credit card meltdown

[Sneaks]

Hi Don,
I don't know what you mean by TANSTAAFL but otherwise I think we're saying the same thing. Merchants cannot get around the 3% fee and many payment gateway providers charge even more. Some have other "service" fees as you point out. There are several gateway providers available to online only merchants these days but PayPal is competitive in that they do not charge service fees.

Yup we are, shure nuff.

TANSTAAFL is short for "There Ain't No Such Thing As A Free Lunch."

I first saw the abbreviation in a sci fi story I read as a kid. Probably much older than me though. Maybe even older than Dusty who served as a Ltjg on the original USS Constitution, I think.

 

[Bill Uffelman]

Hate to intrude but I do represent the banks in Nevada.

The Merchant Discount Fee (the 2% to 6%) you mention includes a number of elements including the merchant gets paid if the card is approved -- the issuing bank and the merchant's bank suffer the loss if there is fraud -- believe me there is millions of dollars of fraud. If there is a security breach at the processors or other places the banks and credit unions suffer the loss -- you get a new card without charge (about $25 per card to reissue).

The Merchant Discount Fee also includes the interchange fee which pays for the global computer system that allows for the almost instantaneous completion of a credit or debit transaction. VISA and Master Card earn their income from the interchange fee.

Merchants are not prohibited from offering cash discounts look at ARCO service stations -- they just choose not to. Federal law covers this.

I could go on, but I'll cut it short. I just thought I would offer some facts.

Bill Uffelman
President & CEO
Nevada Bankers Association
In Carson City NV waiting for adjournment by 1 AM June 2

 

[DaveS]

Hate to intrude but I do represent the banks in Nevada.

-- believe me there is millions of dollars of fraud.

Bill Uffelman
President & CEO
Nevada Bankers Association
In Carson City NV waiting for adjournment by 1 AM June 2

Bill, you are certainly NOT intruding and I'm glad that you are participating in this discussion.

Your mention of "fraud" is in my opinion what got us into this whole mess. Personally, I've always preferred to pay by check. (I'm a "paper trail" kind of guy). Unfortunately because of the dipsticks that write checks on accounts with insufficient funds, and forge checks etc. etc. etc., I find that fewer and fewer places accept checks now. Last year, I was forced by the local feed store in our (still relatively rural) town to begin using a debit card (unless I paid by cash), since they no longer allowed checks as tender for purchases. (I've been a check writing customer of theirs for 32 years.....and have never bounced a check anywhere). About 25 years ago, I found the merchants in Everett not very willing to accept checks, so I started shopping in Mt. Vernon, where at that time they were still "small town" and readily accepted my checks. Like Tom mentioned, I used to use travelers checks for years but found places not even accepting those, with some folks looking at them with a reaction of "What is this?....I have gotten the feeling that some clerks think that it is monopoly money.

Rarely, do I utilize debit cards or credit cards for meals when dining out, and instead pay with cash because periodically I see some news story of some crooked waitress scamming people's cards for their own profits.

(As I mentioned earlier in this rant, I'm a "paper trail kind of guy", but am not happy that I no longer receive my cancelled checks back with the bank statement....but then I guess that was a bit of risk as well as they were being sent through the mail).

Ahhhhh, I guess I just pine for the good ol' days when the old series "Cheers" was on TV and "everyone knew your name" and trusted you and you could trust them and make a deal with a genuine handshake. :wink

Hopefully, the electric company, insurance companies, etc. will continue to accept my checks as payment for my monthly bills until the day that I die, as I STILL cannot bring myself to pay bills "on line"....I just can't bring myself to trust that method of doing business.

 

[Bill Uffelman]

Check 21 created the imaging and electronic transfer of checks that replaced the paper system -- a huge cost savings to the Federal Reserve and banks. No more small planes flying checks around the country to settle accounts.

Many merchants now scan your check at the cashier and return your canceled check to you. Businesses can also use the technology to make deposits from the office rather than taking checks to the banks.

Uing the technology, a merchant can determine whether a check is good within seconds rather than waiting a week to get a returned check and then incurring the costs attendant to collection.

USAA bank offers its customers software that allows service members from around the world to make deposits using home scanners and computers.

The Merchant Discount Fee is lower on PIN confirmed debit cards than credit cards. MDF is lower than bad check collection costs, a primary reason for merchants to stop taking checks.

Enough for tonight -- the Senate just overrode the Governor's veto of $780 million in new business taxes, Assembly will act tomorrow. Did I mention tha Nevada's economy is in the toilet???

