patrick.net

Is that for a plain PIN-based debit transaction, or is that for one of those “signature-based” debit transactions that presumably go through VISA International?

PIN based. I haven't seen sig based for a long time. If you want to ask someone in your neighborhood, try your local immigrant dry cleaner. That's how I found out about the ATM fees. He tries to get his customers to use their bank cards instead of credit cards so he can save money.

He takes checks or cash too, but you don't get a discount for using them, though he'll like you enough to let you add your bill to the next if you're dropping off when you're a bit short.

oh well, we may as well go the whole hog, here's Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders - James D. Scurlock all over again...

HeadSet Says:
I put that credit card article paraphrase in as an example of the absurd. I do not think anyone really believes that paying off credit cards every month is immoral.

at last, the confession :cry: the intent of a poster is not always clear, but i certainly saw the quoted article as the work of a shill or a seriously deluded individual...

Randy H Says:
I admit using credit card “transactors” as a straw man argument of sorts. At best we’re arbitraging the system; at worst we’re free riding on the backs of the poor, ignorant, stupid, uneducated, and financially existential.

Not really. The 'poor, ignorant, stupid' etc are just people who willingly took on a CC knowing that they will have to pay ~15% on any balance outside of the grace period as a form of personal loan, and accepted it and use it on those terms. (Some CCs don't even have a grace period.) Lots of ordinary middle-class families carry forward credit card balances month after month to tide them over on bills, as a substitute for cash, or to 'buy now and pay later'. The only thing to avoid is not being able to retire the debt over time, or being unable to service the interest, as with any loan. If everyone was a transactor, the banks would stop offering credit cards, or stop the interest-free period in order to raise some revenue. After all, the banks' line of trade is debt and interest. But we're not free-riding on others, just not giving the banks their hoped-for revenue. The intent of the banks is to harvest interest, and they sweeten the deal by offering an interest-free period. They designed it in as a feature.

However, we are seeing the effects of increasingly liberalised credit right now, both in housing and household indebtedness on CCs, with the spectrum of results from misers to spendthrifts.

hmm, GEICO is the major engine room of warren buffett's prosperity -- he then plays his insurance money on the stock market -- and puts it all back in the pot at the end of the great game by giving it to bill...

I am surprised this wasn't mentioned, but that GEICO lizard has a distinct Oz accent.

DS

Seems I've hit a soft spot. For once you're taking the liberal markets defense. This weaves in well with the topic of this thread, methinks. If you spend a couple minutes googling the plight of the working poor and credit cards you'll see there are plenty of arguments involving the way in which credit cards are structured to allow free riders like you to benefit from the paycheck-to-paycheck, downtrodden.

You are certainly free to disagree with those arguments. I do. But for you to so voraciously argue the illegitimacy of their perspective altogether probably reveals more about you than about them. Aren't you the stalwart defender of the legitimacy of everyman's perspective as nothing more than yet another narrative?

Really, it's OK to be on the other side sometimes. No matter how far you go one direction there's always someone willing to go further. Even if you're an all-organic, vegan, someone will pipe up and call you a tool for the industry because they're a "fruitarian" who limits their consumption to biodynamically grown, locally produced communitarian non-money purchased fruits.

yes. actually, i'm carrying a CC balance myself that is hard to retire, altho it's a fairly trifling sum. it's purely philosophical, i suppose i commented cos i couldn't see what the fuss was about. i just don't see that socia1ism should extend to credit card arrangements. the comments i've made i thought sum up the ethos of CCs tho -- i have never thought about the interest-free period in quite that way before, i'm certainly not benefitting from someone else's credit situation. that's like saying my mortgage is influencing someone else's or vice versa, when they are separate dealings with the bank.

wiki says that the geico gecko is of east london origin as a surprise factor, but cockney and oz accents are very similar -- and geckos occur in australia naturally, not so much in east london...

Temporary OMO: Fed adds $5.25 billion with overnight RP

OT, but I found it hilarious. A friend's daughter just graduated, got a job, and moved here. She needed help with buying a car, I took her trawling through the used-car contract-seller lot on Stevens Creek yesterday.

While she was messing around inside some car, I saw a rather nice '05 Volvo - I opened the trunk and one of them open-house sidewalk signs from ERA was still lying in there. Looks like someone was in a hurry... :-)

SP

>out about the ATM fees. He tries to get his customers to use their bank cards instead >of credit cards so he can save money.

