Even After The Credit Card Laws, They're Trying To Fuck You

Even After The Credit Card Laws, They're Trying To Fuck You

The new credit card laws have been in place for a good week and a half now and the banks act like if they have been bent over and raped because of it.

A buddy of mine noticed that he had a $3 charge on his online credit card statement and was curious about it as, while it may only be $3, it was a new fee he didn't notice before. Well, of course this is Bank of America.. which other bank will try to fuck you the good ol' American way? but when he looked into why they were putting a $3 charge on his account per month it shocked him. He was getting dinged for getting a monthly paper statement sent to his home. Which was a service that was free for the past few years he had his account, but now was being charged.



When he called them up to inquire about this they told him that this was a new fee they enacted last week and that also he would not be getting any more reward points because they are expiring that benefit from his credit card. Reward points are like a lollypop for a gunshot wound. They really don't add up. Yes, you get them free for doing your regular purchase.. but doesn't it take, like 20k dollars to earn enough reward points to have a free flight? That just seems like a really bad deal.

This just shocked me. I sure it was in response to not being able to bend the customer over for over draft fees and surprise APR rate changes. I seriously can't wait to see what other surprises are in store now that the credit card laws are in effect. Though to be honest, if you still give your money to BoA, you deserve your $3 paper bill charge.



I'm sort of laughing at everyone who didn't switch over to a credit union years ago. What is the problem with going to a local bank or credit union. I wont be surprised when all those FREE bank accounts switch up to a monthly service charge of $9.99. I already heard of a couple that are doing it. Bank of America already charges you a $15.00 fee to take a payment on your CC over the phone. I mean.. how fucked up is that? You're not even using the paper that would cost you $3 and they're trying to charge you for having employees working the phones?

So why are credit unions better than banks? A typical student account at a credit union goes something like this:

No fees, no minimum balance, free online banking, free paper statement, free debit card.

In short - It's basically a non-profit, cooperative bank. They typically charge lower fees and have better rates. This is really all you need to know about credit unions.



I'm getting a 4% interest on my credit union checking balance up to 25k. No fees, ATM fee refunds. Your local credit union probably has a similar deal for rewards checking - you just need to 10+ debit transactions a month and a direct deposit transaction to kick it off.

I forgot to pay my credit card bill at my credit union one. They sent me a nice letter to gently remind me that the bill was due, and to say that they will assume it was an oversight and not charge me a late fee if I kindly paid soon. That right there should show you the difference between banks and credit unions.

They also allow you to create virtual accounts with custom names that are basically sectioned off areas of an existing account. These earn the same interest as a checking/saving/money market account and if you are having trouble managing your money, they are nice to section of what money you need for what aspect of your bills.

It's very simple. Just Move Your Money to a Local Bank or Credit Union. Otherwise you're just going to find some lame excuse of getting nicked for $3 paper letters in the mail bullshit that BoA did.



Yeah.. I worked on that ad and I, much like Emily, was pretty much shocked when she read that line about wiping out the credit card debit.. As if she really didn't believe that she had just said that.

I keep urging people to watch this PBS program about THE CREDIT CARD GAME

I bank with a credit union, I don't bother using any of the credit cards I own unless there's some MAJOR emergency.

Credit cards may be cool as long as you pay off your debt every month, but don't expect to make your bank happy with that behavior though. You're not going to get any love from them as you're not making them any money. You may notice that they keep raising your limit if you're in debt and don't pay it in full. They are shooting for you to add to your debt and incur more interest rate fees.



Honestly, people who have accounts with large, for-profit banks are the perfect symbolism for what caused the economy to go down the toilet. All these people were greedy and wanted more money so they got accounts with BoA and thought that BoA would give them free money, but in the end the executives laughed (because they are even more greedy then you) and took your money. And these people are both liberal and conservative.

But hey, overdrafts are a thing of the past, right? As Bank of America Eliminates Overdraft Fees on Debit Buys

Bank of America Corp. plans to announce Wednesday that it is eliminating $35 overdraft fees on debit-card purchases as the bank tries to stay ahead of a sweeping round of regulations.

