Credit, But Not Where Credit is Due

Katherine Mangu-Ward | May 20, 2009

Most of the stuff in the credit card bill that passed the Senate yesterday and the House just moments ago seems like common sense reforms—don't raise rates after the debt has already been incurred, don't offer introductory rates that vanish instantly, give users more information about the size and structure of their debt, and make the fine print slightly less fine. It all sounds reasonable enough to the layman, which is probably why the vote went 90-5 in the Senate.

But of course, the reforms are not without cost. And the bulk of those hidden costs all be incurred by the people who played by the rules, didn't get into debt, and used their credit cards responsibly—and people who have yet to apply for a credit card. We laughed when our dogs received a pre-approved AmEx in the mail, but those days are going to look pretty rosy compared with the more restricted credit market that's kicking in now.

One soon-to-be victim of the reforms, Randall W. Forsyth, writes in Barron's today about how the slashing of perks and loss of flexibility that's about to take place:

I don't view the rebates I receive to be a windfall. I see this dough as a recoupment of the credit-card merchant fees built into the prices by retailers. That 1%-2% in fees is borne by consumers, whether they opt for plastic or paper....

Given the pervasiveness of the use of plastic, I can't see it being eliminated, even for low-margin merchants such as supermarkets. And for transactions such as airline tickets, car rentals, hotel bills, paying with cash will probably trigger a call to the FBI....

So, given all that, it seems likely I'm going to be paying the price of credit-card reform....

Meanwhile, as a saver, my interest income has been decimated by the Federal Reserve's slashing of interest rates to zero. As a taxpayer, I have borne the risk of the capital injections into banks through the Troubled Asset Relief Fund....I don't know why I'm getting the short end of the stick for having been prudent.

Plus, people under 21 will need parental consent to get a card, joining having a beer on the list of rites of adult life denied to 18-year-olds by the U.S. Congress.

UPDATE: The House voted at the same time to allow people to carry guns in national parks. You just won't be getting cash back on that family wolf-hunting vacation to Yellowstone from your credit card company anymore.

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|5.20.09 @ 2:35PM|#

people under 21 will need parental consent to get a card

This is bullshit. Lots of 18 year olds are out of the house and financially independent, and/or have no contact with parents for various reasons. Lot of kids with dead-beat abusive parents or other home problems they would like to escape from.

This effectively limits their financial indepedence, making them dependent on their parents for an extra three years.

Why not just raise the age of majority? Putting parents in control of your financial transactions effectively means you can't do anything without their consent.

This is going to be used by millions of parents to basically control everything thier kids do until they turn 21.

House of Burgers|5.20.09 @ 2:39PM|#

Hazel

It's to protect the stoopid college kids.

Kyle Jordan|5.20.09 @ 2:40PM|#

Control. That's the name of the game Hazel. And we're all getting fucked by it.

|5.20.09 @ 2:47PM|#

...people under 21 will need parental consent to get a card...

...

Wait, are eighteen year olds adults or are they children? This is really getting out of hand.

Of course considering the overarching scope of some of the other new regulations and bailouts that are being proposed one has to ask if any of us are considered adults any more.

|5.20.09 @ 2:50PM|#

I heard this on the morning and it was the first time I got really pissed about new regulations. It's the first time that a new regulation had so obviously and directly affected me. I believe it was Geitner that was literally saying that people who can pay off their credit cards every month should be charged extra to help take care of the people who are $20-$30k in credit card debt. He came right out and said they are doing this as a charity. That got a big "WTF you MFers!!!!" from me.

Nikola T|5.20.09 @ 2:55PM|#

Wait, are eighteen year olds adults or are they children?

Thanks to the government education system, TV babysitters, and the nanny state, I'd say the majority of people do not become adults until their late twenties, if ever.

Hmmm... How can we limit personal responsibility more?

No Name Guy|5.20.09 @ 2:56PM|#

- How about Congress be consistent (yeah, right he says while rolling the eyes) and make an 18 y/o "kid" get consent before joining the flippin army and getting his ass shot off in Iraq or Afganastan? Oh yeah....responsible enough to handle nuclear weapons in the Air Force - too stupid to handle a Visa at Sears.

Well.....anyways. Yet another example of the grasshoppers getting screwed by the ants.

Grasshoppers of the world - revolt. Time to let the flippin' ants starve.