Bill Uffelman
Lobbying in Carson City NV

 

[dave]

top four banks preparing to write off 24% of credit card balance. heard that tid bit in the news last week. thought, ok, how's that going to affect me? no big deal! i'm good!
received in todays mail a letter from ADVANTA, the holder of my company business credit card. they have informed me that the advanta accounts are funded by an independent trust and that trust has decided to stop doing business and therefore, effective may 30, 2009 they have cancelled all advanta business credit card accounts. let me see, that's 8 days notice from the date on the letter! i never maintain a balance, pay in full and on time. so, now must search for another quality company, any recommendations will be welcomed. can't see carry cash for fuel at the dock!
pat

Pat

I got the same letter. I also have a regular AMEX business card, but I would like a Visa or MC also. Let me know if you find another good one like Advanta.

Dave

 

[denny-o]

The banking industry is not monolithic - and I suspect there is no rhyme or reason to it, either...
I have two cards, one for business (Mastercard) and one for personal (Visa) both through Chemical Bank... Like many of you I do not carry over a balance after the end of the month - I missed one payment the last 30 years (wrote the check, put it in the envelope, and it slipped off the back of the desk, unseen - that cost me $105 in interest for the month -which smarts to this day whenever I think of it)...

[ I'm not tight, not me, no sir - ooohhh look, a penny on the ground -> happy dance.]

So far they do not charge a fee (I watch like a hawk) and they have consistently raised my credit lines... Now, they are sending me emails urging me to 'use your line of credit'...
But the day comes that they hit me with an annual fee, or start charging daily interest, those cards will be instantly demagnetized and mailed back by registered letter...

As I said, I'm not tight, not me!

 

[snal]

My B of A business card hasn't suffered any fee or limit changes, and it's a US Airways points card...still get the same ratio of points to $, but the available use of said points for airline tickets has been restricted quite a bit.
As I type...the restrictions are typically such that points redemption must be made well in advance, must fly out mid-week, between the hours of 1am and 3am, return flight must be a minimum of 7 days later, on a 3rd tuesday of any month that begins with "S", and the only available seating comes with a "flush" handle or a cargo net.
(Well...something like that

 

[Pat Anderson]

I am sure that some of the stuff Bill U has said is certainly correct, but a lobbyist for the banks has a bit of a bias! HIs job is to convince legislators to be kind to banks! But the banks bear MAJOR blame for the credit card problem that exists now, and their current attitude and behavior won't be tolerated. There will be a lot of major bank credit cards cut up or demagnitized and sent back. Banks complain of "fraud" - and there no doubt is plenty to go around - but it was the banks that sent out millions of unsolicited credit cards to children, dead people and others similarly unlikely to be able to pay. They themselves created the situation for the greater part of the losses they suffered. They encouraged people to have and use credit cards, run up those balances. They were happy with people carrying balances over. Remember that? It wasn't all that long ago...Now they behave badly with good credit risks who are a day late - arbitrarily reducing limits and jacking up interest rates - and Congress passes a law prohibiting that. Then like a petulant child, the banks say fine, if we can't do that, then we are going after even the people who pay on time. The problem lies not with Visa and MC but with the banks, and I am pretty sure it will be only a short while until I cut up my Bank of American Alaskan Airlines Visa card. I am applying for my local credit union's Visa card today! They behave much better than BoA. In fact, I think I am going to move all my accounts to the credit union and be done with Bank of America entirely.

 

[Bill Uffelman]

I only reported FACTS about the credit card and Check 21 system so that the discussion could be an informed one. Funny thing -- that's the same thing I do as a lobbyist -- lie to a legislator or the Governor and I am through. Same thing that the courts have required of me as a lawyer since admission in 1976.

For the record, B of A does not belong to the Nevada Bankers Association. Along with Citi they are among the best at shooting themselves in the foot.

As to Credit Unions watch the fees that they charge for a whole variety of services -- they are really hurting and have figured out that fees are the future.

Much of the credit card fraud seen today is ID theft related and is organized using the internet -- want some numbers just google and you can buy them. The major sources are off shore so thye aren't pursued by US.

The Nigerian check schemes are also a problem -- you may have seen that one of the major US banks even fell for one. Every day people call my office saying "I know that these aren't real BUT maybe this one is so why won't the bank cash it?"

