartments, you need good credit. When renting a card, if you only have a debit card, one must pay a $500 refundable deposit with most/all rental companies; you cannot under any circumstances use cash or cheque. If one is self-employed, their credit rating drops through the floor and things become much harder. I am self-employed and my 'ok' credit instantly became 'high risk'. I had trouble getting a good rate on a car loan, through good shopping and hassling, I managed to get an 'ok' loan; however, it was a real wake-up call to how important good credit is. If you DO get good credit card offers with no yearly/annual fees, go for it. Because I'm self-employed and didn't get a credit card when I was younger and had W-2 employment, I ended up having to pay $100 for a credit card + $100 annual fee. I'm happy though, because now I can build a credit history and I'll save a lot more money than $200 by having this card and having the ability to get low interest rates on future loans. I plan to buy a house next year, but I won't be able to if I cannot build a sufficient credit history.

Dispelling Some Myths About Credit Cards | 343 comments (329 topical, 14 editorial, 0 hidden)
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