7 October 2002
Stupidity: it's everywhere you have to be

I'm sorry I missed this when it happened, but I'm sure its Rankle Quotient still remains fairly high.

Ever since debit cards acquired Visa and MasterCard logos, they've been heavily promoted as the way to make a purchase without going through a whole lot of may-I-see-your-ID stuff. The reality, reports writer Katie Allison Granju, is quite different indeed, and if you've seen those TV spots no, never mind, I won't spoil it for you.

Permalink to this item (posted at 1:11 AM)
4 January 2003
Sagging TITT

Which, of course, refers to the OTC stock symbol for something called Titan Technologies, Inc.

Getting stock-related spam is nothing unusual in these parts, but getting stock-related junk fax is something entirely new for me, and, if I remember correctly, possibly even punishable.

As for TITT itself, it's selling, as of this moment, at twenty cents a share, and the tout says that it "can easily reach $2.00 in a very short period of time." (Emphasis in the original.) Maybe it can, but I see no reason to be hopeful.

Permalink to this item (posted at 5:37 PM)
17 January 2003
A bustle in my hedgerow

And a considerable row it is; being a defensive person by nature, I have constructed my 401(k) accounts in such a matter that dismal stock-market performance is largely offset by gains in other areas. While this hedging wasn't as startlingly effective last year as it was in the two years preceding, I did manage to hold my losses (the fund manager calls them "negative returns", which is a tad too euphemistic to suit me) to less than 3 percent, which, given yet another year of stocks in the toilet, isn't all that bad.

Younger and more aggressive investors, as you might expect, took it on the chin, or perhaps in more painful locations. Of course, if stocks actually turn upward for an extended period, the way they used to in the Good Old Days, their portfolios will perform better than mine, but in the meantime, there's still time to change the road they're on.

Permalink to this item (posted at 7:18 AM)
4 February 2003
Veni, vidi, Visa

TO: Humongous Bank and Trust Company (Member F.D.I.C.)


Inasmuch as you rejected my credit application on the basis of eighteen-year-old information from some two-bit credit bureau not among the established Big Three, you've got a lot of damn gall to follow up the rejection letter with a copy of the same promotional offer.

I will make a point of determining the identities of all your subsidiaries and affiliates and avoiding as many of them as is humanly possible for the rest of my earthbound existence.

Permalink to this item (posted at 6:53 PM)
5 February 2003
And bullet holes may affect respiration

In a regulatory filing with the Securities and Exchange Commission, Microsoft made the following startling declaration:

To the extent the open-source model gains increasing market acceptance, sales of the company's products may decline, the company may have to reduce the prices it charges for its products, and revenues and operating margins may consequently decline.

In a footnote, Microsoft chairman Bill Gates noted that rainfall is sporadic at best in the Mojave Desert, and that children under six should not drink bleach.

Permalink to this item (posted at 7:57 AM)
12 February 2003
Transaction declined

It should surprise no one that I'm not the only one cheesed off at a credit-card issuer. Dennis Rogers at The Legal Bean has written his own nasty letter:

For the remainder of 2003, let's make a deal: How 'bout you calculate your total projected cost of future mailings to me over the next 11 months, cease sending me any more pre-approved notices, and thensforth send me a check for that amount. I will duly sublimate the funds into my bank account and use the money as I see fit.

No way am I gonna ask him what's in his wallet.

Permalink to this item (posted at 8:09 PM)
14 March 2003
On the edge of dot.commerce

I never did quite understand the business model at Epinions.com. Paying consumers for their product reviews sounds like a heck of a good idea, but who's going to read them, and where does the money come from?

Well, it obviously came from somewhere, because the company was actually in the black, and now it's being acquired by shopping site DealTime for some unspecified sum. And I have to assume that some of the reviewers were making a few bucks; I wrote a handful of pieces for them (though none lately) and earned a smidgen under $100, which, while it isn't a lot, is more than I'll likely ever make off blogging.

Hmmm. I wonder if there's a shopping blog out there?

Permalink to this item (posted at 8:32 PM)
19 March 2003
It's not easy being Greenspan

The Federal Reserve's Open Market Committee is evidently just as confused as the rest of us: while interest rates will remain unchanged for now, the Fed uncharacteristically gave out no hint of what it's thinking or where it's going.

Analysts, of course, rushed to interpret the Fed's lack of guidance.

Permalink to this item (posted at 7:47 AM)
17 April 2003
Make mine zinc

Jason Kottke explains the marketing rationale behind the titanium credit card:

Head of marketing: "OK, does anyone here know anything about science? What's better than platinum?"

Designer: "My computer is made of titanium. It's pretty solid. And the screen is huge. Have you seen that commercial with Mini Me and..."

Everyone: "Titanium! Of course! That's the answer!"

There's just one problem with that answer: titanium cards are not necessarily better than platinum. They may carry platinum-level credit limits, but they may not have platinum-level bells and whistles. Neither Visa nor MasterCard defines titanium benefits; these are determined by the individual card issuer. Gold and platinum cards, however, come with standard benefit packages.

The back of MasterCard's current Platinum Cardholder Benefits guide offers this hint:

These benefits are provided exclusively with MasterCard Platinum cards that have a credit line of $2,000 or more, or otherwise with cards expressly offered with such benefits by the issuer.

And only a few of them are provided with my titanium card; I get no roadside assistance or extended-warranty protection from it. (I do have a platinum card from another issuer, which explains why I have the benefits brochure.) Of course, this should be obvious: titanium see your periodic table is lighter than either gold or platinum.

Wonder what I can get with a depleted-uranium card?

Permalink to this item (posted at 8:04 PM)
23 April 2003
The trouble with take-home pay

I can definitely relate to this:

I just closed the deal and sold my first fine *cough* art piece. The money from selling my stained glass window is enough to get me an extra month's ren


Um, enough to cover rent and make life a little easi

"Psst. Over here."

What? Who's there?

"It's your camera, I really could use some more memory. I saw a 128meg card on sale."

No. Later, ok?

"Hell-ooo? Darrrling! It's your wardrobe talking. Is it 1998 again? You really need some new digs, sweetie."

No! You're inanimate objects! You're not supposed to talk! Ahhhh!

About the only way to avoid this is to live in constant denial, which is even less fun than it sounds, but the alternative is five or six digits of debt and eventually throwing yourself upon the mercy of the court.

I mention this because I got my Target Rewards 10-percent-off certificate yesterday, and I could use a new TV for the bedroom.

Permalink to this item (posted at 10:31 AM)
5 May 2003
Right-sizing" for today

I'm inclined to believe I'm not the only person on earth who maintains a direct correlation: one box of checks, one check register. And this isn't as easy as it used to be, either. While the number of bills hasn't decreased (ha!), I'm paying a lot of the recurring bills via my bank's online facility, which means that I might write maybe six, seven checks a month instead of 20 or 25, which in turn means that with all those online transactions, ATM withdrawals, Visa Check Card purchases and whatnot to log in, the old-style register, designed for a box of 200 checks, just isn't sufficient anymore.

How is the world's largest check printer dealing with this? They've added a few pages to the register and started packing 150 checks to the box.

"Did the price go down?" What are you, nuts?

Permalink to this item (posted at 6:00 AM)
16 June 2003
What's out of your wallet?

A brief word of praise for Capital One, so far the only credit-card issuer I've seen who actually sends a follow-up letter to confirm the cancellation of an account.

Of course, if they had offered a better interest rate, I probably wouldn't have canceled the card in the first place, but at least they answer their mail.

Permalink to this item (posted at 5:12 PM)
20 June 2003
What's on your envelope?

I can't believe I'm doing another post about Capital One already, but this merits some attention.

The Postal Rate Commission has cut a deal with Capital One; the so-called "Negotiated Service Agreement" will save the card issuer 3 to 6 cents per piece mailed, beyond standard presort and other discounts, for the next three years, up to a maximum of $40.6 million.

Somehow I doubt any of that forty million will go to keeping your interest rate down, but such is life.

Permalink to this item (posted at 6:02 PM)
9 August 2003
Sticking check valve

All the ads say and almost everyone I've talked to confirms that you can order replacement checks for your checking account from any reputable printer, not just the one with whom your financial institution is affiliated.

Unless you bank with Wells Fargo, as Kim at Revolving Duck is unhappy to report.

Permalink to this item (posted at 6:11 PM)
2 September 2003
Forbes 400, it ain't

According to something called the Global Rich List, yours truly is the 57,547,924th richest person in the world, just barely within the top 1 percent.

I question their methodology I'm sure there are people below me on the list who have a greater (or at least less negative) net worth but it does serve as a reminder that there are a rather large number of people (although probably not exactly 5,942,452,076) worse off than I.

And it also reminds me of Arlo Guthrie's rambling "The Pause of Mr Claus", which has about the same instructional value:

During these hard days and hard weeks, everybody always has it bad once in a while. You know, you have a bad time of it, and you always have a friend who says "Hey man, you ain't got it that bad. Look at that guy." And you look at that guy, and he's got it worse than you. And it makes you feel better that there's somebody that's got it worse than you.

But think of the last guy. For one minute, think of the last guy. Nobody's got it worse than that guy. Nobody in the whole world. That guy...he's so alone in the world that he doesn't even have a street to lay in for a truck to run him over.

And he probably didn't need to hit a Web site to tell him he was the last guy, either.

(Via Plum Crazy, which reminds you to subtract expenses before making any calculations.)

Permalink to this item (posted at 7:08 PM)
15 September 2003
Thou shalt not be late

A little 4 x 6 card arrived in the mail today with dozens of lines of 6-point (maybe) type, and after going into Heavy Squint Mode, I finally got the gist of it.

A bank whose Visa card I use has offered to settle a class-action lawsuit which alleged that it failed to credit some cardholder payments on the day received (which, if true, is tacky) and failed to include in the Minimum Payment Due on some statements an amount sufficient for cardholders to avoid an overlimit fee (which, if true, suggests that some people can't figure this out on their own). The bank, of course, denies any wrongdoing, and is basically paying the lawyers to go away.

