Tag Debit Cards

It’s Increditable

Michael Leave a comment

Recently I came into some money and did what I’ve wanted to do for years – pay off everything. You see, even though I’ve posted here any number of semi-rants about credit card companies and how we’ve come to pretty much ignore common sense and are willing to charge just about everything including a trip to McDonald’s, for years I had been guilty of just such stupidity. Over the past 5 or 6 years I hadn’t used a credit card but I was still paying for my imprudent spending for 30 years before then. Fortunately I have lived long enough to pay off all of those card and other loan balances.

Let me tell you now though, if you ever plan to do the same, prepare yourself for some pretty annoying communications between you and your soon to be former creditors. I knew enough to know that interest charged is charged daily. That means the balance you see on your statement isn’t your balance any more by the time you get your statement. I called every credit card company or bank (and there were a lot of them) to request payoff amounts. Out of ten lenders, only 3 representatives knew what I was asking. To the others, the thought of paying off everything owed was as foreign as using antennae to get TV reception.  They would parrot the auto-attendant’s parroting of the “last statement balance” and didn’t know that wasn’t the total balance. Fortunately I was able to get the information I needed from a call center supervisor. Perhaps that was unfortunate.

Even with a current balance in hand, a human on the phone, and an ability to pay the stated amount immediately, four of the accounts sent statements the following amount with new interest accrued and due. After making several more calls I was able to ascertain that the reason there were still balances was because although the amount paid equaled the amount due on the day of the call, the amount paid was not credited for 3 to 5 business days resulting in 3 to 5 days of accrued interest. So once again I had to request new payoff amounts and submit new payments. I was not amused.

One account I had actually overpaid. When given a figure it was for interest charged through the end of the billing cycle so when my payment was credited in 3 to 5 business days it was still a few days before the cycle ended and I ended up with a credit for that card. Since I was simultaneously closing accounts as I was paying them off, I had no account for the credit to be credited against. Yet, it was still listed as a credit on a following statement with no mention of how I was going to get my money back. Not wanting to, I called anyway. I was told certainly they could send me a refund check. I don’t know why but I had to ask, why they didn’t just send a check instead of a statement showing a credit for an account that didn’t exist. Their answer was that it was policy to report a balance on an inactive account for three billing cycles before issuing a refund. I thanked them for their information and informed them that if I ever decided to re-open a card with them I would consider the three month rule before I decide to issue them a check. They weren’t amused.

Who were these people anyway? The three cards’ telephone reps who hadn’t a clue about how to determine a payoff amount were all serviced by Citicards, the fourth was issued by RBS Citizens Financial.  The company who wanted to hang on to my money for three months unless I asked for it earlier was Discover. Capital One, USAA, and HSBC were the only creditors who actually were helpful in paying off their accounts.

Certainly it was my fault for getting into more credit than I had a right to. When I finally had the means to get out of debt instead of getting out of Dodge I did so. Apparently those I owed would have preferred I continued to owe them. That’s ok. It took a few months and lots of phone calls but now instead of a bunch of cards I carry around a bunch of money. Boy does that confuse the people at McDonald’s.

That’s what I think. Really. How ‘bout you?

And If You Order Now…Part 2

Michael Leave a comment

Some time ago we supposed, “We believe that with two you have a spare.  With three you have a collection.” (See ‘With Three You Get Collections,’ Jan. 9, 2012). Hold that thought.

When we last left our heroes, we were wondering how America has managed to create so many different ways of separating one from one’s money without leaving the house. And wondering beyond that if the trend might ever reverse.

We think we have some other trends that have to reverse first. Some time ago, He of We was at a financial seminar where the focus was keeping one’s money. One of the exercises the 30 or so attendees took part in was a card count. Not as in blackjack. As in credit cards. Not debit cards. Not insurance cards. Credit cards. With those 30 or so attendees there were 187 credit cards also in attendance. That’s at least 6 per individual. That’s a collection. If you add in the debit cards there were 245 cards hanging around in purses and wallets. If you run the math you’ll see that is more than one debit card per person. That might be a spare. The whole kit and caboodle is definitely a collection.