The move means that any customer who attempts a purchase with insufficient funds will be denied at the point of sale. That will affect people who currently get nicked on small, everyday transactions such as coffee, groceries or subway passes without knowing their account is temporarily running a deficit.

The new policy will begin for new customers on June 19 and in August for existing debit-card holders. Citigroup Inc. already has a similar policy in place.

Overdraft fees are an important source of revenue for banking institutions, which earned $36.7 billion in 2008 for service charges on deposits even as U.S. banks got massive infusions of taxpayer-funded aid.

Just take a moment and read just the bold statements there. Just do that. $36.7 BILLION dollars was taken from the masses and given to the banks due to the art of overdrafting. Even if Bank of America gets rid overdraft fees, this long since practiced fucking of America should anger you. Just look at how Wallstreet presents this article to you;

-> Bank of America is preparing for "a sweeping round of regulations," such as not being allowed to charge interest in the thousands percent unless the customer forgets to say they don't want to, and I dunno I think that's about it really.

-> Customers get "nicked" with an overdraft fee that is incurred as soon as a person goes even one penny into the red, stacks indefinitely, and is engineered to incur as many fees as possible.

-> The move is going "cost" Bank of America millions of dollars which exist in theory, in the future.

-> Banks are "struggling" to update computer systems to handle a federal regulation that adds a single yes/no question to any person's account.

-> A direct quote from a Bank of America spokesman that Bank of America is going "above and beyond" the federal requirements that banks ask nicely before fucking over their clients.

This is the act of charging you more money because you are broke. While overdraft protection sounds like something you may want on your card as it's a nice feature on paper, it's far from that in practice.



In many cases there was retroactive overdrafts that trigger even if you deposit some cash to cover the overdraft immediately after making it. Then charging you more overdrafts because the first overdraft fee put you back in the red and also letting your available balance continue to just show your initial corrective deposit for like a week and not informing you that every transaction you were making was incurring another overdraft. Yes.. they sure know how to fuck you.
Here's a hot debit card tip of the day:

Don't ever use a debit card to pay for a hotel room even if you are certain you have enough funds to cover your stay.

Hotels tend to put holds on funds equal to several hundred dollars and if you're tight on funds (but not even necessarily tight enough that you couldn't afford to stay) you still might overdraft because the holds are treated as debits. I first noticed this when I went out to a BBQ joint with my girlfriend. She put it on her card and then noticed that the bank charge was a good $20 more than she paid for. This is them putting a hold on more than the bill to make sure that it was covered.

The worse case that can happen here is that it shows up as a double charge as it takes a week for your card's initial slide to go back to your account and then you get dinged for the amount of the stay at the end of the weekend while that original charge is still pending back to you. So it shows up as a sort of double charge on your account. Which can and may send you into overdraft territory.



Don't believe me? Look around your local hotel next time before checking in and being eager to knock them boots. They have signs EVERYWHERE. Gas stations do the same thing if you pay at the pump, but it's usually a $50 pre-authorization charge so you may not notice unless you were really hurting for money.

And if you've never had an overdraft and can't fathom how one would get themselves into a situation, it's actually very easy to do. Here's the three simple steps
1) deposit your check
2) buy things because you thought you had money
3) go overdraft because the bank held your check for 4 days for no real reason

Yeah, you should obviously wait till your check clears before buying, but a lot of people don't think about it, and even then.. your check gets to you on a Friday and you're jumping to get somethings done over the weekend. Banks don't make it easier as they don't give you a defined amount of time on how long they will take to clear said check.

It's funny that in 2010 the banks still act as if it should really take a week for one transaction to "clear". It's not like all US banking transactions get routed through one warehouse in Bangladesh which has 200 overworked teenagers working furiously with abacuses determining how to best order transactions to overdraft your account. And I don't buy that they can't instantly clear your check considering the other modern marvels they have made up.