The following Serious Changes are being made in the bank's M.O.:

  • Cutoff time the time of day after which payments will be credited the next day will change from 1 pm to 3 pm.

  • The bank will exercise due diligence to insure that payments are credited, even if the due date falls on a weekend.

  • The bank will fork over $3.5 million to settle claims.

Now I don't know how heinous their crimes are I've never been late with a payment to this bank, and as far as I'm concerned their service has been first-rate so far but inasmuch as the lawyers are getting a third of the loot, I have to assume that this is essentially a shakedown.

And to further support this assumption, there's this sentence about what I, as a member of the class, can expect:

The average cash recovery is estimated to be less than $10.00.

Considering that the average late fee is about three times that, this isn't much of a settlement unless, of course, you're counsel for the plaintiffs. I am seriously tempted to write a letter to the Court to opt out of the settlement, just because it will likely cause at least $10 worth of paperwork.

Permalink to this item (posted at 9:10 PM)
22 September 2003
All I do is complain

Or so I've been told, anyway.

If you wonder what my complaints in Real Life" are like, you're invited to read a letter I am just now mailing to a bank whose credit card I have decided to cancel. The crux of this particular biscuit:

Not to knock your service, which has been just this side of exemplary. However, to justify this kind of expense, "exemplary" isn't enough; for this kind of money, I'd expect this card to press my trousers and wash my dishes.

Okay, maybe I do complain a lot.

Permalink to this item (posted at 7:36 PM)
24 October 2003
The new DemoCard

Providian Financial, the ninth-largest credit-card issuer in the US, will offer an affinity card to supporters of the Democratic Party. Cardholders will earn rebates on their purchases which they can designate for donation to the Democratic National Committee, and can earn rewards by donating directly to the DNC.

Given the Democrats' desire to don the mantle of the Party of Fiscal Responsibility, what with Bush administration budget deficits running into the bazillions these days, I find it amusing that they'd strike a deal with a credit-card company that built its business on customers with lousy credit ratings.

The GOP? They already have a card.

Permalink to this item (posted at 11:18 AM)
27 October 2003
Not with a whim, but a banker

At any given moment, the best credit-card terms I have are the most likely to disappear.

Back in the early 90s, I got a MasterCard from Chemical Bank in New York, an operation renowned for customer service. Shortly thereafter, Chemical was acquired by Chase Manhattan, which was at least sentient enough to realize that their own credit-card operation wasn't as spiffy as Chemical's. Accordingly, Chase allowed the Chemical people to run the combined card service, and for a while it was good, though eventually attrition took its toll and Chase settled into what I would characterize as a decent but uninspiring averageness.

As a hedge, I picked up another MasterCard, this time from a joint venture between NationsBank and Discover (!) called Prime Option, which indeed offered a variety of options, including the ability to pick your own due date and the opportunity to blow off one payment per year. Needless to say, this couldn't last, and Prime Option sold me (and presumably its other customers) to the relentlessly-indifferent Household Bank, which continues to send me promotional material a year after I sliced up their card and returned it.

About a year ago, I overhauled my card portfolio, ditching higher-interest cards and replacing them with cards offering more favorable terms, and no one offered me more favorable terms than Fleet Boston, whose Visa now occupies the place of honor (such as it is) in my wallet. Naturally, Fleet's days are numbered.

If there's a bank you'd like to see bought out, write to their credit-card department and have them send me an application.

Permalink to this item (posted at 12:24 PM)
4 December 2003
Mr Greenspan, bring me a dream

Jay Solo, contemplating a choice of roofs over his head:

Is a crash or stall of real estate price pending soon? Are things as outrageous as I perceive them to be, or do I need to get a life (and a better income that changes my perceptions)? You think rentals will seriously go down? If they do so enough, that has implications for home sales. High rent makes a not much higher mortgage appealing. Low rent makes it another story.

I always recommend getting a life. Not that I ever follow my own advice or anything.

Rents, at least here in the Less-Than-Teeming Milieu, seem to trail housing prices by about nine months. Right now, homes in the relatively-affordable range out here, this means sixty to eighty thousand dollars or so are moving quickly, but the supply hasn't dried up yet because interest rates are still low enough to justify trading up. (Older homes at roughly twice this price point are going begging because the average new home costs about the same and theoretically requires less upkeep; really high-dollar houses, however, are selling well.) If interest rates rise substantially, a lot of people will choose to stay put, which leaves fewer properties on the market, which will force up prices even faster at the low end, creating a higher demand for rentals, which well, you get the idea.

One factor which affects rents is the de facto Federal subsidy for properties which lease to Section 8 tenants; many a landlord has gotten into the business by buying an apartment complex on the cheap. In Oklahoma City specifically, this has created a two-tier system, where apartments similar to the one I just departed (two bedrooms, c. 900 square feet) rent for $400 to $500 at places that take Section 8, or $700 to $900 at places that don't. (No points for asking "Is it worth three hundred a month to avoid poor people?")

I've gone on record as stating that interest rates are probably going to rise over the next couple of years, which notion led me to buy now instead of waiting until I could supposedly afford it. I did the math, and way more than half of the extra $400 a month I'd presumably have in 2005 would go straight to an increased house payment; a point or two in the interest rate and the expected 15-20 percent increase in housing prices would easily absorb a couple hundred dollars. Jay thinks there's a bubble about to burst, and in some places I'm sure there is, but where I live, at least, we don't seem to be headed for a fall: the local economy is growing slowly, but it is growing, and it's much more diversified than it was in the days of the early-80s oil bust. I fully expect someone to offer me a third again as much as I paid for this place by 2006. Not that I'll take him up on it, unless I win the lotto or something.

Permalink to this item (posted at 4:31 PM)
16 December 2003
From the Silver Lining Department

About seven months ago, I complained that check printers now give you 150 to the box instead of the formerly-canonical 200, and at pretty much the same price too.

I have since found some tiny upside to this, um, resizing: it now takes about twenty-five percent less time to shred a box of checks to be discarded. Given the limitations of my shredder it would take weeks to dispose of Steve Buscemi with this cheap contraption this is a noticeable difference.

Permalink to this item (posted at 11:55 AM)
22 December 2003
Pass the tenterhooks

Donna's buying a new home, and once she found the place she wanted, what happened next was that strange distortion of the space-time continuum that besets every buyer: the time between putting in your bid and getting a response from the seller seems like approximately 2.3 days for every 24 hours you have to wait. I just hope she slept through it. I know I didn't.

Of course, once that's finished, things seem to happen in a big hurry, though I suppose it's probably still too early to try to wangle an invitation.

Permalink to this item (posted at 11:17 AM)
14 January 2004
Get thee behind me, Chase

Back in October, commenting on a big bank merger, I said this:

If there's a bank you'd like to see bought out, write to their credit-card department and have them send me an application.

Needless to say, this was before J. P. Morgan Chase put up $58 billion for Bank One.

That bit about not putting all your eggs in one basket doesn't at all anticipate that the baskets might want them there.

(About that title: Back in the pre-Morgan days, Chase had a brief advertising campaign to the effect of "Put The Chase behind you," usually with someone who isn't really a businessman but who plays one on TV saying something like "When I need to expand, I put The Chase behind me." One of our language pundits, probably either Edwin Newman or William Safire, pointed out that putting something behind you had an entirely different meaning to some people: "Thank God, I never have to bank there again!")

Permalink to this item (posted at 11:25 PM)
29 January 2004
Just sign the papers, young lady

Right about now, right around Philadelphia, Donna is handing over most of her life savings in exchange for a stack of papers this high, a set of keys, and a mortgage that looks for all the world like the federal deficit.

Remember that old shtick about "This is the first day of the rest of your life"? When I did this back in November, the very moment I turned the key for the first time, I knew that's where I was: square one on a whole new path. I have a feeling she's going to see it much the same way.

Buyer's remorse? Barring actual structural catastrophe say, the roof deciding to come down and pay the floor a visit it ain't gonna happen.

Now to wangle an invitation.

Permalink to this item (posted at 10:48 AM)
12 February 2004
Deficit spending for one and all

Last fall, I reported on the upcoming Democratic Party credit card, issued by Providian, a bank which has been working to upgrade its portfolio from the largely-subprime accounts that nearly drove it to bankruptcy in the late 90s.

I have now received a promotional offer for the Democratic Party Platinum Visa, and from the looks of things, Providian is still thinking like a subprime lender: I mean, 17 percent? The big print, of course, is devoted to a balance-transfer deal of 3.99 percent, which runs out in September. The designated DNC rebate is 1 percent.

I haven't seen an offer for the Bank One Republican Victory Fund Visa, but I suspect the terms might be better; the card I do have from Bank One runs less than 10 percent, and the best deal I've ever wangled from Providian is, yes, 17 percent.

It didn't help that in the same mail there was an offer for a MasterCard from Capital One, another issuer I have forsaken in search of lower rates, for 12.9 percent. (On the other hand, C1 wanted an annual fee, which the Democrats didn't.)

Permalink to this item (posted at 7:16 PM)
22 March 2004
Unclear on the concept

We process credit-card transactions for maybe two thousand customers every week, and 1,950 of those create no issues whatsoever. The remaining fifty, however, generate more nonuseful work than the 1,950 in aggregate.

I have come to believe that most of these people basically don't have a freaking clue about how credit cards work, and the remainder are somehow persuaded that they're gaming the system to their own benefit. Either way, their stories are unconvincing: "But I mailed my payment to Seattle first thing Monday morning" doesn't mean squat Wednesday afternoon, unless Seattle has received and processed and posted said payment. Confronted with evidence of their doltishness and/or perfidy, they react defensively, as though we were the IRS performing an audit, or offensively, as though we simply don't understand how important they are.

There is, of course, no fix for this, short of banning a substantial number of deadbeats pour encourager les autres, and The Powers That Be are not keen on this idea, inasmuch as it might discourage some people from taking advantage of our services. I have pointed out that people who produce no revenue really ought to be discouraged, so far to no avail. Once, only half in jest, I proposed posting the offenders' names and card numbers to the Web; public humiliation has its charms, and since these cards aren't any good in the first place, there presumably wouldn't be any unauthorized charges.

