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Now that new credit card regulations from Congress and the Federal Reserve are in effect, the banksters have come up with lots of new ways to rip us off and are expanding on old ways to rip us off. Before I go on, I want to remind people of one central fact.
"Credit Card Companies" = Banks
The banksters reserve many of their most reprehensible practices for their credit card customers. These practices are so larcenous that the banksters have invented the fiction of "credit card companies" in order to make it seem like somebody other than the banksters are responsible for that crap.
American Express: Now, if you are late with a payment, you have to pay a $29 fee to get access to the rewards payments you made on purchases. (CNN Money 2/22/10)
Bank of America: Intimidated customers trying to turn off the overdraft functions of their credit cards at bank locations. . (MSNBC article updated 2/23/10)
JPMorgan Chase: has raised it's fee for transferring credit card balances from 3% to 5%. (CNN Money 2/22/10)
JPMorgan Chase: Sent out threatening letters to customers trying to frighten them into opting into expensive overdraft protection. (MSNBC article updated 2/23/10)
Inactivity Fees: Some banksters are charging up to $36 per year for not using your charge card. (MSNBC 2/23/10)
Rising Interest Rates: Average interest rates increased by over 1% in the last six months. (MSNBC 2/23/10)
How Much Power Do the Banksters Have Over You?
According to a column in the Chicago Sun Times suggests that getting rid of a credit card account may not be as damaging to your credit score as you think.
Your concern is understandable, since it seems the credit card companies have all the power these days, in spite of the benefits of the new Card Act, which took effect Monday. If you make the decision to close your credit card account, assuming your credit is in good standing, it might have a small impact on your credit score. But that might not be enough of an impact to cause you to hang on to the card and pay an annual fee.
There could be two consequences of closing an account. Part of your credit score is based on your length of credit. So if you've had that card for many years, closing it could ding your score about 20 to 30 points, depending on whether you have other long-held cards. Even so, your score is likely to rebound within months.
One way to protect yourself, if you are the one closing the card (instead of the issuer), is to send a registered letter to the issuer when closing the account. Then keep a copy of that letter so that if your credit score declines, you have proof you were the one who closed the account.
Read the Full Article for Details.
Where Is the Money Going?
From AFP 2/23/10:
Bonuses paid to Wall Street securities industry employees in New York rose 17 percent to 20.3 billion dollars in 2009, state officials said Tuesday.
New York State Comptroller Thomas DiNapoli said total compensation at the largest securities firms grew even faster and industry profits could hit a record amount after unprecedented losses in 2008.
Banks are a big part of the "Wall Street securities industry."
What Is the Real Value of the Banksters?
A while back, Craig Murray posted a brilliant indictment of this parasitical class. One paragraph reminds us, in particular, just how little banksters contribute to the real economy.
I am typing this on a keyboard which was not made by a banker. It rests on a desk which was not built by a banker. I am sitting on a chair which was not made by a banker, which rests on floor tiles not made by bankers, resting on a concrete and steel reinforced floor not built by bankers in a house of similar construction. I have to hand a sausage sandwich - the pigs were not reared by bankers and the wheat was not grown by bankers, and a cup of coffee - the beans were not grown by bankers, the milk was not from banker raised cattle, the water was not purified by a banker, the sugar cane was not cut by a banker. The clay was not dug by a banker nor the kiln fired by a banker. None of it was brought to this spot and assembled or constructed by a banker.
The entire commentary is well worth reading. Money is a symbolic representation of goods and services. That's it. Yet, we have allowed the banksters to mystify money and their relation to it to the point that many of us don't realize just how inept and easily replaced these people are. We are bombarded with messages from media where the banksters advertise and make loans telling us we have no choice to go along with what the banksters want no matter how insane or destructive.
We all need to take a step back and think critically.
Any Alternatives?
The disgusting and irresponsible behavior of the banking industry is starting to get people to think about alternatives. One alternative that is getting a fresh look is North Dakota's socialist bank. More conventional alternatives like credit unions are getting more and more attractive.
Think You're Pissed Off at the Banksters?
This guy bulldozed his house rather than letting them take it via foreclosure.
Photo: wot_nxt
I just got a notice about my Kohl's Credit Card. This is what it said, "We are writing to inform you about changes to your Account that will be effective February 21 2010. These changes apply to the variable Annual Percentage Rate (APRs) on your account. (eg. standard, or penalty) that have a minimum APR. This means that such APR's generally vary with the market based on the Prime Rate, but do not go below the stated Minimum APR in your Cardmember Agreement. As of February 21, we will remove the stated Minimum APR. Therefore, your APR will remain variable and will continue to vary with the market based on the Prime Rate.
I guess this means, "screw you" deal with it, we will charge any rate we want!
I always maintain a zero balance on this card, but would like to cancel it just because they are pissing me off. Still trying to decide what to do. I am so disgusted by banks/credit cards right now!
Thanks for the informative blog post.