Track 3, Operation Mindcrime.

|5.20.09 @ 2:56PM|#

What the FUCK! Are these pin headed cocksuckers in congress really dumber than slug shit stupid? Why not just fucking declare that every 18 - 20 year old in the entire goddamned nation is an irresposnsible child, unable to enter into any fucking contract with any fucking body for any fucking reason without Mommy and Daddy signing the piece of crap permission slip?

Let's go down the list of things that should require Mommy's permission before an 18-20 year old CHILD can agree to, shall we?

Drivers licenses.
Auto insurance.
Utilities.
Rental agreements.
THE U GODDAM S FUCKING MILITARY!!!
Abortions.
Tattoos.
Piercings.
Bank accounts.
Employment.
AMERIstupidCORPS.
Marriage.
College.
Trade School.

Feel free to add to this list of things that 18-20 year old CHILDREN should be required to obtain parental permission to do.

I guess these newly declared children will also only be charged as juveniles in criminal court. Right?

FUCK, FUCK, FUCK!!!!

Colin|5.20.09 @ 2:57PM|#

|5.20.09 @ 2:58PM|#

18, 21, high rates, low rates, advance notice, full disclosure -- who cares?

The federal government should have NOTHING TO DO with credit cards at all. It's private enterprise. It's basic freedome of contract.

We are so screwed.

Invisible Finger|5.20.09 @ 2:59PM|#

I don't know why I'm getting the short end of the stick for having been prudent.

Easy. You're in the minority.

Don't people know how democracy operates? The majority rules - when the majority is dumb fucks and crooks, they rule.

|5.20.09 @ 3:01PM|#

I acquired my fair share of credit card debt between the ages of 18-20...and 21-23 and then I paid it all off! WTF?! Just because someone acquires debt, regardless of their age, doesn't mean they aren't capable of knowing what they are doing or being responsible enough to manage it and pay it off when it is right for them. That's what credit IS!

|5.20.09 @ 3:03PM|#

And, oh yeah, we should definitely stop 18-20 year olds from purchasing things when the economy is in the shitter. Good job, fellas.

|5.20.09 @ 3:04PM|#

I don't know why I'm getting the short end of the stick for having been prudent.

To each according to their needs, from each according to their abilities. Just like we redistribute wealth by making the wealthy pay for everything, there is a shortage of responsibility in the nation that we're going to address through redistributing responsibility by having the responsible people be responsible for more things. I know it's confusing, but as a responsible person we know you won't mind.

BTW, I'm an old fart who's still pissed about being 18 and not considered a full adult.

Fuck congress, or at least 90 wisent cocksucking senators.

Oh yeah,
Hunting Licenses.
Gun ownership.

I\'ve Just Got Big Bones|5.20.09 @ 3:09PM|#

"Oh yeah....responsible enough to handle nuclear weapons in the Air Force - too stupid to handle a Visa at Sears."

I have a colleague who has a nineteen year old son in the Marines protecting Marine One. He currently has credit card problems. She's trying to sort it all out for him, but she says he never learned to handle money.

Shannon Love|5.20.09 @ 3:11PM|#

...seems like common sense reforms-don't raise rates after the debt has already been incurred,

Except that credit card debt is completely unsecured debt with no repayment deadline. As a consequence, the interest rate is calculated based on (1) changes in the interest rate over time and (2) an estimate of the rate at which the debt holder will pay off the debt.

In the case of (2), increasing interest signals people not to pile anything more on a credit card. In the case of (1) it lets you get a lower interest rate right now instead of paying for estimations of future rate increases.

If you try to treat credit cards like a secured loan with a fixed deadline, lenders will respond by pricing credit card interest like very, very risky bank loans. Credit cards will have interest rates more like payday loans.

So, those of us who can manage our credit cards will have to pay higher interest to cover the losses caused by those who can't.

|5.20.09 @ 3:13PM|#

The House voted at the same time to allow people to carry guns in national parks.

I've got $20 that says this is removed in conference committee.

|5.20.09 @ 3:14PM|#

I have a colleague who has a nineteen year old son in the Marines protecting Marine One. He currently has credit card problems. She's trying to sort it all out for him, but she says he never learned to handle money.

Well, he certainly won't find any role models hanging out at the White House.

