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Old 01-04-2010, 08:28 PM   #41
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We have an average of about 1200 per month. We charge everything above 10 bucks usually. Since we pay it off each month, no issue.
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Old 01-05-2010, 06:47 AM   #42
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Visa Reigns with Silent Tax

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When you sign a debit card receipt at a large retailer, the store pays your bank an average of 75 cents for every $100 spent, more than twice as much as when you punch in a four-digit code.
Credit Cards fees are even higher. (Guess who ultimately pays this "tax.")

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“What we witnessed was truly a perverse form of competition,” said Ronald Congemi, the former chief executive of Star Systems, one of the regional PIN-based networks that has struggled to compete with Visa. “They competed on the basis of raising prices. What other industry do you know that gets away with that?”
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Old 01-05-2010, 08:06 AM   #43
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I guess if I'm going to hi-jack a thread, I might as well go whole hog:

The Cognitively Weak, Financial Services, and Evil Rortybomb’s Survey

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In late November I talked about how credit cards specifically, and the consumer financial system more generally, was fee and ‘trick and traps’ based and how that amounted to a transfer from the poorest to the richest in our country. ... I was amazed at the amount of feedback I got that argued this was a great system, because instead of ripping off the poor to give benefits to the rich, it really transferred “from the ignorant and foolish to the informed and prudent”, or as one emailer put it, in a manner representative of many other emails: “It’s the irresponsible borrowers – who are often poor – that are penalized and the ultra-responsible borrowers that are rewarded. I fail to see the problem there.”
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I smell money – it’s like walking down a sidewalk and turning a corner and then there is suddenly money all over the sidewalk. One problem with hitting up sick people, single mothers, college kids who didn’t plan well and the cash-constrained poor with fees and traps is that they’re poor. Hitting up people with a lifetime of savings suffering from dementia is some real, serious money we can tap as a revenue source. Indeed someone who forgets what they were doing between reading “Bullshit Surcharge: $40″ on their statement and calling the customer support number to complain is our ideal customer – it’s the person who will be most profitable to us going forward.
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The people in [sic] at the beginning of this post who are excited about how the current financial service industry excels because it punishes the ignorant and irresponsible: on what specific grounds could you not have to embrace, much less oppose, the Evil Rortybomb Plan above? ... I don’t think anyone would argue against the idea that those suffering from dementia will be the most ignorant of their actual situations and most irresponsible in the sense that they aren’t capable of being responsible. The extra fees and traps they pay will in part also go to those enjoying extra bonuses and continued free financial services. It’s a win-win from this point of view, no?
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Old 01-05-2010, 10:45 AM   #44
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Originally Posted by RonBoyd View Post
I guess if I'm going to hi-jack a thread, I might as well go whole hog:

The Cognitively Weak, Financial Services, and Evil Rortybomb’s Survey
Absolutely agree.

There was a Frontline program on the Financial Services industry on PBS a few weeks back that highlighted a lot of these practices. One particularly bad practice, that a bank executive defended resolutely, is the practice of how debits are applied. On a particular day it is done biggest to smallest, not as they happen, and the customer is never given any warning that they are overdrawing. Example:

You unknowingly have ony $500 in your account and you make 5 small purchases in the morning totaling $100. In the evening you make a purchase of $510. If it happened "fairly" the first 5 would go through and you would at least get a warning and asked if you wanted to proceed with the last transaction.

What happens in practice is that the $510 is deducted first, triggering a $30 "Overdraft courtesy fee", and then all 5 small transactions get debited, each triggering their own fee making a total of $180.

Also, because it is called a fee and not a short term loan (which is actually what it is) they get around the law requiring them to post the interest rate on that loan (like the payday loan places have to do).
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Old 01-05-2010, 10:57 AM   #45
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Alan, I saw that Frontline program, too. Really despicable how they do that and get away with it. The banks turn responsible consumer behavior (the first 5 purchases in your example) into a profit for the banks at the expense of the consumer.
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Old 01-05-2010, 11:25 AM   #46
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Absolutely agree.

There was a Frontline program on the Financial Services industry on PBS a few weeks back that highlighted a lot of these practices. One particularly bad practice, that a bank executive defended resolutely, is the practice of how debits are applied. On a particular day it is done biggest to smallest, not as they happen, and the customer is never given any warning that they are overdrawing. Example:

You unknowingly have ony $500 in your account and you make 5 small purchases in the morning totaling $100. In the evening you make a purchase of $510. If it happened "fairly" the first 5 would go through and you would at least get a warning and asked if you wanted to proceed with the last transaction.