Actually, I'd rather have them shot.

Permalink to this item (posted at 8:01 AM)
Accounts sprayable

Brian J. Noggle has some serious reservations about paying bills online:

It's a security risk multiplied by the number of payees and middlemen. Any one of them could get hacked and suddenly, I am buying computers for Romanians.

Worse, if anyone of these entities has a mere computer glitch, suddenly my bank account is empty and all other checks, debits, and withdrawals are bouncing, and my bank is charging me an extra $20 a day to remind me that my account is still empty. I have seen enough critical defects outside the financial industry to recognize how tenuous the Web is and to put my actual information and my credit rating on the line.

In exchange for assuming these risks, what do my creditors and the online bill-paying industry offer me? Convenience.

I say: Not good enough.

My own experience with paying bills online has been mostly positive, but mostly is the word you want to note here: a couple of creditors actually bobbled their payments, sending them back whence they came because they couldn't figure out what to do with them. This isn't exactly severe, but it isn't helpful in the slightest, and I subsequently quit doing business with one of the offending firms. (The other one, I probably should have, now that it's possible to do so.) My bank, generally regarded as high on the Evil List, has always gone to bat for me when I've sought resolution for these issues, but if this system were as wonderful as they claim, there wouldn't be issues in the first place.

And some things city utilities, insurance payments, mortgage I still send as checks, just because.

Permalink to this item (posted at 2:59 PM)
1 April 2004
How now, Dow Jones?

For the first time since 1999, Dow Jones has shuffled the portfolio that makes up their oft-quoted Industrial Average.

AT&T, International Paper and Eastman Kodak, all of which have been part of the DJIA for decades, will be dropped as of the start of trading 8 April. Replacing them will be AIG, Pfizer and Verizon.

The reasoning, from Wall Street Journal managing editor Paul E. Steiger:

[The changes] recognize trends within the U.S. stock market, including the continued growth of the financial and health care sectors and the diminishing relative weight of basic materials stocks.

Adjustment factors are applied to insure that there is no numerical discontinuity when changes are made to the portfolio; it has been many years since the DJIA was determined by simply adding the prices of those thirty stocks.

Permalink to this item (posted at 9:39 AM)
14 April 2004
Alternative minimum tacky

Sometimes you just shake your head in disbelief. And if you don't, well, I do.

I'm looking at my Visa statement. Now it should be a surprise to no one that credit-card issuers will do almost anything legal some of them have actually gone beyond legal to improve the take. (The fine print on the back of this statement says baldly, "We will allocate your payments and credits in a way that is most favorable to us.") What happened here falls into the category of "legal but kinda silly."

As it happens, I owed no finance charge at my usual rate, the result of careful juggling of promotional schemes, but there was $3.77 remaining on a previous balance transfer, which, charged at 5.99 percent annually, works out to one cent of finance charge.

Except that there is a minimum finance charge of $1 for any month where there is any finance charge at all, so I was duly charged a buck for my $3.77 balance, and the legally-required disclosures pointed out helpfully that this works out to an effective annual percentage rate of 322.72 percent.

Ah, well. Life is like that. Next time I should do the math a month in advance, eh?

Permalink to this item (posted at 5:38 PM)
15 April 2004
Taxation: it's everywhere you want to be

A new survey reveals that the majority of American taxpayers are aware that the Internal Revenue Service accepts major credit cards, but few are willing to put their tax balances on plastic because of the fees charged (usually 2 to 3 percent).

This really isn't too surprising: if you're facing a $1200 payment, coming up with an extra thirty bucks isn't going to make you feel any better, even if you've got a twenty-day grace period on your MasterCard. The survey suggests that the IRS, should they want greater use of plastic, should follow the lead of real merchants and pay the cost of card processing themselves, billing the $1200 and then collecting $1170 or so from their card service. I have serious doubts, though, that the Treasury will consider such a thing.

Permalink to this item (posted at 8:23 AM)
27 April 2004
Radical plastic surgery

Last time we heard from Carte Blanche, owner Citigroup had essentially merged it into Diner's Club, but the two travel/entertainment cards, even combined, continued to lose ground (and market share) against the American Express juggernaut.

Citigroup has now decided to give Carte Blanche a boost by making its acceptance ubiquitous: the Carte Blanche card will now bear a MasterCard logo, which means that any place which honors MasterCard (which is just about any place that hasn't struck an exclusive deal with some other card) will be happy to take Carte Blanche.

This action could spur demand for Carte Blanche cards, and it should solidify Citigroup's position at the top of the MasterCard food chain. (Citigroup, after a court battle with Visa over branding, no longer offers new Visa cards, though existing Visa accounts are still serviced.)

Still to be determined: what, if anything, will happen when JP Morgan Chase, the third-largest issuer in the MasterCard universe, completes its merger with Bank One, at the top of the Visa heap.

Permalink to this item (posted at 8:49 AM)
2 May 2004
One word: plastic

An interesting sidebar in the May/June Mother Jones by Dave Gilson and Jennifer Hahn, who put together a list of the ten largest credit-card issuers and matched it up to the political contributions collected from them by the major parties from 2000 through February 2004. Admittedly, this is an issue to which I give not a whole lot of thought; my major concern with a credit card is trying to reduce the amount of interest and fees collected from me.

Citigroup, the largest card issuer, has forked over $8.8 million in contributions, more or less evenly distributed between Democrats and Republicans, the GOP having a slight edge. For six of the other nine, the GOP has more than a slight edge: #2 MBNA has paid out $6.3 million, over $5 million of which went to the Republicans which is no surprise, since recently-retired MBNA chairman Charles Cawley is a major Bush fan and #3 Bank One sent two-thirds of its $3.3 million to the GOP.

In the other direction? Well, there's Providian, probably by no coincidence the issuer of a Democratic Party affinity card, whose contributions total just under a million dollars, 53 percent of which went into Democratic coffers.

And if you're thinking that maybe you'd just as soon have a card company that doesn't spend a lot on political contributions, your best pick among the top ten is Capital One, which peeled off less than $900,000.

Permalink to this item (posted at 9:45 AM)
5 August 2004
Really heavy plastic

The folks at Columbus Bank and Trust Company (Member FDIC) won't say so on their Web site, but they are apparently the vendors of the Aspire Visa card, an offer for which crossed my threshold yesterday, and which provided undue levels of mirth.

Unlike some other cards I've seen, this one doesn't demand a fistful of fees before activation. On the other hand, Aspire isn't about to lose any money on this deal: the preferred interest rate is a whopping 29.75 percent, increasing to 35.75 in the case of delinquency. For someone who doesn't qualify for the preferred rate, it's 35 percent, increasing to 41 percent for deadbeats. And incidentally, these are variable rates: should the prime rate rise, which Mr Greenspan says it will, these rates rise right along with it. I suspect the Mob has more generous terms than this.

Having successfully (for now) fended off a card issuer's attempt to get 16 percent out of me on a card they gave me at 8, I can assure you, I'm not even thinking about applying for this little darb, even with its lofty (ha) $3250 credit limit.

Permalink to this item (posted at 6:31 AM)
13 October 2004
Don't leave court without it

Bylaw 210(e) is part of the agreement a bank signs with Visa to be able to issue Visa cards. MasterCard's "Competitive Programs Policy" is similar. Both these clauses say basically the same thing: you can offer Visa and/or MasterCard, but no other credit cards.

In 1998, American Express, having been rebuffed in an effort to sign up banks to issue Amex cards, managed to persuade the Department of Justice that these policies were anticompetitive, and the government duly sued.

Three years later, the government won its case: Southern District of New York Judge Barbara Jones ruled that the policies violated antitrust laws. Visa and MasterCard appealed the decision, MasterCard arguing that American Express was not being denied access to customers by these policies. The 2nd District Court of Appeals upheld Judge Jones earlier this year. And the Supreme Court has now declined to hear further appeals, meaning American Express and Discover are now free to contract with banks.

MBNA, the third-largest card issuer (the merged Chase/Bank One is first, followed by Citibank), had already negotiated a deal to issue American Express cards, pending resolution of the suits, and they're ready to go after new and presumably upscale customers.

Permalink to this item (posted at 3:52 PM)
4 December 2004
Reasonable accommodation

Bank Leumi, the leading bank in Israel, is working with Visa and MasterCard to produce a credit card that will not function on the Sabbath, for use six days a week by Jews who strictly observe the day of rest.

There is no indication whether Bank Leumi's US branch, which already offers a Visa card, will make the new card available to its Orthodox customers.

(Via Fark)

Permalink to this item (posted at 9:25 AM)
11 February 2005
Low finance

Mergers in the credit-card industry have left the top ten issuers with 84 percent of the market.

I don't know whether this necessarily spells a deterioration in service: I currently have accounts with three of the top ten, and have no particular problems. One characteristic I value highly is the willingness to listen to whatever bee I may have in my bonnet that day and yet not blow me off; each of my favored issuers has been tested by me and found to be at least somewhat amenable to persuasion.

Unlike number three on the list, with whom I have no experience, and who, says Erica, deserves a hearty round of Number Two.

Permalink to this item (posted at 7:34 AM)
13 February 2005
Your basic high-interest product

In Britain, they're called "doorstep lenders," but we have them here too: loan offices which specialize in lending to persons of questionable or nonexistent credit. More mainstream lenders tend to look down their noses at these competitors, and there is constant negative attention from opponents of such schemes.

Up to now, most such lenders have handed over cash through storefronts: there have been subprime credit cards, but so far issuers of plastic haven't approached the astonishing annual percentage rates typical of a cash-advance place. This is apparently about to change, at least in Britain, where Provident Financial, a large doorstep lender, has opened up a subsidiary called Vanquis Bank, whose purpose is to issue Visa cards at 49.9 percent or even higher rates. Few American card issuers venture beyond 30 percent.

With limits starting around the £150 range, the Vanquis Visa could be considered a comparatively-inexpensive alternative to the storefront lenders, but Her Majesty's Government is of course incensed that anyone could even think of such a thing.