Citizen Nothing|5.20.09 @ 3:15PM|#

No Name Guy needs to reread that fable.

TheExpatriate|5.20.09 @ 3:18PM|#

Folks, get over it.

As I can tell you from personal experience, you can get through life without a credit card. Indeed, I personally think you're better off without one. I am in my mid-twenties, and I only got a credit card this year. I prefer debit cards as they eliminate the interest issue, and even then, I generally prefer cash or check.

And, frankly, last time I checked, refraining from spending during a bad economy is generally considered a wise move from a personal standpoint. It may make recovery slower, but it helps your bank account.

The new thrift: learn to love it.

|5.20.09 @ 3:19PM|#

Brandybuck | May 20, 2009, 3:04pm | #

I don't know why I'm getting the short end of the stick for having been prudent.

To each according to their needs, from each according to their abilities. Just like we redistribute wealth by making the wealthy pay for everything, there is a shortage of responsibility in the nation that we're going to address through redistributing responsibility by having the responsible people be responsible for more things. I know it's confusing, but as a responsible person we know you won't mind.

I love it. 10/10.

|5.20.09 @ 3:24PM|#

TheExpatriate | May 20, 2009, 3:18pm | #
Folks, get over it.

As I can tell you from personal experience, you can get through life without a credit card. Indeed, I personally think you're better off without one. I am in my mid-twenties, and I only got a credit card this year. I prefer debit cards as they eliminate the interest issue, and even then, I generally prefer cash or check.

And, frankly, last time I checked, refraining from spending during a bad economy is generally considered a wise move from a personal standpoint. It may make recovery slower, but it helps your bank account.

The new thrift: learn to love it.

The only problem is debit cards carry up to a 75¢ fee per transaction. And I make up to 5¢ per dollar spent for every credit card transaction. I'll have to evaluate which is better when this crap gets passed and I see what the credit card companies are charging me simply to pay off my balance every month. If it ain't worth it then they've lost a customer. Of course, I have no idea what they have to gain from my being a "customer" anyway. Just in case some day I feel like paying 10%-25% extra for stuff--just for kicks?

T|5.20.09 @ 3:25PM|#

So, those of us who can manage our credit cards will have to pay higher interest to cover the losses caused by those who can't.

Yup. Why do I feel more and more like I'm living on Skaith?

sfb|5.20.09 @ 3:26PM|#

I fully expect all credit card companies to raise all interest rates, as allowed by current terms and conditions, before this law takes effect; thereby screwing everyone that has a non-zero balance.

|5.20.09 @ 3:29PM|#

The NYT this morning wrote that persons under 21 can still be issued a credit card if they show an independent income.

i.e. if you're an 18-year old who has a job, you qualify. If you don't have a job and are supported by your parents, you don't.

|5.20.09 @ 3:32PM|#

And when credit card interest rates go back up to the ca. 20% level they were at around 1990, before the issuers learned risk-based pricing (you know, the kind that will now be illegal), will people blame Congress? Of course not, they'll blame the greed of the credit card companies. They'll probably demand that the feds nationalize the credit card industry. After which rates will rise to 30%.

We are, as Crusader Rabbit sagely observes, so screwed.

|5.20.09 @ 3:33PM|#

As I can tell you from personal experience, you can get through life without a credit card.

Thanks for sharing, Expatriate. But what would be so effing bad about leaving it up to us to decide whether to use credit cards or not? Oh, yeah, that's right: some people are stupid and would misuse that freedom, so none of us should have it.

|5.20.09 @ 3:34PM|#

Meanwhile, as a saver, my interest income has been decimated by the Federal Reserve's slashing of interest rates to zero.

I doubt very seriously that Mr. Forsyth has his passbook account at the Fed. Neither does his bank. He either needs a more solid understanding of the way banking works or to be less disingenuous.

Correct me if I am wrong, but part of the problem is that the credit card companies have lobbied very hard to make it illegal for merchants to either add a surcharge for people who buy with credit or provide a discount to people who use cash (the whole "credit or debit" question at the supermarket each week). People who pay with cash have been carrying the burden as much as the people who never pay credit card interest.

"I'm the Loser in This Card Game" -Randall W. Forsyth

Or maybe the perks you were previously given were paid for by unethical practices.