Presumably by getting charged "only" 1.2% private tax instead of the 2-4% of the real credit cards.

>At best we’re arbitraging the system; at worst we’re free riding on the backs of the >poor, ignorant, stupid, uneducated, and financially existential.

If you had said that it was the the banks and credit -card companies doing this, I would have been more inclined to agree.

Back to signature-based ATM/debit VISA-branded cards: In 2005 (in other words, not very long ago), the banks, including big ones like BofA, were promoting that cardholders should ask merchants for signature-based debit transactions. They offered lotteries/sweepstakes, cash back, that sort of thing. This must have been based on banks making more profit on such transactions by charging the merchant, because they certainly were not saving money by making the transaction handling MORE complex (the signature, potentially paper handling).

It just occurred to me that one important fact was missing from the whole CC discussion, and it might not have been obvious to the international crowd here
at Patrick's:

The US has State laws that prevent merchants from EXPLICITLY passing the CC transaction fees on to consumers. In other words, they cannot advertise a lower sales price for cash/check, and tack on an explicit fee to cover the 2-4% CC transaction cost.

This is the mechanism by which the CC companies have gamed the system so that everyone has to shoulder the burden, whether they pay cash or not. This is the "You might as well because you have to pay for it anyway" type of marketing.

Reference: Wikipedia, credit cards. Excerpt:

In the United States, until 1984 federal law prohibited surcharges on card transactions. Although the federal Truth in Lending Act provisions that prohibited surcharges expired that year, a number of states have since enacted laws that continue to outlaw the practice; California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Maine, New York, Oklahoma, and Texas have laws against surcharges. Regardless of what state one resides in or purchases a product, however, both Visa and MasterCard have publicly stated that surcharges on credit card transactions are against the rules. [13]

***

Hence, even in states where there is no law, the practice is forbidden by the agreement that the merchant has to enter into with VISA/Mastercard or Discover.
In effect, they are using their duopoly muscle to make their wish into a de-facto law.

justme said:
The US has State laws that prevent merchants from EXPLICITLY passing the CC transaction fees on to consumers. In other words, they cannot advertise a lower sales price for cash/check, and tack on an explicit fee to cover the 2-4% CC transaction cost.

And yet, there are at least two establishments in the Cupertino Village that give you a small discount for cash. They don't "advertise" a lower sales price, so technically they are not really breaking any agreement with the CC-industrial-complex (tm) :-)
In fact, it is so unadvertised that I did not even know about this until some colleagues clued me in.

SP

I get 5% gas discount on gas and 1% discount on everything else. That is why I use Chase Mastercard for EVERYTHINg .... My average monthly rebate is around $50.00.

And if I'm not mistaken, Visa, MC, et. al. are not considered _banking_ networks. Visa itself is an odd entity. It has no customers, only members. It doesn't actually own the financial exchange between the merchant, bank and consumer; it just arranges for that transaction "between its participating members".

The regs are over my head but I believe a lot of this rigamarole is designed to avoid US and State banking regulations. I seem to recall that a number of large banks tried at one point to promote ATM debit cards without Visa participation, but they quickly ran into a bunch of regulations over who and when they could charge transaction fees. Since Visa isn't a bank but a member network its a lot harder for the regulators to get their fingers into the system. The CC industry also has effective lobbyists and very aggressive lawyers who regularly try to get state laws restricting their market power thrown out in Federal court on interstate commerce grounds.

Back to the gas stations charging $0.25 (mine charges $0.40 which is ironically right around 1.2% of the average fuel purchase): I'm not sure that doing this is actually legal. It may be a grey area that no one's challenged yet. If your ATM card is Visa then they're violating state law and their Visa merchant agreement (unless they have a custom agreement, which is possible). If you ATM card isn't Visa, then they might be falling afoul of banking regs, like having the right to receive cash back on every ATM purchase -- usually a minimum of $10.

"CC-industrial-complex" (TM)

I move for inclusion, a 2nd anyone?

Welcome to Oregon (home of the underground economy!)

We've been doing this for years! Whether it's auto repairs, landscaping or getting tooth decay treated... CASH TALKS in OR! (I've often wondered where that "mystery pitcher" magically appeared from?) "Oh, didn't that OTHER fellow order a pitcher? Don't worry about it hon!"