Did the banks give credit to a lot of people who shouldn't have gotten it? -- absolutely. Did they get pressure to extend credit to lots of people who shouldn't have gotten it? -- absolutely. Do kids who go off to college know how to properly use credit? -- absolutely not.

Is credit tight now? Are banks under pressure from regulators and stockholders to improve earnings and performance ratios? Absolutely.

Will we return to the "good old days? -- I hope not becasue they weren't all that good as evidenced by the meltdown. We were all living a dream.

Bill Uffelman

 

[Captains Cat]

I have used Navy Federal Credit Union since 1964. They have always been top notch, I have had MANY auto loans and several mortgages through them. I use their online banking too. I have had them call me several times asking if I was the one using the card because it was in an unusual place or for an unusual amount. There was one instance where, somehow, someone got my CC number and used it for a couple of things which were quickly reversed and a new card issued. In another instance, a "test" charge for $1.00 was put through by someone in a foreign country. This too was quickly caught and fixed.

Another thing I have used lately is Lowe's "no interest/no payments" for 12 months. With a new house to furnish/fixup, it's been invaluable. I put that $ in a money market acct at 4% and when the time is up, pay the amount due in full. A win-win for me. They rewarded me by lowering my credit limit but it's still plenty to do what I need. It's something you have to watch though because they have a high interest rate and if you miss it, you get socked! Fortunately, I work at computers all day and keep close tabs on that and all my bank accounts.

I used to joke that my wife had lost her gold mastercard but I didn't report it because whoever found it was charging less than she did.... :shock: For some reason, she didn't like that and I don't do it any more! :disgust

Charlie

 

[Sneaks]

I am pretty sure it will be only a short while until I cut up my Bank of American Alaskan Airlines Visa card. I am applying for my local credit union's Visa card today! They behave much better than BoA. In fact, I think I am going to move all my accounts to the credit union and be done with Bank of America entirely.

I've been telling you that for years, little nephew. BofA is hands down the most devious of banks out there. Go to an ATM with their ATM card. Draw what you want - they do NOT warn you that you will be overdrawing the account - they give you the money then charge the outrageous penalties. No, it hasn't happened to me but it has happened to one of our young relatives.

BofA credit cards? Not since 1975. Screw me once, shame on you. Screw me twice, shame on me.... Works with banks too.

On the other hand, my 91 year old mother was hit with two electronic withdrawals from other banks, totalling $36,000. Ostensibly to pay off credit cards. Yes, those zeros are correct. All the perps needed was her account number and the bank routing number. Fortunately we don't keep that kind of cash in her account, but the banks all worked it out and forgave all of her penalties. In the case where her card was stolen, some $2500 was fraudulently charged at Nordstroms within hours. The cops know who did it, even have pictures of them, but according to the sheriff's office the likelihood of prosecution is very low. Too busy with violent criminals.... The banks ate the $2500. Do the banks self insure? Dunno. All I do know is that I never write checks anymore unless desperate, never carry a debit card, check my (and her) accounts at least twice/week online and shred everything possible with my Oliver North approved shredding machine.

Tough world out there. :amgry

Sorry for the rambling rant, Pat.

Don

 

[Pat Anderson]

The credit union we belong to is SnoFalls Credit Union. Five branches, all in Snoqualmie Valley. It is owned by the depositors. The board is all local. The difference with the credit union compared to the major banks is to whom they owe their loyalty. Of course they will charge whatever fees are necessary to remain solvent, but they are not driven by shareholder profits to screw their customers - their shareholders ARE their customers. This one is appearing more and more like a no-brainer to me.

 

[matt_unique]

...

I used to joke that my wife had lost her gold mastercard but I didn't report it because whoever found it was charging less than she did.... :shock: For some reason, she didn't like that and I don't do it any more! :disgust

Charlie

Ha ha ha! That's a great one....

I don't know Charlie, you might want to invest a few more years at your credit union to be sure they are legit. :lol:

I too have used a credit union since 1994 for "regular banking". I have used banks and other providers for loan deals on cars/boats. My credit union does not charge any fees, they make their money on loans and other services. It's nice to have a relationship with a smaller institution.