Brandon|5.20.09 @ 3:34PM|#

Note that 113 of 178 House Republicans and 36 of 40 Senate Republicans supported final passage. The party of limited government strikes again!

|5.20.09 @ 3:36PM|#

RC Dean, the Concealed Carry in National Parks amendment passed by big margins in both House and Senate. The overall bill has also been passed by both House and Senate and is going to the President for his signature.

http://www.foxnews.com/politics/2009/05/20/credit-card-forces-dems-vote-gun-rights/?test=latestnews

Email me and I'll send you my address for the $20 ;-)

The great irony is that Coburn's amendment is stronger than the administrative rule that the gun banners managed to block using the federal courts. Heh, wait to go, gun banners! Win a battle and lose the war! Blowback is a bitch!

|5.20.09 @ 3:43PM|#

I don't think the credit card companies will effectively pass much along to people who pay on time, at least not to those that spend a good deal on their cards.

One of the ways the companies make money is the fees they charge merchants who take the cards. Those fees will become even more important if revenue from late fees, higher interest, etc. gets cut by this bill. Losing high-spending customers will seriously cut into the merchant fees. I think a lot of cards will institute an annual fee, but waive it for people who spend $10k or so a year on the card. They'll probably also jack up interest rates, but that won't hurt people who pay on time. No card will get away with charging interest without a grace period- only suckers would take that deal. They also won't get rid of rewards- that's one of their best way to 1) distinguish themselves from the competition, and 2) get you to spend more than you otherwise would by rationalizing to yourself that you're getting the rewards.

|5.20.09 @ 3:45PM|#

"Plus, people under 21 will need parental consent to get a card, joining having a beer on the list of rites of adult life denied to 18-year-olds by the U.S. Congress. "

And you can't get a handgun permit either so you still won't be able to carry in a National Park.

|5.20.09 @ 3:46PM|#

Wade, some states give concealed carry permits to 18 year olds.

I\'ve Just Got Big Bones|5.20.09 @ 3:48PM|#

"The only problem is debit cards carry up to a 75¢ fee per transaction"

Mine doesn't. And I get 4.5% APR on my checking account balance.

|5.20.09 @ 3:49PM|#

Oh shit, I'm under 21 and I already have an unsecured Credit Card?

What's gonna happen to me? Will they make me renegotiate the loan, or will I just be unable to get new cards or balance transfers until I'm 21?

Zeb|5.20.09 @ 3:54PM|#

I've been meaning to get a credit card for 10 years or so now. But every time I read the contract that comes with it (the contract that basically says they can do whatever they want to at any time) I can't bring myself to sign.

|5.20.09 @ 3:55PM|#

The Bush Administration rule required among other things that:
The gun owner have a concealed carry license.
The gun owner carry a handgun concealed.
The state in which the park was located had to allow carry in state parks. (Not 100% sure about this).

The Brady Campaign sued and successfully blocked this. Coburn's amendment simply says:

The Secretary of the Interior shall not promulgate or enforce any regulation that prohibits an individual from possessing a firearm including an assembled or functional firearm in any unit of the National Park System or the National Wildlife Refuge System if--
(1) the individual is not otherwise prohibited by law from possessing the firearm; and
(2) the possession of the firearm is in compliance with the law of the State in which the unit of the National Park System or the National Wildlife Refuge System is located.

Thus Arizonans without a license can now carry any firearm openly in their national parks and Texans can now carry rifles and shotguns openly in their national parks since those activities are in compliance with the law outside the Park.

Note that this may not apply to federal buildings such as Visitor Centers. There is a separate statute in place for "federal facilities". It is not clear to me how this new law will affect the existing statute.

TheExpatriate|5.20.09 @ 4:02PM|#

Seamus,

I'm not advocating taking away your blessed freedom; I'm just pointing out there's life without credit cards. You all whine like it's the end of the world, when it's not.

Personally, I don't see the appeal of credit. You can buy most things you need a credit card for with a debit card. The magic of debit, at least in my humble opinion, is that it actually draws from money you already have, rather than something you'll have to pay later. I think that's worth a small fee, especially if you do not use it a lot.

I also don't see how getting a credit card qualifies as a rite of passage. Frankly, I think a real sign of maturity is not getting a credit line until you're well established financially, with a full time job. Similarly, I am more willing to consider someone an adult if he doesn't take a drink.