Provident is already offering a Visa-branded card that allows access to payday-loan proceeds via ATM.

(Via The World Wide Rant.)

Permalink to this item (posted at 3:11 PM)
2 March 2005
Plastic everywhere you look

CardData reports that there are nearly fifteen payment cards per household in the US: 6.3 bank credit cards, 6.4 retail cards, and 2.2 debit cards. (I am running below average, but not much below.) By the end of this year, they say, there will be 1.5 billion cards in use, which is a whole lot of plastic. Then again, the card industry is sending out five billion solicitations a year, most of which are presumably winding up in the trash.

Permalink to this item (posted at 6:26 AM)
7 March 2005
Writing a new chapter

The Glittering Eye takes a dim view of the new bankruptcy-reform measure:

As I see it this bill is an attempt to secure for the credit card issuers, some of the biggest of all contributors to political campaigns, what was formerly unsecured credit and reduce their risks.

I don't have any problem with credit card companies making money. And I do think that people should be responsible for their debts. But there's a simple solution to reducing the exposure of the credit card issuing companies: stop giving unsecured credit. I do have a problem with the credit industry improving their bottom lines by having the government do the heavy lifting for them. They knew what the rules were when they issued cards to people who couldn't pay.

With literally billions of card offers every year, you have to figure that not everyone who replies is going to have a credit score in the 800s. And personal bankruptcies haven't been steadily increasing, either; from 2003 to 2004, they actually dropped slightly. I don't think bankruptcy should be viewed as just another personal financial tool, but I don't think it should be redefined purely for the benefit of the creditors, either.

(Disclosure: I went through a Chapter 7 in the early 1980s, though the amount I had written off was less than the amount I wound up paying back.)

Permalink to this item (posted at 6:31 AM)
Coming full circle

Northern Virginia credit-card giant Capital One is paying $5.3 billion for Louisiana-based Hibernia Corp., giving them a retail presence they didn't have before.

Oh, wait, they did. Capital One was spun off from Richmond's Signet Bank in 1995; Signet was absorbed by First Union two years later.

There is truly no new thing under the sun, or in your wallet.

Permalink to this item (posted at 1:43 PM)
28 March 2005
Without scrambling the nest egg

New rules for 401(k) accounts kick in today. Under the previous terms, if you left a job and had less than $5,000 in your 401(k), the employer would cut you a check for the proceeds, less 20 percent for taxes, unless you opened an IRA and rolled the 401(k) balance into it. (And, of course, if you kept the money, you'd have to report it as ordinary income and pay income tax on it.)

Today, if you have at least $1,000, the employer must set up an IRA on your behalf, and you have the option of leaving balances over $5,000 in the original 401(k) even though you don't work there anymore.

The idea, of course, is to keep you saving toward retirement: about 70 percent of employees changing jobs take the cash and run, and nearly half of all 401(k) accounts contain $10,000 or less.

Permalink to this item (posted at 7:36 AM)
9 April 2005
Squint city

The Big Bank that bought the Not-So-Big Bank where I keep my pennies is being slowly (and, from the looks of things, painfully) absorbed by a Bigger Bank, and the results so far have been mixed.

An example: this month's statement, which contains the following announcement:


Well, yes and no. The format is better-organized than before for instance, withdrawals are now grouped by type (checks, ATM, online payments, others) but except for the headings, the whole thing is rendered in some approximation of Avant Garde Gothic Extra Light that's so narrow it barely manages to make it onto the page, making it difficult for geezers like me to read.

And one other thing: my original six-digit (!) account number, which previously sprouted three leading zeroes to fit it into a nine-digit matrix, has now been stretched all the way to fifteen digits: nine zeroes and the original six digits. I suppose, though, it could be worse; at least I can remember this, assuming I don't lose count somewhere in that string of ciphers.

Permalink to this item (posted at 10:00 AM)
20 April 2005
The 700 club

R. Alex turned up this list of average credit ratings in the top 20 US cities, and he's scratching around for a reason why Minneapolis debtors score 50 points higher than their counterparts in Dallas. "Late payments," says an Experian analyst, but why would there be such a substantial difference in payment history at the opposite ends of I-35? The bottom three Dallas, Houston, and Phoenix have lots of Latinos, not all of whom are here legally, but surely that isn't the primary factor.

(No, I haven't looked at my score since I bought the house, and I don't remember what it was then, although I'm sure it wasn't over 700.)

Permalink to this item (posted at 8:34 PM)
2 May 2005
It wasn't even in the catalog

Two buyout firms Texas Pacific Group and Warburg Pincus LLC will acquire the Dallas-based Neiman Marcus department-store chain for $100 a share, about $5.1 billion.

Neiman operates 37 full-line stores, 35 under its own name; the firm also owns two Bergdorf Goodman stores in New York (who knew Bergdorf's was still around?), the Last Call clearance outlets, and mail-order house The Horchow Collection.

The success of Neiman Marcus, say analysts, is due to its continued emphasis on high-end products: there is no push to expand to the "near-luxury" market. Neiman's average customer is a woman 45 to 65 with a median annual income of $285,000.

Neiman Marcus operates (of course) zero stores in Oklahoma.

Permalink to this item (posted at 7:32 AM)
5 May 2005
Striking fear into the Fourteenth Floor

Kirk Kerkorian, last seen in Detroit complaining about the Daimler-Benz/Chrysler merger and how it had cost him mucho dollars, is now seeking to buy up to 9 percent of GM.

What are the chances that Kerkorian will sit back and clip coupons? Next to nil. I mean, this is the man who bought Metro-Goldwyn-Mayer in 1969, sold it in 1986 (to Ted Turner), bought it back before the year was out, sold it again in 1990, bought it back once more in 1996, and finally unloaded it on Sony this year. Obviously GM is far larger than MGM ever was, but Kerkorian is not at all cowed by the General's sheer size. Rick Wagoner, GM chairman, must be wondering what he did to deserve this.

Permalink to this item (posted at 6:31 AM)
22 May 2005
Bowing to the inevitable

When's the last time you schlepped along a book full of traveler's checks?

Right. Same here. So American Express, which used to make a ton of money off them, has come up with Plan B: the Travelers Cheque Card, a reloadable debit card that's available in multiple currencies (dollars, euros, sterling) and has the traditional Amex within-24-hours replaceability. The initial load is $300 ($14.95 fee); you can store up to $2750 on the Card, and reloading ($100 minimum, $5 fee) can be done through a standard Amex card or a debit Visa or MasterCard over the phone. And if it is stolen, the thief won't have any access to your bank or credit-card accounts, a distinct advantage.

Permalink to this item (posted at 8:30 PM)
24 May 2005
The color of your cards

From the "I did not know that" department: A New York survey firm has found that Latino and African-American households tend to carry more credit-card debt than their white counterparts, and the gap is slowly widening.

Are there cultural factors at work here, or is it simply a reflection of relative wealth? (Keep in mind that I'm doing my part for egalitarianism by carrying a debt load that would frighten two or three families of any ethnicity.)

Permalink to this item (posted at 8:03 AM)
2 June 2005
Can schizophrenics claim two exemptions?

Back in the day, I did some spring moonlighting for the Block brothers mostly H., as no one could remember ever even seeing R. and I remembered that bribes were considered ordinary income, and that gambling losses were deductible only to the extent of the winnings you reported as income. But this provision is new to me:

Stolen property. If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner.

And is the owner allowed depreciation for the period in which he is deprived of its use? The mind boggles.

(Via Jacqueline Passey.)

Permalink to this item (posted at 6:26 AM)
6 June 2005
We want some plastic

Washington Mutual, the nation's largest S&L, has announced the acquisition of Providian Financial, one of the top ten card issuers, for $6.45 billion.

Providian is profitable these days, after a near-death experience brought on by massive defaults among its largely-subprime customer base and the company's own manipulation of payments to maximize late fees, which drew lawsuits. Forced into a corner, Providian shed most of its lower-quality accounts; they have also entered into partnerships with eBay and PayPal.

Washington Mutual, perhaps mindful that it has no experience running a credit-card operation, plans to leave the Providian apparatus largely in place; layoffs once the deal closes are unlikely.

Analysts are expecting more mergers in Plasticland, with huge MBNA and less-huge Metris believed to be in play.

Permalink to this item (posted at 3:30 PM)
15 June 2005
Not to mention your account number

The Bank One transition to Chase is more or less complete, and I haven't seen any outdated signage since the late-April switchover. This leaves Bank 2, in the Reno/Meridian area, as the lowest-numbered bank in town.

The highest-numbered bank? This would be Bank 7, which is taking over the old Guarantee State Bank near 63rd and Western.

There used to be a Bank IV in Wichita, successor to the Fourth National Bank, which was acquired by NationsBank, which is now Bank of America. If I remember correctly, Bank IV at some point bought the Fourth National Bank of Tulsa.

Still, in terms of numerical names, we're pikers next to Ohio, which has the wondrously-named Fifth Third Bank.

Permalink to this item (posted at 6:19 AM)
30 June 2005
Plastic consolidation

MBNA has been the nation's largest standalone (i.e., not connected to an individual full-service bank) credit-card issuer for some time; its $35-billion absorption into Bank of America will position B of A as the largest issuer of plastic, period, ahead of the Chase/Bank One combine.

In one way, at least, it's a good fit; Bank of America issues primarily Visa cards, while MBNA has more MasterCard (and, lately, American Express) cardholders.

With Providian now off the market, this leaves Capital One as the only merger target among the Top 10 card issuers, who now control about 87 percent of the nation's credit-card market.

And there will be wailing and gnashing of teeth in Delaware, where MBNA is the largest single private employer, but I don't think it will be that much of a hit; since basically MBNA people will be running the combined show MBNA CEO Bruce Hammonds will be in charge, and card operations will be centralized in Wilmington I'd expect that most of the 6,000 or so expected layoffs will come from the B of A side.

Permalink to this item (posted at 11:13 AM)
21 July 2005
Automatic theft machines

Campus police at UT Austin have called attention to a spiffy but nonetheless heinous means of ripping off a bank's ATM customers.