In terms of fraud I was hit last year. I worked out at the gym, left my bag unattended for literally 4 minutes, and my wallet was stolen. Thankfully I looked for it shortly after going to the gym. I looked everywhere thinking I dropped it or something. 2 hours after the gym I called my credit card companies. The first company said "did you just buy $75 worth of goods at TJMaxx in Newton"? NO! Unreal...the guy tried to use my ATM with no luck but he used my Visa twice. Long story short, I actually viewed the security tapes with the investigating officer. The thief was a pro...dressed in an overcoat with the collar up, wide brimmed hat, and never looked directly at any of the camera's. Imagine?!? This guy was white, I would guess in his 40's based on the skin you could see (hands, etc.), and needless to say well dressed :x Definitely did not look like what one might think a thief looks like.

Fortunately I did not yet have my TWIC card or that would have been another bit of fun. I never bring anything worth stealing to the gym anymore, I keep it locked in my desk with the key hidden.

It's definitely important to regularly look at the charges on your accounts. Most online frauds happen in small dollar increments from my experience; $10 here, $12.75 there, etc. so it goes unnoticed.

 

[Pat Anderson]

I want to apologize to Bill U - it was certainly not my intent to imply that he was untruthful in any way, and I hope nobody took my comments in that light!

 

[lloyds]

I had company one night on the boat when I was living aboard in seattle. It included two officers of US Bank. They were telling me about starting to charge for "talking" to a teller. They had it all figured out. The bank had actually done an in-depth study to determine how much gain, and how many customers they would lose. These were "customers", not "people". Big difference to big business. I thought that was a really crummy practice, the small town mentality is hard to give up, like Dave S says. I am with you Pat on banks attitudes towards "customers", but in this case I have known Bill U a very long time and bank lobbyist or not, he is a really straight on guy.

 

[Bill Uffelman]

Joint Rule 23 of the Nevada Legislature requires that I disclose that Lloyds is my cousin's ex-husband but his comment was not solicited so I'll take the compliment!

Lloyd I'll buy the beer and bait if we ever get to go fishing! 8>))

And US Bank suffered big time for their "talk to a person" fee -- stupid!

Everyone have a good day.

Bill Uffelman
Indiana attorney and Nevada lobbyist

 

[jhwilson]

I have a checking account at B of A as well as a credit card I hardly ever use. The checking account is not the one I use for normal everyday business and bill paying.

For the past several months I have gotten probably 8 to 10 calls from different people saying they are with B of A and stating they are mailing me a free credit report. Before the call is over (the first couple of times, after that I didn't stick around) the caller wanted to record the conversation and verify my name and mailing address. My response was if they were really B of A they had my address and could just mail the report to where they sent the monthly statements, etc. That wouldn't do so I, of course, hung up.

I also asked them not to call again, each time they said they would but to no avail. What I concluded after questioning one of the callers is that they are a contractor to B of A and are selling credit protection plans. Some of these callers were so lacking in verbal communication skills that it was hard to understand them.

After the last call earlier this week I called the manager of my B of A branch and told her that if I receive one more call I would cancel my credit card and move my checking account. She assured me the calls would stop but I'm probably going to cancel both accounts anyway.

I just can't understand the logic or lack thereof of these financial people. Maybe Bill U. can shed some light on it as I appreciate his earlier comments. For example:

-Why would a bank contract with a company who is going to make a negative impression on its customers?

-Why don't banks take into consideration the fact that when a person pays the balance on their account every month they are probably a better credit risk than someone who doesn't? And is it true we are referred to as "Deadbeats"?

-What is the logic behind charging us "deadbeats" interest from the day a purchase is made knowing that most of us will cancel the card and go with someone else?

-What is the logic behind making mortgage loans or issuing credit cards to people who are unable or not responsible enough to pay them off.

Anyway this is an interesting and timely topic.

Harper

 

[Captains Cat]

I want to apologize to Bill U - it was certainly not my intent to imply that he was untruthful in any way, and I hope nobody took my comments in that light!

Heck no! We all know you're a lawyer and deep down, not all that bad!

As the joke goes, "about 30 feet deep"

Now us engineers, we're another breed altogether... or at least half-breeds!! :roll: :lol:

Charlie

 

[lloyds]

Two more years and I will be there Bill. I spent an afternoon with Margaret recently and she is doing well.

 

[Sawdust]

Timely topic. Two weeks ago BOA called and asked if we had relatives or friends in Spain who were authorized to use her card. Heck no, sez Diane. Big money (for us), but BOA took the rap, issued new cards, etc. I know their reputation, but I've been with them since 84 (that's 1984, Don) and never had a problem. However, I've been looking for a deal on a demagnetizer. Not only for my cards, but kids, grandkids and great-grandkids... whew!!

Charlie, Sally is going to give you a knee where it hurts!!

Dusty