an article to
Next time someone tries to justify those 28% credit-card interest rates by talking about the highly-granular and ultrawonky credit analysis that the card companies do, just point them to this post at Rortybomb. Or, if that’s too long and wonky, just ask them why all that highly-granular and ultrawonky credit analysis seems to treat everybody exactly the same way: 2 days late on your credit-card payment, and boom, your interest rate skyrockets.
Mike’s also right that Steve Waldman’s distinction between transactional credit and revolving credit is a crucial one which all too often gets elided in the credit-card debate. And the elision is largely the credit card companies’ own fault: they don’t make it easy to pay your bill in full each month, and they do make it easy to think “I can buy this now and use my upcoming paycheck to pay for it, and not pay any interest” — a very dangerous line of thinking indeed, for most of us.
My dream is that eventually cellphones will replace credit cards as the primary source of transactional credit: you pay for things using an RFID chip in your phone, and then just pay your phone bill every month. If you don’t have the money to hand, then you tap some kind of credit and borrow it, and you can’t kid yourself that that credit is actually transactional. The distinction between transactional and revolving credit would become much clearer, and the regulations on credit cards would make even more sense than they do now. But I fear it’ll be a long time until we get there.
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How do credit card companies make it difficult to pay your bill in full each month?
I do think there need to be rules in place to prevent massive increases in interest rates without real notice, something the bill the president just signed should help with (along with fixing massive frauds the card companies perpetrate on their customers related to how cash advances work). I don't think it's appropriate to pile all the blame on the card company, though.
Insofar as RFID cards go... a friend of mine has one of those and it's nothing but trouble. More often then not if he pulls the thing out before the person in front of him pays the register applies it to his card instead of the person in front of him. It also has a huge security problem since anyone in the vicinity can read the card.
I haven't even bothered to sign my name the last decade or so. I just put a scribble down and hand it back and nobody cares. Businesses aren't even required to get a signature for small purchases. If I go into Starbucks and hand them my card, they swipe it and hand it back and that's all there is to it. You can't get much easier then that.
-Matt
I agree with Felix, it is mind bendingly difficult to pay the card in full. I do my business with my credit card on line. The first incredibly difficult thing is to find my laptop amid the clutter on my desk. If it is on my desk's top, why do they call it a lap top? It's not on top of any lap that I can see. Anyway, after finding the thing, I have to push a button to turn it on. Then I have to turn on the Wi-Fi thingy. Then I have to start Safari. Once Safari is up and running I have to find the credit card's website. Now the real hurdles start. They ask me for a username. How the heck am I supposed to remember that? I go in search of my note pad and look up my username. Holly macaroni, now they want a password.
Success, I have finally arrived at a most confusing web page with dozens of choices that I have no clue about. Hunting desperately I discover a menu item that says "Make a payment." Ahhh! That page is terribly confusing as well, instead of a single choice to just pay the bloody card, I have to decide if I want to make a minimum payment, a full payment or some other, non-specified payment. Come on credit card people, don't make life so difficult, tell us what we should do instead of putting so may hurdles in our way.
Minimum, full or other, what a conundrum. I think about this long and hard and finally I make up my mind to pay in full. As I search for the appropriate button to click I see that the screen looks rather different with red lettering on it. It says that my session has expired to protect me. Oh goodness, do I have to go through this circus again? Maybe I should punish the card and not pay in full.
Is there a way to be compensated for all this wasted time? If I ever manage to log in again I'll see of there is a complaints department I can talk to.
Yes, Felix is right, it is so confusing to make a full payment that card companies should be punished by the Congress. Maybe they can produce 1000 pages of new credit card regulations that costs these horrible companies million of dollars. That will teach them!
It was really nice to get that off my cheat. Thanks felix, without your help it would have stayed bottled up inside me probably causing ulcers or worse.
Yes folks, because people were bombarded with 20 credit card applications a week for years and because most Americans opened as many accounts as possible, we all have to suffer because they can't pay their bills.
Poor debtor, to stupid to realize that they spent too much money and can't pay enough back because they had to have whatever crap they purchased and have it NOW.
It's not gonna make much difference. 7 to 10 million unemployed won't be paying their mortgages, credit card bills, auto loans, furniture loans, ........
Thanks again
Credit Cards
*********
mark lopez
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Card Service