Two gadgets are affixed to the machine: a replacement for the card reader (which just snaps over the standard slot), and a leaflet holder which carries a surreptitious video camera. You stick in your card, the bogus reader picks up the information, and the camera records you keying in your PIN; after that, you can kiss your money goodbye.

I haven't seen anything like this up here. At least, I don't think I have.

(Via McGehee.)

Permalink to this item (posted at 12:45 PM)
7 August 2005
Inside the enclosed retail compounds

I hate to go to the mall, generally: part of this dislike is sheer laziness, and part of it is the nagging of the conscience, budget division, along the lines of "Do you really need this?" There's even some anxiety in the mix. But a growing factor is the increasing tendency of stores to throw gee-whiz stuff at you that does not in any way enhance the shopping experience, as Andrea Harris explains:

What ever happened to thinking of the comfort of the customer as well as enticing his attention and getting him to open his wallet? It's not been in evidence in any retail conglomeration for years now. From the endless aisles in "super" stores where the thing wanted is usually teetering on the top shelf and there is never an attendant in sight to the malls with their huge escalators going up into space, their atriums floored with tile slippery from the water from the fancy ten-foot fountain (but also sticky with the spills from the ice cream of thousands of tots whose mothers brought them to scream and run around in the "safe" indoors of the mall, so when you slip and fall in the water spill your ass sticks to the floor where you landed in the ice cream slick), their glass-walled elevators that offer sharp-edged metal railings that are one milimeter out from the wall as "handholds" that you can't grasp without cutting your fingers, and with those walkways on the upper floors across the lower atrium areas that are railed on either side by a couple of narrow, flimsy-looking brass rails and are of course floored by more slippery tile, shopping in America has become less and less of a pleasure and more of an obstacle course, as if to make shoppers pay in more than money for their purchases.

Not to mention the tendency in individual stores to stack unshelved items at the end of the aisle, thereby creating a blind spot the size of a grocery cart, and the now-firmly-established ratio of 2.4 checkout lanes for each actual checkout clerk.

If Amazon.com could deliver fresh vegetables but let's not get our hopes up.

Permalink to this item (posted at 7:29 PM)
14 August 2005
Your 15 percent is up

A few days back, Steven A. Shaw argued in The New York Times that restaurants should abolish the practice of tipping:

Customers believe in tipping because they think it makes economic sense. "Waiters know that they won't get paid if they don't do a good job," is how most advocates of the system (meaning most everybody in America) would put it. To be sure, this is a seductive, apparently rational statement about economic theory, but it appears to have little applicability to the real world of restaurants.

Michael Lynn, an associate professor of consumer behavior and marketing at Cornell's School of Hotel Administration, has conducted dozens of studies of tipping and has concluded that consumers' assessments of the quality of service correlate weakly to the amount they tip.

Rather, customers are likely to tip more in response to servers touching them lightly and crouching next to the table to make conversation than to how often their water glass is refilled in other words, customers tip more when they like the server, not when the service is good. (Mr. Lynn's studies also indicate that male customers increase their tips for female servers while female customers increase their tips for male servers.)

Isn't it just possible that we'll like the server if the service is, by our reckoning, "good"?

A response from a server, posted at waiterrant.net:

While it might be true the patron's tip is based on how much they personally like their server, Shaw's position would remove the customer's monetary feedback entirely. Plus, water always seeks its own level and greed is rampant among restaurant owners. Sensing profit, restaurateurs will establish a service charge but start paying servers a flat hourly rate, thereby pocketing the difference. This obviates the consumer's ability to reward the server. You'll understand what I mean if you've ever shelled it out for a wedding reception. The establishment charges an 18% service charge on top of the bill but only pays its waiter between $10-$15 dollars an hour. Where does the rest of that money go? Right into the owner's pocket! Now you might say that's the way it works but hold on! There's a restaurant in NYC that adds a "service charge" of 18% for parties of six or more. The waiters pocket that money. However, when the Christmas season arrives and the restaurant starts booking multi-thousand dollar office parties they switch the servers to a flat hourly rate and keep the difference. That's cynical and greedy. And that's exactly what will happen if every restaurant in America adopts a service charge.

Far from improving a customer's dining experience the service charge will ruin it. Why? Because if waiters are making an hourly wage they won't care what kind of service they give. And, since waiters will definitely be undercompensated they won't be happy and what will that do to the "emotional connection" patrons have with their server? It will destroy it making customers miserable and causing experienced servers to leave the business in droves. The best way for a restaurant to make a waiter loyal and happy is to pay him or her well through tipping. In this age of corporate layoffs and CEO overcompensation do you think any young person (the usual age cohort for waiters) buys that nonsense about long term compensation after they saw their parents' loyalty to companies like Enron and Tyco so richly rewarded? They don't and they want their money now. Why? Because a lot of us can take care of ourselves.

I'm not sure I believe that service will go straight to hell if the wait staff is put on a straight wage, or on salary, but I'm more inclined to accept this version of the story. And as an experienced eBay buyer (over 300 auctions, nearly 200 won), I'm a firm believer in immediate feedback.

(For those who care: My standard tip is between 20 and 25 percent, rounded to the nearest 50 cents. Substandard service earns the canonical 15 percent. Service beyond the call of duty opens up the wallet considerably.)

Permalink to this item (posted at 12:35 PM)
19 September 2005
Not to mention toil and trouble

In years gone by, if you ran up late fees on your credit cards, it might actually be impossible ever to pay off a balance if you stuck to the minimum required payment, which is one reason why the Feds this year leaned on big banks to increase the minimum monthly payments on credit-card debt. It was widely reported that the minimums would in fact double, from the common industry practice of 2 percent of the balance, to a full 4 percent. This is not necessarily true, although they will certainly increase a bit; the goal is to get these things paid off within seven to ten years even at the minimum-payment level.

I have now seen the first of the new formulas, from one of the bigger banks, and it's interesting. The new minimum payment, starting December 2005, will be 1 percent of the balance, plus any finance charges incurred during the month, plus any late fees, rounded down to the nearest dollar. The example they gave: a balance of $3500 would produce a payment of $35 (1 percent) plus $49.55 (finance charges at some unspecified interest rate), or $84 when rounded down. If there are any late fees, they go on top. Under this bank's old system, the minimum payment would have been $64. (There is a minimum of $15 regardless, and a cap of 5 percent of the balance.)

The timing of this, of course, is perfect, what with the new rules for bankruptcy kicking in.

Permalink to this item (posted at 6:03 PM)
24 September 2005
Pennies from wherever

Like rather a lot of people, I have a canister in which I accumulate pennies; it holds about $6, and when it's full I schlep it to the supermarket, dump it into the Coinstar box, and receive a slip which I can then hand to the cashier in exchange for $5.34.

I'd heard that Coinstar was going to issue Amazon.com gift certificates $6 worth for my 600 pennies instead of $5.34 and this seems extremely cool, but I have to admit I hadn't thought it out quite as far as Steph Mineart has:

[I]f you wanted to go completely off the grid, you could use your Amazon gift card to set up an Amazon account and pay, without ever entering personally identifying information, AND Coinstar will accept paper money and convert it to the Amazon card. So if you were on the run from the law, and you wanted to send someone a gift from Amazon and have it shipped to them, you could put your cash into a Coinstar machine, get a gift certificate, set up an anonymous Amazon account, and make purchases.

I don't expect to be on the lam, so to speak, any time soon, but this strikes me as downright ingenious, and, best of all, convenient.

Permalink to this item (posted at 10:38 PM)
14 October 2005
We have ways of making you save

The American savings rate is somewhere between not much and nil, which has prompted a couple of card issuers to introduce cards that put some money aside.

The simpler of the two is the American Express One card, which has a typical 1-percent rewards package but which takes those rewards and deposits them in a savings account in your name. (Currently it's paying 3.15 percent.) You can, of course, deposit funds in the account on your own. Amex stakes you to $25 to open the account, and waives the $35 annual fee the first year.

If you have a debit card from Bank of America, you have a new option called Keep the Change, in which debit-card transactions are rounded up to the next higher dollar and the overage is deposited to savings. (If you spent, say, $82.45, B of A will debit your checking account $83 and drop 55 cents in savings.) As an incentive, B of A will match the savings deposits for the first 90 days, and kick in five percent a year thereafter (maximum $250).

Permalink to this item (posted at 6:22 AM)
15 October 2005
Letter to an overly-avaricious bank

Twenty-two point four nine percent? Not with me, you don't.

The proposed new terms of the Cardmember Agreement are rejected herewith; please cancel this account. Any existing balance will be paid according to the terms as they currently exist.

It's been a good ten years. I was looking forward to ten more, but not at this price.

Yours sincerely,


Charles G. Hill

Permalink to this item (posted at 11:40 AM)
17 October 2005
Your new doubled mininum payment

As projected here before, it isn't, except in certain odd combinations of balance, fees and interest rate.

Most of the Big Boys are phasing in their new monthly minimums. I quoted one last month, and the others are looking very much like it. A sample, received this weekend:

The Minimum Payment Due will be the greater of either $10 or the total of the following amounts: (a) One percent (1%) of the New Balance on your Account, as shown on your monthly Statement, after first subtracting current cycle Finance Charges and Late Payment Fees; (b) current cycle Finance Charges other than Cash Advance Fees; (c) any Late Payment Fee charged in the current Billing Cycle; and (d) the greater of either any overlimit amounts (less any current cycle Late Fee provided that this excluded Late Fee will not exceed the overlimit amount) of any past due amounts.

After dejargonization, this is essentially the same rule as at that other bank, except for the $10 floor instead of $15.

The bank whose card I dumped this weekend is slightly different: it's either one percent plus finance charges and fees, or two percent overall, whichever be greater. Incidentally, this did not play a role in my decision to cancel that card.