"Oh, this software? Well it performs hundreds of stock transactions in a second and, by gaming the system, is able to essentially create money. And this software? Well it's immensely less advanced but it takes a week to do almost the same thing." This is literally what the banks are trying to say when they claim it takes more than 5 seconds to clear a check you just deposited.

These tactics are all done to maximize fee income. The banks used to use the justification "Well, we process them largest to smallest because what if your mortgage payment is the large charge? You wouldn't want to be late on that payment, would you? We're just doing you a favor!" Which doesn't even make sense because if the overdrafting system is in place they still process the mortgage payment payment and just ring you up for overdraft fees. They made 36 billion dollars off of overdraft fees alone. This was all just to line their pockets.



So what are the steps to never get an overdraft charge? Simple;

1.) Have enough money that you can maintain your standard of living for 9 months even if you are unemployed.

Don't have enough money to do that? Then you're an American! I know telling you to lower your standard of living would be silly, but I guess it's just one of those things that you will have to do, now isn't it?

I have to say though, if you leave that much money in a checking account, you are most likely an idiot. I mean, seriously, Why would you do that? Why wouldn't you invest that nine months worth of savings in an account that would gain more interest then your typical pathetic BoA savings account with a meager 2% interest rate. You could almost certainly be making more money with your cash elsewhere while still being able to access it relatively easy in the event of an emergency.



Last I checked Chase is practically willing to unzip my pants for me if I just put my name to a "Sapphire" card application. But really, fuck credit cards. AMEX lowered my grace period by 6 days and moved my due date up a week without telling me. Luckily I logged in and saw the new date in time. Since then I have made it a point to just not bother ever using my AMEX again. There's no reason to do so and canceling it would be a ding in my credit history. So you see, there's really no way you can win in this credit card game. They got you coming and going.

In short: Fuck the System.

The Great Credit Crunch

The Great Credit Crunch

This week we finally get to the start of the new Credit Card laws. I'm pretty sure very little of you actually care about what this is, but if you ever owned a credit card or have any amount of debt I would say that you need to watch this PBS special about the whole mess. Yes, it's a mess. It's also a trap. Haven't you ever heard of the Card Game?

I really implore you to watch the Front line episode with this simple click.

If you don't have the time to view that, I would suggest you do so. You'll be thankful that the new credit card rules came into effect. Stuff like Ex-CEO of Providian saying things like "The banks were charging borrowers a higher interest rate to give the wealthy a better rate.

Basically nothing you didn't know if you were an informed consumer, but let's face it, your average consumer is NOT informed about all this. Why else would we have to have new Credit Card laws enacted? It's worth watching, if only to know full well that there's no a regulatory agency in the Federal government that cares about helping you.



Apparently, of all people, Timothy Geithner had to yell at the regulators to start worrying about consumers. The problem, as the program details, is that the regulators are in the business of keeping the banks solvent while supposedly protecting consumers, and anything that gouges consumers helps the banks, now guess which has bigger/better lobbyists (and is discussed in the episode)?

The whole episode is nothing but a bunch of finance people saying that everything they're doing is right, correct, and at the end the Ex-CEO guy says that no matter what law you come up with "bankers will find it out" in order to get around it and make money. And even with the new Credit Card laws, the last nine months have been nothing but the CC companies trying to skirt the law and sneak in last minute increases.

There's even one asshole, the guy who came up with and holds close to his chest the ubiquitous overdraft "non-contractual courtesy" (that's important btw) to make sure it doesn't fall under Truth In Lending Act, goes on after wards to say that the federal government should stay out of the banks entirely to let the free market reign. He seriously dead pans this in such a way to make it sound like this whole recession and TARP never happened in any way whatsoever.



While you may say that more risk = higher rate off the bat, it never works like that, and the rates escalate the second you make a mistake. A debt of a few hundred dollars balloons into thousands, and the company complains that it can't make money, when really they make the people so in debt that they have to declare bankruptcy.