I don't see ANY problem (moral, ethical, ideological, etc.) with using a credit card for my own convenience, and paying off the full balance to avoid getting hit with interest charges. The reasons are very simple:

1. I _am_ following all the terms of the agreement that I have made with the CC-company. If they want to change the terms, they are free to do so - at which point I can decide whether those new terms are acceptable to me.

2. The terms are clear - as a card-holder, I am using the issuer's card instead of their competitor's. In exchange for this, I get the convenience of paying by card and not carrying cash on me. The billing cycle is the company's choice - they opted to bill me once a month. If they want to change this, reduce the grace period, etc., they are free to do so. (see #1).

3. The same terms are applicable to everyone - including the late-payers and balance-carriers. I am not asking for, or taking advantage of any special treatment here.

4. Carrying and using the card has other occasional penalties relative to cash payment - Forex transactions are almost always unfavorable to you. The CC-company collects and sells information about your purchasing habits to their 'affiliates'. And you cannot get into the express line at the supermarket (assuming you have any dignity, of course, because I invariably see some asshat with 14 items in the 10-item cash only lane). As a card-holder, I have to decide whether the convenience outweighs these downsides.

In other words, it is a pretty clear business agreement amongst adults who choose a course of action that is appropriate for them within the terms of that agreement. So, even if this means higher interest charges for cc-debt-users, I don't see what the big moral dilemma on being a no-balance card-user is all about.

SP

@SP

If they want to change the terms, they are free to do so

No, they are not. This is part of the problem. They cannot have different terms for different types of customers outside of a narrow set of variables. They also cannot exclude you as a customer except for a narrow set of variables.

And you cannot get into the express line at the supermarket

Huh? Where I go 2 of the 3 lines are CC/ATM only. The "cash" line always involves some octogenarian writing a check. The swipe is always faster than the checkbook or the till assuming the swiper knows how to use the POS terminal.

Randy H Says:
SP said: "If they want to change the terms, they are free to do so"

No, they are not. This is part of the problem. They cannot have different terms for different types of customers outside of a narrow set of variables. They also cannot exclude you as a customer except for a narrow set of variables.

Nope, my point missed you. :-) They are free to change the terms of their product to _all_ their customers, not a change that is discriminatory to a cherry-picked subset. Then their customers _all_ can make individual decisions on whether they will accept the new terms.

SP

New thread: Barack Obama Wants to Reward FBs

>I move for inclusion, a 2nd anyone?

I second that, let the inventor be heralded as "SP".

ATM card isn’t Visa
Speaking of which.... has anybody ever had unauthorized use of a check card and tried to get the charges reversed? I've never liked the thought of trying to convince the bank to put money back into my account (if the card is lost or stolen) so I always specify that I receive an ATM card only. The regulations concerning CCs are very strict and I know my losses are limited. Only the paranoid survive...
I know this has been mentioned before, but I remember watching a Frontline special and being shocked to find out that if you default on some other debt (or somehow become a greater risk to the CC company), as part of the terms of service, the CC company can raise your interest rate. As if FBers didn't have enough to worry about. Also, the CC companies have consistently fought regulations that would require them to print the amount of time it would take to pay off the CC debt if only the minimum payments are made.

I am incredibly frustrated at the situation in Palo Alto myself (renting for 4+ years now, and just 3 months ago my greedy f*king landlord raised my rent 25%) and I don't know whether to laugh or cry on being called a troll. Just walk around neighborhoods around Embarcadero/Greer, and see for yourself - houses are still selling *in this area*, as of even last week (i.e post all the credit turmoil).

I don't know where the cash is coming from, but may be it is the damn VMWare IPO, or whatever.

And on the Sunnyvale rent situation, my friend who told me is a fellow bubble sitter (in fact, he thinks we are heading towards Great Depression II and he quotes Mises to Minsky) but even he was surprised to see the apartment owners *still* having this much leverage in Sunnyvale. He thinks it is the valley job market, which hasn't shown much signs of weakness yet.

Frustrated, yes. Incredibly so. Troll, hell no.

Troll, hell no.

oh, OK, if you say so...

I don’t know where the cash is coming from, but may be it is the damn VMWare IPO, or whatever.

Not necessarily. Many people in this area still think that the Bay Area is more special than other special places. :roll:

The credit turmoil will hit harder than what I can possibly imagine. Even this area.

RE: Sunnyvale

Rent was still high and going up late in 2001.

test

DIAF

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