Permalink to this item (posted at 3:50 AM)
26 October 2005
Thieves getting nervy

Jan reports on a new scam to separate you from your credit line:

The caller then says, "I need to verify you are in possession of your card". He'll ask you to "turn your card over and look for some numbers". There are 7 numbers; the first 4 are part of your card number, the next 3 are the security numbers that verify you are the possessor of the card. These are the numbers you sometimes use to make Internet purchases to prove you have the card. The caller will ask you to read the 3 numbers to him. After you tell the caller the 3 numbers, he'll say, "That is correct, I just needed to verify that the card has not been lost or stolen, and that you still have your card. Do you have any other questions?" After you say No, the caller then thanks you and states, "Don't hesitate to call back if you do", and hangs up.

You actually say very little, and they never ask for or tell you the card number. But after we were called on Wednesday, we called back within 20 minutes to ask a question. Are we glad we did! The REAL VISA Security Department told us it was a scam and in the last 15 minutes a new purchase of $497.99 was charged to our card.

Well, not her card, actually; she's just passing on a report.

The CVV is three digits on the back of your Visa, MasterCard or Discover Card, or four digits on the front of your American Express Card. This number is based on the information in the magnetic strip of the card, and cannot be derived from the account number itself; this is why thieves will try to get it out of you, since if they have both the account number and the CVV it will be assumed that they have the actual card and purchases they make will most likely not be questioned. (And if the merchant requires the CVV, as all online merchants really should by now, there's a 1-in-1000 chance of someone guessing it.)

Permalink to this item (posted at 4:16 PM)
7 November 2005
Traveling with plastic

These days, more frequent-flyer miles are earned by credit-card usage than by actually flying. With this in mind, Gary Leff offers suggestions at Marginal Revolution on what cards to carry and how to maximize your take.

(Via Jacqueline Passey.)

Permalink to this item (posted at 9:37 AM)
22 November 2005
What's in your treasury?

The city of Port St. Lucie, Florida is charging the cost of a new freeway interchange on its Visa card.

There's a $6 million limit on the card, which must be paid off monthly. The estimated $24 million price of the road work, once completed, will earn the city $125,000 in reward credits from Bank of America.

Vendors apparently don't mind: they get paid a lot faster than they would otherwise.

(Via Fark)

Permalink to this item (posted at 10:35 AM)
21 December 2005
Another ally for Amex

In the fall of 2004, I reported that American Express and Discover were now free to seek alliances with banks that also issued Visa and/or MasterCard, and that MBNA, since acquired by Bank of America, would be the first financial institution to do so.

Citibank has joined the club: Citi will be issuing American Express cards later this month, and by mid-January will have a full suite of Amex-branded card products.

As with the MBNA Amex products, I suspect these will be of interest mostly to customers who have a working relationship with the institution already, since it's not particularly difficult to get an Amex card from American Express itself.

Update, 7:40 pm: American Express has confirmed that Bank of America, separately from the B of A/MBNA merger, will issue Amex cards of its own.

Permalink to this item (posted at 7:01 AM)
23 December 2005
More absorption

Metris Companies, a major credit-card issuer catering to the less-than-bucks-up market I have one of their titanium cards sitting in a drawer somewhere has been acquired by HSBC, which is a Pacific Rim operation (Hongkong Shanghai Banking Corp.) which also owns, among other things, the old Household Finance Company, its one-time rival Beneficial, and what used to be called Marine Midland Bank up in Buffalo.

Metris has a customer-service center in Tulsa, one reason I kept this account open; I expect that office to be closed shortly.

Permalink to this item (posted at 7:00 AM)
2 January 2006
Naming names

Regular readers will recall my occasional differences with my health-insurance provider, identified as "CFI Care," usually with a disclaimer: "Not its real initials." Although it may be cute, it's just a substitute, and I've often wondered if maybe I'm doing a disservice to the general public by not revealing its real initials, even as I insulate myself from the slings and arrows of outrageous corporate lawyers.

Steve Lopez of the Los Angeles Times has run into a similar situation. Someone swiped his debit card; his bank decided that the $2000 or so that was siphoned out of his account constituted legitimate withdrawals and will not compensate him. Here's what he said:

The reason I'm not divulging my bank's name as much as I would love to is that it wouldn't be right for me to use the influence of the newspaper to get my money back. The average Joe can't do that. And besides, I want to see if in the end, my bank (a large national operation that will no longer have my business when this is over) does the right thing for the right reasons.

I have a slightly better soapbox than Joe does, and I'm usually reticent about spilling the beans unless I am really, really ticked off. (The loss of two grand would qualify as at least two, maybe three reallys.)

The Consumerist, where I found this, is wrestling with the same question. Suggestions from the field will be welcomed.

Permalink to this item (posted at 2:02 PM)
5 January 2006
Selective editing

It's no particular secret that you can block most of those unsolicited credit-card offers with a phone call: 888-5-OPT-OUT.

Unfortunately, what I want is to block one particular card issuer who has cheesed me off more often than I'm willing to endure, without necessarily killing the flow from other issuers who might have favorable deals. I suppose I'm going to have to write them and complain.

At some point, inasmuch as I've overhauled my plastic portfolio twice in the last six years, I ought to sit down and write a summary of my experiences with the Big Boys in the industry which is almost all of them now.

Permalink to this item (posted at 6:21 AM)
7 January 2006
Bank shots

In response to unprecedented demand, I have compiled a list of my dealings with ten credit-card issuers, some of which worked out very well, and some of which didn't work out at all. When it got beyond 7k, I figured it was Vent material, and so it wound up as Vent #468.

As always with such things, past performance is no guarantee of well, much of anything, really.

Permalink to this item (posted at 9:33 AM)
17 January 2006
A hull of an improvement

Today there are gift cards, phone cards, all sorts of cards that are used once, maybe a few times at most, and then thrown away, adding a few inches to the mountain at your local landfill and, if incinerated, yielding up some yummy toxic wastes.

Enter Arthur Blank and Company, which has a new card design that doesn't clutter up the place indefinitely or give off that dreaded burned-PVC vapor. It's made from corn, and it's specifically designed for minimal environmental impact.

Arthur Blank, based in the West Roxbury section of Boston, says it can produce these cards for only 10 percent more than the standard plastic stuff, and expects to convert about half its existing gift-card business to the new CornCard.

Permalink to this item (posted at 11:02 AM)
1 February 2006
Brother, can you spare a twenty?

According to the old joke, it's called "take-home" pay because you can't afford to go anywhere else with it.

ACNielsen research reports that of all the people they surveyed, the Americans and the Portuguese are the most cash-strapped; twenty-two percent of their US survey respondents reported that once the bills are paid, there's nothing left.

Then again, it was 28 percent last year, so at least some folks are doing better now.

And there's this:

[O]f U.S. consumers who do have spare cash, their first priority for that money is debt repayment (42%). This number has increased nine percentage points since October 2004.

I am slowly but semi-surely whittling down that mountain of debt, though an occasional Pick 3 winner would help.

Permalink to this item (posted at 6:19 AM)
8 February 2006
Now: slower refunds!

It's always seemed at least slightly perverse to me that the American taxpayer, by and large, prefers to overpay (via withholding) his taxes during the year and then draw a fat refund the next spring. Of course, if he had to pay the entire sum at one shot, he'd be very, very unhappy, which is one reason why it's simply not done. (Another, more subtle, is that it tends to obscure the sheer vastness of said sum.)

Earnest Pettie, the Idea Man, is undoubtedly aware that the amount of the fat refund constitutes a de facto interest-free loan from taxpayer to government; taking this into account, and noting that Americans, as a whole, don't save very much, he proposes a system to offset both these issues:

Giving Americans tax refunds on debit cards could convince us to start saving again. Imagine that the amount of the tax refund given a citizen were considered by the government to be a bond, accruing interest for the recipient for as long as the government were allowed to hold onto the money. The recipient would be allowed to spend the money in his account, and as he spends it, there is less available to accrue interest. This would represent an incentive for a recipient not to spend their entire refund, encouraging the recipient to save money, without that person having to go to any trouble (such as the effort required to open a savings account) to start saving. The people who need savings accounts most, the poor, are the ones who least can afford to open them. This could be a huge opportunity to turn those people into savers.

Seems like this would get some extra mileage out of the Earned Income Credit, too.

Who loses? All those firms (including tax-preparation firms) who make loans based upon the expectation of getting their hands on refund checks. I can't say I'd shed many tears for them.

(Via BatesLine.)

Permalink to this item (posted at 9:11 AM)
17 February 2006
A new way to empty your checking account

Debit-card usage is on the rise, and Discover, wanting a piece of that action, has now decided to issue a Discover Debit Card, which will be available in the usual two flavors: individual and business. This will come in handy at Sam's Club and when renewing an Oklahoma auto tag.

The first actual bank to issue the Discover Debit Card, other than Discover's own bank in Delaware, will be the Central National Bank of Enid, Oklahoma, which didn't say whether the card would replace its existing Visa Check Card.

Permalink to this item (posted at 10:44 AM)
18 February 2006
New plastic binding

Washington Mutual, the new owner of the Providian credit-card operation, has, like other card issuers, come up with new terms to increase the monthly payments in the interest of greater debt reduction. But WaMu's tactics are different. They're not going to a percentage-plus-new charges system like rival banks, but will vary the percentage based upon the cardholder's interest rate: if you're paying a higher rate, you're also going to pay a higher minimum.

Under the new WaMu scheme, if your Weighted Average APR is less than 12 percent, your monthly minimum is 2 percent of the account balance, period. (In this case, a hundred bucks.) This APR, of course, tends to increase, since payments are applied to the balance at the lower interest rate first. Up to 18 percent, you'd pay 2.5 percent of the balance, and it goes up from there; the poor souls who are paying over 30 percent get to fork out 4 percent each month.

Depending on individual circumstances, this can be either easier or harsher on the customer: for me, it represents no change at all. And unless I'm really in a bind, I never, ever pay just the minimum if I have a balance.

Doing the math: If you owe, for example, $2000 at 14 percent and $3000 on a balance transfer at 8 percent, your Weighted Average APR is ([2000 x .14] + [3000 x .08])/5000 = 10.4 percent.

Permalink to this item (posted at 5:45 PM)
8 March 2006
Member FDIC

Or so Wal-Mart hopes. The retail giant is seeking a new bank charter from Utah officials, and has applied for Federal deposit insurance.