Let’s go back to January of 2012. We also said that collections are not rational and just a little obsessive. You might say that makes sense if we are speaking of coins or art or other objects of value and beauty. But credit cards? Yep, even them. Having six credit cards is not rational and a bit obsessive.   It is also empowers the marketers to continue selling to those who haven’t left the house.

The only way on-line shops, infomercials, magazine inserts, and television shopping networks work are if they accept something other than money. The ready availability of credit and debit cards is their ticket to your bank account. According to the Federal Reserve, credit card balances now total nearly $857 billion. With an average of just about 13% interest on that balance, Americans are paying just about $110 billion a year in credit card interest. And since we all seem to have a collection of them, once one is maxed out we can move on to another and never miss the opportunity to buy that $400 purse.

So there we go again with the purse. Is it so terrible that someone sells and someone else buys a $400 purse? No, it’s not. We’d just prefer to see that if someone is going to buy it for $400 that someone has to reach into her, or his wallet and pull out four $100 bills to pay for it. Then it will mean something. But that’s a different post for a different day.

If you too are concerned about the rollercoaster of remote shopping you too can do something about it. Break up your collection and get back to using money. If Capt. Kirk was able to figure out how to do it, you can too.

Now, that’s what we think. Really. How ‘bout you?

 

Return to the Paper Standard

Michael Leave a comment

Who hasn’t heard of the debit card fiasco at Target?  That story broke almost immediately after its discovery in December and still commands news space today.  Just as the most furious of the stories were waning about Target we heard that Neiman Marcus had a similar breach only this one was three months before its news release.  And just this past week we have heard that Michael’s card processing program was also a victim sometime last summer.  At least Target had the good sense not to hide its problem for six months.  We’re still not going to use our debit cards there ever again but we do appreciate their notice.

A couple of years ago we commented on how the lack of using real money has desensitized us to the true costs of many everyday items.  (See Paper or Plastic, Feb. 23, 2012.)  Then we said that money no longer seems to mean terribly much for many people.  Make your selections.  Swipe your debit card.  If you happen to swipe more times for more funds than you have money in the bank many bankers have overdraft protection pulling funds from savings accounts or automatically debiting lines of credit.  The bankers love that system.  What they collect in account fees and overdraft fees is more than enough to keep them from ever having to shop at Target.  In 2012 banks collected over 29.5 billion (with a B) dollars in overdraft fees.  That’s $29,000,000,000.00 charged to people who didn’t have enough money in their accounts in the first place.

There are certainly times when checks and debit cards are appropriate.  You could pay a bill with a money order if you could find someone who still writes money orders.  The banks still do for hefty fees.  Dropping a check in the mail is still the easiest way.  And if you want to do your banking by internet or through monthly auto-drafts, the debit card is indeed the way to go.  But maybe it’s time to rethink everyday shopping using money.  You remember money?  A funny shade of green, pictures of presidents and statesmen, can go through the wash relatively undamaged when you forget that it is in your pocket.   That money.  Real money.  Money that means something to you when you see it disappear into a cash register never to come back to you but that’s ok because you traded it in for something you really wanted or needed and you won’t have to keep one eye on your on-line bank account to make sure nobody else is using your money.

A couple of years ago we closed a similar post with, “Never actually seeing cash get handed over person to person has clearly kept rising costs out of sight.  Not recognizing the consequences of this lack of concern has clearly put us out of our minds.”  Today the rising costs aren’t just at the register.  Today we see the rising costs in losing control.  It makes one wonder who will be the next retailer to call a press conference over a security breach.  And how it will be our fault for not keeping better watch of our money.

Now, that’s what we think. Really. How ‘bout you?