I read a lot of money blogs. One of these days, I will get off my lazy ass and get my links updated and you can see the wonderful blogs that I read. Frequently, I see posts on credit cards. Posts that make me sigh heavy sighs.
For those of you who don't know, before I was a lawyer, I worked at a credit card issuer. When I left, I was working in a position that some would find akin to the devil. I was the one in charge of luring existing customers to use their credit cards for cash at the ATM and for other forms of cash. (And to do online balance transfers.) People certainly did use their credit cards for these types of transactions. I won't get into specifics. If you think lawyers are evil, trust me, I am a saint compared to what my previous job entailed.
Even though I haven't worked in the industry for a while, I read variations on the same themes. I see articles on a regular basis expressing shock and anger that credit card users are not interested in customers who are convenience users. No kidding. We weren't that interested in you in 2000, so I am sure the tides haven't changed.
What amazes me is how people feel so entitled to have their credit cards because, dammit, interchange fees are enough and the issuers should be happy with those fees and banks are greedy bastards and what do you mean that banks are failing all over the country and maybe they need to watch their profits? What?
Here's my little list of things to remember before you start going off on your credit card company:
- Your credit card issuer is a bank. It's not a non-profit. They want to make money. If they aren't making money, they are not going to care about you, no matter how perfect you think you are.
- Your idea of the perfect customer is probably different than the credit card company's. For a while, I was probably the perfect customer. I carried high balances, made more than the minimum payment, and charged it right back up to the limit ever month. Sadly, I was never late or over the limit, so I didn't get those fees.
- If your credit card issuer isn't making money off of you, they are not going to continue giving you stuff for free. So, yeah, don't be shocked when annual fees make a comeback. I have one open credit card right now. It has an annual fee if I don't use it for a certain amount of retail activity each year. What is the credit card worth to you?
- No fee rewards program with a convenience user. Yeah, they are probably losing money, so I bet they really love you. Those programs don't make sense and I think that the banks should start charging fees for the rewards programs. But I'm just a financially irresponsible lawyer. I'm not here to do bank bailouts.
- Debtors- if you settle with a creditor, that's going to show up on a 1099 at the end of the year as income. So, don't believe all of those amazing deals you may see on the commercials. Sure, some cards may be willing to settle, but it will impact your taxes.
- If you get a change in terms (like from those disloyal bastards at Citibank), you have the right to reject the change in terms and stay at the current interest rate. I recently heard someone object and say, well, yeah, but then you can't use the card. Um, no. When you use the card, that is you accepting the terms presented. You don't get the best of both worlds. They get to change the terms. You don't like it, you don't use the card. Get a different card and work on paying the balance off. I rejected my Citibank change in terms before I went on my DMP.
That's all I have for now. I find it a bit frustrating to read about how greedy the evil banks are. These are the same banks that were on the brink of failure, so do you really want the banks to continue the same behavior that had them on the brink of failure or do you want them to start behaving in a way that is fiscally responsible?