Wal-Mart sought an industrial-bank charter because, says the company, it has no plans to enter the retail banking business; it merely wants to cut its expenses for payment processing.

FDIC has already received nearly two thousand comments on the Wal-Mart application, which has spurred the agency to hold public hearings in Washington and in Kansas City.

Relatives of Sam Walton control Arkansas-based Arvest Bank, which has some Oklahoma locations; the new Utah-based bank would have no connections to Arvest.

I don't recall this much fuss when Nordstrom and Target acquired banks for just about the same reasons.

(Via Interested-Participant.)

Permalink to this item (posted at 6:20 AM)
14 March 2006
Gimme a C!

The Big Three credit bureaus Equifax, Experian and TransUnion have decided that there should be only one system for determining credit scores, and are rolling out something called VantageScore.

Under VS, all three bureaus will use the same methodology to determine a person's credit score. Scores will range from 501 to 990 and are not strictly comparable to present-day FICO and similar scores. And each range will be assigned an alpha grade: 900s will get an A, 500s an F.

What won't change under the new system: the method of detecting and fixing incorrect information in a person's file, which will remain rather cumbersome.

Permalink to this item (posted at 2:07 PM)
20 March 2006
Cross the border, buy a house

There's a great deal of talk about how much illegal immigrants suck out of the US economy; there's rather a bit less about how much they put in. The Oklahoman has a piece this morning on mortgage loans made to the undocumented keyed to their Individual Taxpayer Identification Numbers instead of the Social Security numbers they don't have.

In a sidebar, the head of a mortgage company who makes lots of such loans notes that it's not the easiest thing in the world to get one: typically, you have to have been here 10 years or more and must have filed tax returns for the past two years using your ITIN. And the interest rate is stiff: a local couple described in the article is paying 9.25 percent on a thirty-year fixed-rate loan, about three percentage points above the rate offered to more conventional customers with presumably better credit.

Still, these are people who would be solid citizens if they were, you know, citizens, and other than the standard "But they're here illegally!" complaint, I can't think of any reason why they shouldn't be allowed to buy a house. And if the INS can't enforce its own rules, they can hardly expect a bank to do it for them, especially when another branch of the government the FDIC expects that bank to make a substantial effort to serve low- and medium-income residents of its community.

Permalink to this item (posted at 10:48 AM)
23 March 2006
Don't call us, we'll call you

This is one of those ideas that sounds wonderful, but oh, the horror when something goes wrong: PayPal via cell phone.

Still, I have to give it props for sheer spiffiness, even as I shrink away from it in fear.

Permalink to this item (posted at 1:23 PM)
27 March 2006
Hers and hers

Olivia, which arranges vacation travel and other neat stuff for lesbians, has, not too surprisingly, introduced its own branded Visa card.

This is a rewards card, and from the looks of it better than average: while at bottom it's primarily MBNA's WorldPoints program, those points can be swapped for Olivia Dollars, which can be used toward Olivia's own travel and cruise packages.

CardTrak's headline on this reads "Lesbian Card," which for some reason makes me giggle: I can imagine someone whipping it out and announcing, "Yeah, I'm a card-carrying lesbian." Then again, I am not known for incredible breadth and/or depth of imagination.

Permalink to this item (posted at 11:25 AM)
30 March 2006
The blind leading the blend

I wrote a lot of checks this week.

This is not because I'm particulary fond of writing checks, but my standard bill-paying routine calls for the bills to be paid on the weekend following receipt, and this past weekend was the moment selected to phase out the Bank One online-payment system in favor of Chase's, and I had a feeling that the process might be something less than seamless early on.

Although I didn't imagine it would be this bad:

I told them that I had previously been downloading my transactions from within Quicken and using Quicken to access the bill payment service. The response from the outsourced, offshore customer service agent: "Yes, can you tell me ma'am, did you connect by going to the Bank One site, or directly from within Quicken?" Then they gave me a different phone number to call. Repeat three times. Yes, three more times, I told them how I previously used Quicken and that it didn't work that way anymore, three more times I was asked to tell them EXACTLY what I had just told them, and three more times, I was given another phone number to another outsourced, offshore customer service agent.

At the fourth number, I found someone who told me that I needed to go through the "Activate Quicken or Money link" which requires your electronic signature on an agreement to pay $9.95/month and your choice of which account you want them to take the money out of. Not to worry, I was told. Chase charges its historical customers for this service, but since Bank One customers had never been charged, it would be free for me. Even though I was agreeing online that they could charge me. Their systems should know automatically not to charge me, but she'll put a permanent record on my account, so that if I should accidentally be charged, I can just call them and they will reverse the charges. Right.

And eventually, I have to assume, they will be sending out amendments to the account terms which will enable them to start charging everyone.

But this is the bottom line:

I've had my oldest account with them for 14 years. I'm sure that changing banks is a logistical nightmare. But, this charging legacy Chase customers and not charging legacy Bank One customers obviously can't last. If they charge for this service, I will seriously take my money and run.

My current account was opened in 1975, two or three mergers ago. And I (see above) am obviously a creature of habit. Still, my part of town is simply awash in banks, and not all of them, when something goes awry, require you to call someone in the Eastern Hemisphere who's been given a stack of scripts.

Update: Chase has a fix for this specific issue.

Permalink to this item (posted at 9:50 AM)
10 April 2006
Someone to watch over me

A poll by RSA Security reports that more than 90 percent of American bank customers would like those banks to scrutinize incoming transactions for potential fraud, and 60 percent would like to be notified when something looks suspicious.

For what it's worth, I spoke to a MasterCard issuer this weekend, after they reported they'd spotted what they considered to be anomalies. They thought it was odd that someone would be paying for two ISPs; I explained my belt-and-suspenders approach to keeping myself online. And they found a transaction for $1 with the wrong expiration date, about which I knew nothing, and which they had duly declined. The bank suggested that, if I had concerns, they would cancel the account and send me a new card; after being assured that my reward points would remain intact, I agreed.

This is the second time I've canceled a card for security reasons. The first was five years ago, in connection with a hacking incident at the Web host I was using at the time.

I admit to a certain amount of "What do you care what I spend my money on?" But under the circumstances, I think the bank did the Right Thing in bringing their concerns to my attention, and I suspect the respondents to RSA's poll would agree.

(Via The Consumerist.)

Permalink to this item (posted at 9:00 AM)
11 April 2006
Code comfort

All your major credit cards carry a Card Security Code, which is usually three digits tucked away on the back. (American Express, always different, has four digits on the front.) Last year our friendly Web host explained why they weren't much good:

The problem is, about 99.9% of all stolen credit cards used for purchasing things (like say, Web Hosting!) online are gleaned through the use of "phishing" scams. Those spams you get that claim to be from Paypal or Ebay or Wells Fargo or Bank of America. And, the Nigerians and Vietnamese not being total buffoons, they ask for the CSC code for your credit card too! So basically, anybody signing up for stuff online with a stolen credit card is either going to have the physical card (and therefore the CSC code), or will have the CSC code (and therefore have the CSC code).

In theory, using the CSC codes will stop that oh-so-popular case of credit card fraud where somebody goes searching through a trash can for receipts with people's credit card numbers on it. Except, in practice these days just about all stores mark out the first 12 digits of your credit card number on their receipts.

In theory, using the CSC codes will stop that even-more-so-popular case of credit card fraud where somebody "hacks" into a merchant's database of stored credit card numbers and compromises a bajillion cards all at once. Despite this being a very infrequent event compared to phishing scams, even when this does CSC codes don't help at all.

Why not? Well, think about it. Why is a merchant keeping all these bajillion cards in the first place? The only good reason is to be able to automatically rebill your credit card without you re-entering it every time. And that implies that they either don't need to use your CSC code to charge your card (which is true ... they're optional), or else they also have to store your CSC code ... so it'll get stolen too!

Except that "optional" is no longer an option:

The reason we're now requiring CSC codes on all credit card transactions on our site is actually pretty simple ... Discover required us to!

And I suspect the Other Guys will follow in short order.

Does this mean they'll invent a new code, perhaps on the edge of the card?

Permalink to this item (posted at 9:10 AM)
15 April 2006
Not from around here, are you?

Yet another disadvantage of Humongous Monolithic Bankage Corporation (Member FDIC), as discovered by CT:

So yesterday, I dropped into a Bank of America branch to deposit a check. I filled out the deposit slip, waited in line, and then handed the teller the slip and the check.

The snag: I didn't use the right type of deposit slip. I had to use the out-of-state accounts deposit slip.

But, I pointed out: The address on my account is in New York.

Doesn't matter, she said. The account was opened in Florida, and as such, it's tagged as a Florida account now and forevermore, regardless of the accountholder's current residency. You could always close an account and open a new one in your new state of residence, but she said it really wasn't worth the hassle.

Each state having its own banking laws, I think it's a safe bet that most of your megabanks, which were generally assembled by the purchase of smaller banks along the way, will have similarly preposterous rules lurking behind the glass. (My Oklahoma account in a New York bank which is probably incorporated in Delaware anyway is apparently, judging by its statement, serviced from Baton Rouge.)

Permalink to this item (posted at 11:00 AM)
25 April 2006

I've been through some of this:

As usual whenever I purchase something that actually has use as well as a certain value (as opposed to all the other frivolous doodads I'm always spending too much money on), I feel as if I've taken out a third mortgage or something. It would be nice to, not be fabulously wealthy, but to just be well-off enough that I didn't feel pangs of unease and guilt every time I spent money on something I'd been saving for for ages. I wonder if I'll ever have the courage to buy a house, or even a car ...

I know from this. People in general and my daughter in particular were nagging me to get out of the CrappiFlat" and into something I could actually own, and I always fought it off with "I can't afford it, at least until the car's paid off." And I was able to sustain this attitude until water started coming through the ceiling and it occurred to me that I lived on the ground floor.

There's a variant which I call Charger's Remorse. I got a hit of it after pulling out the Visa to pay for a new PC. It's not like I maxed out the darn thing as of this morning, before I post this month's payment, I have available credit of $8,500 on this card but while I was looking over the bills last night, I went through a brief period of "Oh, dear God, what have I done?" And what's amazing is that the PC purchase hasn't even been billed yet; this is anticipatory grief.

