Happy Atheist Forum

New regulations. It's mostly good but also important to understand.

Quote from: "Morningstar"The core credit card regulations from the Credit Card Accountability Responsibility and Disclosure Act of 2009 went into effect Feb. 22, 2010. While the regulations are important consumer protections, there is still room for banks to profit off credit card holders, though it will not be as easy as in the past.

Link (http://news.morningstar.com/articlenet/article.aspx?id=327242)

I've been following this legislation for quite sometime.  The legislation basically prevents only some of the worst practices of the credit industry.  Like the article says, there are still plenty of ways for banks to make tons of money off you, and they're certain to come up with more in the future.

I'd love to say this is a step in the right direction, but honestly this isn't even a slap on the wrist for most banks' credit divisions.  I used to work in the debt reduction industry, and after seeing all the crazy stuff that happens to people when they're in debt, I don't think there is a way to stop abusive lending without capping interest rates like we did a long time ago.  There is another way that involves overhauling the credit rating system but that takes way longer to explain than I prefer to put in a single post.

What I do is I use my credit card as a way of earning points. I have the account set up so it is automatically paid off from my checking account every month before I pay any interest. I watch for charges on every statement.

Credit card debt is one of the worst kinds. The interest payments are really high because the debt is not secured. If you have any credit card debt that you don't pay off monthly, consider refinancing by securing the debt on your car or your house or some other asset. The interest rates should be lower. I'm not an expert of course.

My credit card company must hate me. I make money from them. I just traded in 25,000 points for $375 cash. I haven't paid them a dime, ever.

Quote from: "AlP"What I do is I use my credit card as a way of earning points. I have the account set up so it is automatically paid off from my checking account every month before I pay any interest. I watch for charges on every statement.

Credit card debt is one of the worst kinds. The interest payments are really high because the debt is not secured. If you have any credit card debt that you don't pay off monthly, consider refinancing by securing the debt on your car or your house or some other asset. The interest rates should be lower. I'm not an expert of course.

My credit card company must hate me. I make money from them. I just traded in 25,000 points for $375 cash. I haven't paid them a dime, ever.

They do make money every time you use your card - from the places where you spend money; because stores get charged both for providing the service and each time you make a purchase, the bill gets passed along to you in the form of higher retail prices.  So they love you.  And make money off of you.  Not much, but other people make up for it.

^^ you also have a checking account with them, which they make money off of.  where do you think the money for loans comes from in the first place

P.S. The Daily Show did a great segment on this tonight.

John Stewart just compared the new rules on spelling out minimum payments, how long, etc. to the ruling requiring McDonald's to spell out how many calories, etc. are in their burgers.  Basically, you can explain it to people any way you want.  Fat kids still love their Big Macs. HOLY SHIT THAT METAPHOR ALSO WORKS FOR RELIGION.

Quote from: "jrosebud"They do make money every time you use your card - from the places where you spend money; because stores get charged both for providing the service and each time you make a purchase, the bill gets passed along to you in the form of higher retail prices.  So they love you.  And make money off of you.  Not much, but other people make up for it.

Well that's a good point. It might be true, though if it is I think it is still a good reason to use a credit card so long as you always pay it off. Why pay cash, get no points and suffer from the increased prices that result from other people using credit cards?

Quote from: "theTwiz"you also have a checking account with them, which they make money off of. where do you think the money for loans comes from in the first place

I do have a checking account at a bank but it contains only about 1% of my net worth. It's a few blocks away and I like it for convenience. For short term cash investments, I prefer a money market account at a brokerage like Fidelity or Vanguard. I can look up the expense ratio, the type of assets they hold, the average maturity, etc. With the bank account I have no idea; there's no transparency. At least it has FDIC insurance.