What happens in practice is that the $510 is deducted first, triggering a $30 "Overdraft courtesy fee", and then all 5 small transactions get debited, each triggering their own fee making a total of $180.

Also, because it is called a fee and not a short term loan (which is actually what it is) they get around the law requiring them to post the interest rate on that loan (like the payday loan places have to do).
I would be infuriated if that happened to a friend or relative.

Most of us on this forum are doing outstandingly well financially, compared with most Americans. Hearing about the plight of many people in our lower income areas is heart rending.

Given our financial success (in a relative sense), and given the lousy interest rates in most savings accounts, one thing we can do to avoid fees is to keep three months' living expenses (part of one's emergency fund) in checking. If an emergency really happens requiring that that money is used, then one can watch the balance like a hawk, but most of the time this provides a "cushion" to keep those overdraft fees at bay.

But can those in poverty do this? I seriously doubt it since the emergency fund is probably spent already, on food or other necessities.
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Old 01-05-2010, 11:56 AM   #47
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I would be infuriated if that happened to a friend or relative.
I have an uncle who's been dealing with these exact issues. He's relatively low-income, and specifically requested from the local bank that his debit card not have overdraft protection so that he couldn't spend more than was in his account. Somehow he still ends up being approved for purchases over his limit and then charged extra fees.
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Old 01-05-2010, 12:33 PM   #48
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In the early 80's I got hit with fees once by the bank using similar tactics. I opened my monthly statement to see that on the day my paycheck posted the balance went negative a little as a check or 2 also posted on that day but on the statement the debits were listed before the credit. I went to the bank to complain and asked them to prove that the paycheck posted later than the check that apparently caused the overdraft. they told me that it was standard practice to post debits before credits on a given day regardless of actual time of day. I demanded and got a refund on the basis they couldn't show me any document that I had ever received from them that explained that.

A month later I switched banks but also made sure I kept a much closer watch on things. These days with ATM's and internet access it is much easier to keep track.
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Old 01-05-2010, 03:55 PM   #49
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Between the two CCs that we use (MC and DC) our totals are about $2k each month. It's often less than that and occasionally way over that amount. We pretty much charge all of our purchases and spend very little cash.
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Old 01-05-2010, 03:58 PM   #50
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We put everything on credit cards but always and I mean ALWAYS pay them off each month. Spend is around $25,000 per month. We use the points for travel. The credit card business is great for the Banks (I know first hand) and if you aren't careful can really screw up your personal finances. You could view it as a tax on the weak and stupid I guess. A bit like casinos, tobacco companies, etc.
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Old 01-05-2010, 04:13 PM   #51
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Spend is around $25,000 per month.
Wow...
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Old 01-05-2010, 07:15 PM   #52
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We put everything on credit cards but always and I mean ALWAYS pay them off each month. Spend is around $25,000 per month. We use the points for travel. The credit card business is great for the Banks (I know first hand) and if you aren't careful can really screw up your personal finances. You could view it as a tax on the weak and stupid I guess. A bit like casinos, tobacco companies, etc.

Wow!!! what kind of business are you in? Prostitution?? (jk). You definitely can rake up some mileages and rebates if you can swipe $25k/mon.

I used to think credit card was a life saver when I needed the most but when it become too easy to swipe, life can get out of hands quick.

Enuff


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Old 01-05-2010, 11:47 PM   #53
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Like 7322454, my monthly credit card expenses are... $0.00 because I do not use credit cards.
Then how do you buy stuff online? Or rent a car? Both car rentals and gas purchases, if you use a debit card they reserve a large amount up front, and release the excess hold whenever they get around to it. When my son used his debit car to rent a car for a week ($350), they put a hold of $350 + $500---which wiped out his checking account until 10 days later when they released the $500.

As long as you pay the CC bill off each month, it's just like a debit card.

Except that you have a lot more legal protection with a CC than a DC. Plus if you have a dispute with a merchant, the CC company will make it the merchant's problem, whereas with the debit card it's *your* problem.

Oh, and with PedFed, you get 1.5% to 5% cash back on your purchases.
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Old 01-06-2010, 12:42 AM   #54
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Sure, and then maybe we could discuss "Should you pay off your mortgage" or "Should you take your Social Security at 62 or later?"

To be serious, perhaps you could do a search on similar discussions. This is one of those topics that goes round and round and round, and gets kind of boring after a while (yawn) since it's always the same old stuff.
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