That said, I won't even bat an eye blowing three grand on this summer's World Tour, probably because it's in forty- or fifty- or hundred-dollar increments rather than one ginormous transaction.

Permalink to this item (posted at 7:42 AM)
Red is the new platinum

Target already has a Red card which kicks in a percentage of your spending to a school of your choice.

Now American Express is getting into the Red act, with a card that donates a portion of your spending to the Global Fund to Fight AIDS, Tuberculosis and Malaria.

This qualfies as a Good Cause, and Amex deserves a cheer and a half, maybe two, for coming up with this program. Why not three cheers? This is why:

Every credit card offer has some kind of deal where you get free things or money back, and a good way to choose a credit card is to calculate the exact percentage cash back that you are getting. For example, if you get one Air Mile for every dollar you spend, and it costs 25,000 Air Miles to buy a domestic flight in the United States (say, $400-500 max), then you're effectively getting between 1.6% and 2.0% off of your purchases. ($400/$25000)

In my experience, most credit cards offer effective discounts of 2-3%. The RED card gives 1-1.25% of your purchase value to the Global Fund, and there are no other discounts. Two things are eminently clear: (1) American Express is not hurting at all from this, as they are offering a lower implicit discount than that on their other cards; and (2) Your donation is real, since that 1% going to the Global Fund would eventually be cash in your pocket if you used any other card.

You are making a donation to the Global Fund every time you use the RED card. So why don't you get a receipt for a tax deductible charitable donation? Because American Express is getting it. Which makes the RED card little more than a way for American Express to get money out of you, foolish consumer.

Which is no surprise, really: whatever my old high school gets from my Target card isn't deductible either. And if you don't itemize deductions, this probably doesn't matter. Still, if you're wanting to get maximum value for your dollar, you should donate directly to the Global Fund and charge that donation to Amex RED.

(Via The Consumerist, more cynical than I.)

Permalink to this item (posted at 2:15 PM)
28 April 2006
Such a deal, someplace

During May, your ticket to the museum is on Bank of America, maybe. Ground rules:

  • All the participating museums are located in nine Northeastern states;

  • You must present your B of A or MBNA (now a B of A subsidiary) credit card and a photo ID;

  • Individual museums may exclude special events, and fundraisers are not included.

Except for the minor detail that I won't be in the Northeast during May, or probably any time in 2006, I'd definitely be up to taking advantage of this.

Permalink to this item (posted at 11:39 AM)
28 May 2006
From the Screwing for Chastity Department

The letter opens:

Call 1-888-[redacted] and be on your way to becoming debt-free!

And how do I do this? Why, by borrowing a ton of money, of course.

The terms aren't particularly arduous, although they're careful to quote only the numbers for those folks who qualify for 7.49% APR. (At least it's a fixed rate, assuming you keep your nose clean.) Still, based on their table, and presuming that they'd grant me this rate, which is not impossible inasmuch as they don't charge me much more than that for a MasterCard, borrowing, say, 30k would cost me somewhere around $480 a month, which is more than my mortgage payment (P&I, anyway), and there's a transaction fee of 3%, which is nine hundred bucks, which technically doesn't figure into the APR.

All that and it would still take seven years to pay it off.

Permalink to this item (posted at 7:00 PM)
17 June 2006
Keep yer stinkin' plastic

Because, you know, the landfills were just dying for more paper: in the first quarter of 2006, Americans found 1.7 billion credit-card solicitations in their mailboxes, up from 1.4 billion in the first quarter of 2005.

It's not hard to see why, either: the response rate is falling, from 1.2 percent eight years ago to 0.2 percent today. Out of every 500 "You're pre-selected!" pitches, 499 wind up in the trash.

You can, of course, ask to be left off the list, and it might even work.

Permalink to this item (posted at 1:24 PM)
9 August 2006
Plus tax where required

We've all seen that phrase or variations thereof; How to be Websmart is now listing the tax policies of the top 50 online storefronts.

For instance, Overstock.com adds sales tax only for shipment to Utah or Indiana; Target.com adds sales tax in 47 states (the exceptions being Alaska, Hawaii and Vermont). This information is always subject to change, though, so if you stumble upon this in 2009 and Target charged you tax in Brattleboro, it's not my fault or HtbW's.

(Via The Consumerist.)

Permalink to this item (posted at 10:33 AM)
10 August 2006
File under "But of course"

Harley-Davidson common stock is traded on the New York Stock Exchange under the symbol "HDI."

Until next Tuesday, that is, when the company will be changing to the symbol "HOG."

A few other sort-of-appropriate symbols:

  • BID: Sotheby's
  • BUD: Anheuser-Busch
  • DNA: Genentech
  • EAT: Brinker International (owner of Chili's and On the Border restaurants)
  • FUN: Cedar Fair (theme-park operator)
  • LUV: Southwest Airlines (based at Love Field, Dallas)
  • ROCK: Gibraltar Industries
  • SAM: Boston Beer Co.

(Thanks to Interested-Participant.)

Permalink to this item (posted at 8:41 PM)
12 August 2006
The flying fickle finger of Visa

The Bank of America-MBNA marriage has produced offspring: FIA Card Services, which seems to contain mostly MBNA DNA.

Where they came up with "FIA" is beyond me, since it has connotations; I do hope it wasn't Fark.

Permalink to this item (posted at 10:56 AM)
15 August 2006
Besides, people keep stealing the pens

Earlier this year, banks in the UK rolled out a plan called "Chip and PIN", which is intended to reduce payment-card fraud. Customers are issued "smart" cards with an embedded chip and a four-digit number, and instead of signing the slip at the point of purchase, they must enter that number directly into the terminal.

Since most US-issued cards lack the chip only two of my cards are so equipped some American travelers are encountering problems at UK stores. Cards lacking the chip should still be accepted with a signature, according to the proponents, but evidently not all merchants have gotten the message.

Full rollout was 14 February 2006: in the year before, the pilot program produced a 24-percent reduction in fraudulent transactions.

Permalink to this item (posted at 11:32 AM)
30 August 2006
Visualize eighteen percent

Nothing much I can add to this:

Los Angeles-based Conscious Enlightenment and First Hawaiian Bank have launched eight new VISA credit cards. The "Enlightenment VISA Reward Card" allows socially and spiritually conscious businesses and organizations to offer their services and products as part of the rewards program. "Enlightenment Card" members can earn points that can be redeemed at retreats, workshops and classes that are available around the world. Points can also be redeemed for merchandise, gift certificates and much more.

And who are these "socially and spiritually conscious business and organizations"?

Conscious Enlightenment's current group of companies includes: Conscious Choice, Common Ground, and Whole Life Times, YogaMates, Monthly Yoga DVD.com, Organic Media Design, and Golden Bridge Yoga.

They hope to expand the list of participating organizations in the future.

Permalink to this item (posted at 10:59 AM)
1 September 2006
The Pentagon takes interest

So-called "payday-loan" and "cash-advance" places dot the urban landscape: the local Feist Yellow Book has nine pages under "Loans," and while actual banks and traditional finance companies are listed, generally in small print, the big ads are for small-time operations with big-time interest rates. I have no idea how trustworthy this bunch is, but I am not heartened by things like a half-page ad listing four companies who turn out to be at two addresses: each location has two offices, apparently differing only in name.

The Department of Defense has been looking into these joints also; they estimate that 17 percent of military personnel have used these companies for quick loans. And it's not hard to understand why: most of the troops are young and inexperienced in financial matters, and they're not what you'd call especially well-paid: starting pay at grade E-1 (FY 2006) is $1178.10 a month. (This is five and a half times what I made as an E-1 in 1972, but it's still not an enormous sum.)

Defense, therefore, would like to curb this sort of thing, and there's no money for giving the troops a huge raise, so the next-best thing is to cap the interest rates charged by lenders. The example in the AP story: fellow writes $300 check post-dated two weeks, gets $255 cash. I look at this and I think, well, $45 is not that big a finance charge, but then I do the math, and the annual percentage rate is around 400 percent.

The cap sought by the Pentagon is an APR of 36 percent, about what you'd pay on the worst credit cards, and a House/Senate conference committee is considering such a measure. Would such a cap drive these firms out of business? Warren Bolton of The State (in Columbia, SC, home of Fort Jackson) thinks so:

In 2004, the Department of Defense asked states to support 10 key issues that would improve the quality of life for service members. One of the 10 was to prohibit predatory payday lending. So far, 11 states have made changes that outlaw triple-digit interest rates for payday loans: Connecticut, Georgia, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Vermont and West Virginia. "These states have been successful in maintaining strong usury laws and aggressively enforcing those laws," the Pentagon report said.

That's certainly true in North Carolina and Georgia. North Carolina has a 36 percent annual percentage rate usury cap for small loans. In Georgia, lenders can't exceed a 60 percent annual percentage rate. Both those states have shut payday lending down.

Oklahoma legislators introduced two bills this session to cap lending rates to service personnel at 36 percent. Senate Bill 1920, by Daisy Lawler (D-Comanche) and in the House by John Carey (D-Durant) died in the Finance Committee, as did SB 1062, by Mary Easley (D-Tulsa).

The industry itself points out that sometimes the alternatives could be worse:

Payday advance APRs are often lower than customers' alternatives (on the same 2-week term)
  • $100 payday advance with $15 fee = 391% APR
  • $100 bounced check with $48 NSF/merchant fees = 1,251% APR
  • $100 credit card balance with $26 late fee = 678% APR
  • $100 utility bill with $50 late/reconnect fees = 1,304% APR

The problem, though, isn't the one-shot triple-digit APR: it's the spiral of rollover loans that follows when the borrower discovers that he isn't quite caught up just yet.

Still, for all the presumed "predatory" nature of these firms, they pale next to the rent-to-own outfits, the only places in town where you can still buy a low-end PC for $2,000. It's enough to make you yearn for a layaway plan.

Permalink to this item (posted at 10:23 AM)
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