Patrick|5.20.09 @ 4:06PM|#

I use a credit card for every single payment I make. And I do not carry a balance to the next period. Therefore, all my money is deferred one month. Anyone who every took a fucking class on TMV will know that this is a benefit. Not to mention the cash back rewards. If you're currently not using a credit card, then most likely, you're just 1. afraid of yourself of spending too much, because you're too fucking dumb to monitor your purchases online. or 2. you already said fuck to the establishment. (I can at least have some respect to the latter)

|5.20.09 @ 4:09PM|#

"Personally, I don't see the appeal of credit."

In the age of theft of card numbers, the limited liability rules that go along with credit cards, and don't go along with debit cards, is a pretty big advantage.

I\'ve Just Got Big Bones|5.20.09 @ 4:11PM|#

"In the age of theft of card numbers, the limited liability rules that go along with credit cards, and don't go along with debit cards, is a pretty big advantage."

My debit card is issued by Visa. Best of both worlds.

|5.20.09 @ 4:13PM|#

I've Just Got Big Bones, check your agreement carefully- you may not get the protection when you use the debit feature. When you use the credit feature, the protection is mandated by federal law.

TheExpatriate|5.20.09 @ 4:13PM|#

No, Patrick, I'm not stupid and I can't give a rat's ass about the establishment. I just love the feel of cold, hard cash in my hands. It just makes me feel so....

Mmmmm...

Pardon me while I go to the bathroom for the next ten minutes ;)

JB|5.20.09 @ 4:15PM|#

"I don't know why I'm getting the short end of the stick for having been prudent."

Because Obama wants more welfare-queen dickless Democrat voters.

Bretton|5.20.09 @ 4:32PM|#

"Because Obama wants more welfare-queen dickless Democrat voters."

What? Welfare-queens get miles of cock.

I\'ve Just Got Big Bones|5.20.09 @ 4:35PM|#

" I just love the feel of cold, hard cash in my hands."

I'm with you, TheEx (but not in the bathroom). I keep $3,000 cash on hand in a safe at home. Do you know how far you can get on $3,000 without being traced?

TheExpatriate|5.20.09 @ 4:49PM|#

Never had to consider the tracing issue, but it's a good point.

What feels even better is hard currency, like the British have. Instead of making paper money for one pound notes, they have one and two pound coins. There's nothing like plunking down a one pound coin for a piece of candy.

creech|5.20.09 @ 4:51PM|#

So will libertarian campus groups (if there are such things) get the students riled up about being infantilized by their hero Obama's Party and their gutless GOP henchmen?
Certainly, the kiddies under 21 shouldn't be voting without permission either (might get caught up in vote fraud)or marrying (might stumble into a polygamous relationship) or going to police academy (might join an out-of control SWAT team -but I repeat myself.) and so forth.

Brandon|5.20.09 @ 4:54PM|#

More confirmation from the NYT on 5/18:

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

"It will be a different business," said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation's biggest banks. "Those that manage their credit well will in some degree subsidize those that have credit problems."

|5.20.09 @ 4:54PM|#

Sure, SOME 18-20 year olds may not be able to handle debt. But by passing a law requiring ALL 18-20 year olds to get parental consent you are punishing every 18-20 year old that is responsible enough to do so, AND has a good reason for not wanting to be dependent on a parent's consent.

Okay, I have been on the receiving end of this extended childhood crap. When I was 18, I applied for a student loan to pay for the cost of college. Well, the student loan requires that the parent co-sign the loan unless you are considered "financially independent". Financial independence is defined as having lived outside the home and supported yourself for at least 5 years. You cannot have received money from parents or been claimed as a dependent on tax forms.

Effectively, what that meant is that, because my insane (litarlly, but not legally) mother didn't want to sign the loan forms, because she was a controlling fuckhead, I couldn't get the loans to go to college.

Well, actually I forged her signature, thereby committing fraud in order to obtain my freedom.

But the fact of the matter is, that if I had obeyed the law, i would have been effectively enslaved to in insane, absive controlling parent for an additional five years and had my educational and financial future severely limited, because the loon didn't want to let me go to an ivy league university, because she didn't want to live alone.

|5.20.09 @ 4:55PM|#

The loss of rebates is nothing compared to the other measures the credit card companies will take, such as reinstituting annual fees (I read yesterday that BOA is now charging some users $149) and charging interest without grace periods.