Lori
Michael Gene Sullivan makes a similar point to Craig Murray in his great piece Capitalism- the Gift That Keeps on Taking excerpts-
Myth: Capitalism Creates Wealth
No. Labor creates wealth. Capitalism simply profits from the labor.
Here’s a test: A guy with no money on the beach. With his bare hands he builds a sand castle that is so beautiful people pay him to take their picture in front of it. All he invested was his labor, and he will have more money than he started with.
Labor = Money.
Another guy. Same beach, $100 in his pocket.
And that’s it. Unless he does something. or pays someone to do something, that $100 is not going to increase. “Oh, he could invest it.” Hold on, there, Sparky. Wherever the guy would invest his $100 his return would rely on someone’s labor to turn it into profit. Starbucks is a profitable corporation, but if a laborer didn’t pick the coffee beans, roast the coffee beans, grind the coffee beans, or add hot water to make overpriced, hot bean juice, Starbucks investors would never make a profit. Labor is the essential ingredient to profit. So why aren’t we all proud Laborists, rather than wannabe Capitalists? Propaganda. And what kind of economy do you get when a nation convinces itself that money breeds money, investment alone creates wealth, and that labor is irrelevant? Look out the window.
...
A “capitalist” is someone who makes a living not from their own labor, but from their money, their “capital.” See, that’s why it’s called “capitalism,” and not “laborism,” or “hardworkism.” Interest, dividends, stock sales — not work. If you work for a living — even if it’s intellectual work, and you need that paycheck to live — you are a worker. (Middle class is just a worker with a mortgage.) “Oh, what about the hairdresser on the corner! What about the mechanic down the block!” Well, what about ‘em? If you own a business that you have to work at to make a living, you are an owner/operator, a self-employed worker. Let me say that again: If you own a small business that you have to work at you are not a capitalist! Sorry to shout, but for some reason people have a hard time with that one. The hairdresser, mechanic and the rest are owner/operators, living on their labor, and if they stop working they fail. Workers.
And they will try to rip us off and screw us as much as possible before the new guidelines go into affect.
Doing Bosch for Surrealistic Sunday this weekend! It's controversial in the art world to call him the first surrealist or controversial to surrealists or something like that. I don't much care for what they think. I consider him the earliest surrealist. Come on by!
I use credit cards for convenience and to get special offers, like cash back on my Costco AMEX card.
In July 2008 Fresh Air (NPR) had a great program about credits cards which you can find and listen to at:
http://www.npr.org/templates/story/story.php?storyId=92133862
When I was searching for the link to that one, I found another on Credit Card reform:
http://www.npr.org/templates/story/story.php?storyId=104937918
I set my cards up on auto pay so I can't miss a payment. I pay off my balances every month, so it doesn't matter what the interest rates are, but apparently I am considered to be a "deadbeat" by credit card companies because they make so little off of me.
They charge venders between 3 & 6% of each sale, so they make billions just from that alone, let alone finance charges and other fees.
But now that I hear they may charge for inactivity, I guess I better check my credit report. Last time I checked, there were at least 5 cards on there I had requested be closed years ago. I knew I should have done something about it, but didn't.
We recently made a large purchase at Lowes and they offered us 10% off if I applied for a card. I normally would pay if off immediately, but since they also offered 6 months same as cash, I figured I'd leave the money in my savings account to earn interest. (The interest will amount to only $7 over 6 months, but I figure better me than them.) Note: when they offer things like 6 months same as cash, if you don't pay it in full in 6 months, then they charge the interest you would have been charged without the offer ---so make sure you pay within the time limit. (Also, every time you apply for a new card your credit score drops a bit, and again if you use the new card. Take that into consideration.)
Sometimes it takes a little number crunching and some time to figure it out---but sometimes one can play the system to one's own benefit. The days of 0% interest offers are probably gone for good. However, during a rough financial time, I had to put $3600 on a credit card. I transferred the balance to a 0% interest card ---one year offer. At first I decide I would pay $300/month, so it would be paid off within that year, but when I realized the minimum payment was about $50, I paid $50 and put $250 in a money market account each month, figuring I'd earn the interest and pay it all off at the end of the year. But then I got another 0% interest offer and ended up transferring the balance to 0% cards over and over until it was paid off. (The secret is ---don't charge anything else on that card ---new charges don't get the 0% deal.) I didn't pay a penny in interest. I paid online, so I didn't even pay postage. And even after I had enough to pay the balance in full, I continued to pay the minimum and put $250 away each month. It took me 6 years to pay off the card in $50 payments, but in those 72 months I put away $18,000 ($250 X 72 months.) It gave me a nice cushion of money that meant I could pay cash or pay my credit card balances in full each month ever since.
Lori (and others):
If a credit card company ups your rate, call them. They count on most people just accepting that. But if you call and complain or threaten to drop their card, they drop the rate hike in about 50% of the cases. It doesn't hurt to ask.
My goal over the next year and into 2011 if necessary is to pay my cards off and keep the following:
One Visa
American Express
One Gas card
Lowes
And the rest will be x-nayed. I've cancelled cards before and my FICO was never negatively impacted.
Finally, a blog for the rest of us!