This type of reasoning makes me laugh.

As it currently stands, CC companies will do ANYTHING for a buck.

There is nothing currently preventing them from charging annual fees to all customers, even the ones who don't carry a balance -- why don't they? (Hint: It has nothing to do with regulation and everything to do with competition)

Even the grace periods threat is nothing but saber rattling.

Do you really think if the market permitted it, they wouldn't already have no grace period?

The "threats" by the CC companies are much ado about nothing.

Go ahead and eliminate grace periods and charge an annual fee on all cards -- and then let's see what your competitors do without some type of collusion.

Let's see who breaks ranks first and corners the market on people who pay the balance off each month.

Furthermore, many people who don't carry balances and use a CC for nothing other than the rewards you get will just switch to Debit Cards -- thus giving the CC companies a double Fuck you (1. by not paying their annual fees, etc - and 2. By taking away the 2-5% transaction fees -- debit cards transaction fees are much much lower)

Empty threats is all these are. The reason why no-annual-fee cards and the grace period exist already is a function of market/competition. They are still going to have to compete for business, regardless of what regulation the feds pass.
And the CC business is still very profitable, despite the new regulations in place.

Oh and requiring a parent to OK a CC for an 18 year old is the height of bullshit and stupidity. Either your an adult or you aren't. If the bank wanted to do that on their own, that's one thing -- but to require this of all banks and to prevent all 18 year old ADULTS to have to do this is ridiculous.

dmoynihan|5.20.09 @ 4:56PM|#

In the past two days, I've seen one of my cards (not used in two years), tell me they're jacking my rate up 4% (stated reason, "unprofitable account.") I decided to send them $1.01, so they'll have to issue me six more statements about my credit balance before writing me a check.

The other credit card (used for business, paid off monthly), w/ BOtArp, just told me I was going to be paying 4% fees (minimum $3) for a bunch of shit like foreign transactions, even those denominated in dollars (that used to be free... I actually make a lot of small purchases from booksellers in UK/Netherlands, so, fuck you.)

Losing high-spending customers will seriously cut into the merchant fees.

Oh, and speaking of merchant fees? Yeah, they're going up, too. One company's buying up all the other players now, and doing stuff like holding 20% of your monthly sales as reserves in case of returns. (Some say as much as 50%).

Finally, my paypal debit card is going to cost me $1 for withdrawals on the road (paypal debit is mostly used for when I'm very drunk at ATMs I don't trust... typically I'm already paying $4 to withdraw anyway, and I don't really remember where the money went, but, again, fuck you, those used to be free, and the money market rate was higher than .16%, assholes.)

JB|5.20.09 @ 5:03PM|#

Either your an adult or you aren't.

I would support a Constitutional amendment to have the age of majority be 18 for the entire US.

Jennifer|5.20.09 @ 5:04PM|#

As I can tell you from personal experience, you can get through life without a credit card.

No matter how much cash you have on hand or available for withdrawal from a liquid savings account, try renting a car, or a room in a reputable hotel, without a credit card.

And I suspect that trying to pay cash for an airline ticket puts you on the government's secret terrorist list.

|5.20.09 @ 5:28PM|#

Those who click on TheExpatriate's name will be directed to his blog where they can find confirmation of what a truly smarmy selfrighteous prick he is.

Oh Noes You Dint!|5.20.09 @ 5:34PM|#

"And I suspect that trying to pay cash for an airline ticket puts you on the government's secret terrorist list."

Debit cards do those things just fine.

Thorough|5.20.09 @ 5:38PM|#

McCain would have been worse.

|5.20.09 @ 5:46PM|#

No matter how much cash you have on hand or available for withdrawal from a liquid savings account, try renting a car, or a room in a reputable hotel, without a credit card.

My Visa Debit card lets me do all that. It doesn't charge me a fee per transaction, and it has the (more or less) standard $50 stop loss, which is typically waived.

Credit cards are for spending money you don't have. Not that there aren't good reasons for doing that, as Hazel Meade has aptly illustrated.

The 18yr old restriction is a stupid addition to what could have been reasonable legislation.

|5.20.09 @ 5:57PM|#

My Visa Debit card lets me do all that. It doesn't charge me a fee per transaction, and it has the (more or less) standard $50 stop loss, which is typically waived.

Credit cards are for spending money you don't have. Not that there aren't good reasons for doing that, as Hazel Meade has aptly illustrated.

In fairness, Credit Cards provide a lot more than just that.

Many Credit Cards provide an extended warranty for items purchased on that Credit Card (sometimes it extends the MFGR warranty by a year or more).

When renting cars, many car rental companies wont accept debit cards, or if they do, the put a hold on money in your account above and beyond what the actual amount you will pay. Hotels do this too -- they will put a hold of extra $X dollars per day you are staying to cover the cost of incidentals -- if you happen to rack them up.

Most Credit Cards also provide car rental insurance for free so you don't have to buy their insurance.

Credit cards also offer better consumer protection via the ability to do charge-backs than Debit Cards do. Usually when doing a charge-back, the CC Company is an agent/advocate for you and deals with the merchants and forces them to prove the charges are valid.

There's a lot of things that Debit Cards can't/don't currently do. There are many advantages to the consumer when using a CC over a Debit Card. It isn't as simple as using it to spend money you don't have.

No Name Guy|5.20.09 @ 6:07PM|#

Alright Citizen Nothing - I got it backwards. Mea culpa.

Point is the same. The lazy asses need to be tossed out on their ears.

At least I can do vector calculus (and figure out if I can afford my flippin' mortgage.)

|5.20.09 @ 6:08PM|#

Credit cards are for spending money you don't have.

Not AMEX (green, gold, platinum). They are charge cards, and you have to pay them in full at the end of the month. They are a convenient substitute for cash/debit that have many perks, like rewards points (I paid for plane tickets to Europe with my AMEX Gold points), fraud protection, rental insurance (as ChicagoTom pointed out), etc. If you have a problem with any charge they will suspend it and investigate.

Membership has its privileges.

|5.20.09 @ 6:12PM|#

Actually, it gets trickier to live without plastic if you're an independant contractor who is ALWAYS waiting to get paid by clients. (This was me five years ago). Just having an extra 30 days in which to pay business expenses--incured on behalf of the deadbeat client, no less-- really helps.

And even if you're a salaried employee who gets reimbursed by her employer for business and travel expenses, you're usually forced to use your own credit card. And even the biggest companies will take forever reimbursing you. The last thing you want to do is lend your employer money, esp if it involves expensive international travel.

(Hazel Meade, awesome story. I would have done the same!)

|5.20.09 @ 6:18PM|#

Credit cards also offer better consumer protection via the ability to do charge-backs than Debit Cards do.

Visa Debit cards work the same way as credit cards in this regard, BTDT.

Membership has its privileges.
Yup. And my mother used to save Green Stamps. ;-) Don't get me wrong, I like my business AMEX card, I just think lots of people would be better off with a debit card. YMMV

Spoonman|5.20.09 @ 7:21PM|#

That's infuriating. I'm graduating from college in December and getting a job, probably buying a house too, and getting married or at least engaged. But I can't get a credit card unless my dad signs the contract? I'll be an Ivy-league educated engineer with my own house, completely financially independent, and I can't be trusted to get a goddamn plastic rectangle?

|5.20.09 @ 10:18PM|#

I have an AMEX debit card. If you can't find a debit card that works at least as well as a credit card paid in full, you need to get a better bank. Now. This acceptance of weak card issuers is one of the things that allows BoA/Citi and teir ilk to continue to exist.

If you are under 21 you can incorporate or setup a trust and get a card that way.

deja moo|5.20.09 @ 10:41PM|#

Back when I needed a credit card, I tried getting one of those "pre-approved" cards. Bottom line, "pre-approved" didn't mean approved. And I still can't get credit because I don't have a credit history, even though I've paid off three mortgages in the last thirty years. Just sayin'.

wayne|5.20.09 @ 11:42PM|#

Wow, that chick in the glittery gold miniskirt is f%$#ing gorgeous. She is absolutely perfect, nice legs and breasts and no head!

robc|5.21.09 @ 8:09AM|#

The only problem is debit cards carry up to a 75¢ fee per transaction.

Only if you are banking at the First National Bend over and take it up the Bank.

TheExpatriate|5.21.09 @ 12:48PM|#

"Those who click on TheExpatriate's name will be directed to his blog where they can find confirmation of what a truly smarmy selfrighteous prick he is."

Said the person who couldn't even think of a name to type in.

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