At one point there's even an interviewee that states the entire system is hurting so badly right now that the banks are trying hard to charge the people who are still paying as much as possible in order to get money while they can. The idea of high interest makes sense if consumers are deterred by it, but they aren't, as the US Military proved by prohibiting soldiers from being able to use Payday loan centers.

People are dumb, bankers know this, and they exploit it to levels of systemic risk. This episode just shows how the home equity / refinancing thing exploded so big for normal non-subprime people who needed to get out of their credit card debt that resulted from living beyond their means. The bankers are resisting anything that might limit the size of the overall lending, but as the Center for Responsible Lending guy put it, that's the whole idea. As Michael Ruppert put it, the entire system is premised on infinite growth, it's a giant ponzi scheme. Things don't work that way.



Again, the whole more risk = higher rates thing is utter bullshit. That just isn't how it works and all you guys paying off your credit cards each month aren't helping your credit rating in the slightest. You're definitely doing the 'right' thing. You're being responsible and showing you're a low credit risk, but banks give no fucks about that stuff anymore.

If you want lower rates and higher limits, leave a small balance on your card each month. It's the traditionally irresponsible thing to do but if you don't mind paying small finance charges it can work to your advantage, especially if you're trying to build your credit rating.

look how happy she is


I once had a BOA card with a fairly high limit and just leaving a few hundred bucks on the balance each month, I've seen 2 small rate drops and 20% limit increase within a year of having it that I didn't even ask for. What does this mean? They saw that I was being irresponsible and wasn't paying in full and they wanted to give me more credit so that I could amass more debt and have to pay them more interest. See how this is working out?

It's a backwards system that rewards bad habits but those bad habits make banks more. So of course they'll encourage them. Don't worry, once they figure out that you're above your limit or getting close, before this new credit card law the banks were able to just randomly slash their limits. Even if they always paid on time every month they were able to do this and since the balance is higher than the credit limit, the banks were able to charge a fee on top of that.

In the interviews PBS talks to the guy who came up with the entire idea, and he flat out admits that the only way "free checking" can work is with the "non-contractual courtesy" (overdraft) fees. They were specifically engineered to be outside the Truth In Lending Act, and they're part of your checking account agreement. The entire thing is a courtesy, and courtesies can be charged at any rate they want. Theoretically, if you went over by one cent, they could charge you $1 million and not break any law (though you might have an unconscionably argument, so they try to keep it "reasonable").



He goes on to admit that free checking wouldn't exist if it weren't for these fees, but that the free checking gimmick is hilarious successful. Americans, in his words, love nothing more than "free" and "all-you-can-eat". I got a call from my credit card company a couple of months ago when they first announced the CC law changes. The company wanted to know if I still wanted to be able to charge over my limit, you know, in case of emergencies. Did I want to keep this useful privilege or did I want to have my card publicly and embarrassingly declined once my limit was reached? Are you sure you want your card to be declined?

My answer: "Actually, now that you mention it, I barely use this card as it is, what's the process for canceling the card? Can you initiate it on your end? He stuttered and eventually told me to call a 1-800 number to cancel the card then hung-up. Also, the question "Will that be debit or credit" just gets me to shutter. I mean, I like to pay everything in cash. I really do carry cash, in case you ever wanted to rob me, It's really a matter of not trusting the credit card industry in the slightest because of their practices.



My rate was jacked up on my AmEx card for no reason other than "we're losing money so we need yours". I never had a late payment and paid it off every month. You know what I was? I was a banks worse nightmare. How did I sleep at night knowing that I was denying them some sweet sweet profits by not being late and incurring surcharges? Much like American Express, if you're banking with Bank of America you are supporting one of the shittiest, shadiest and most awful institutions in modern finance

I have stopped banking with Bank of America, as should you. But when I realized that they and other banks like Chase were bending the fundamental laws of time and space in order to charge me extra in overdraft fees, I decided that I did not want to bank with any bank that existed in 5 dimensions. So I went with a local credit union. They handle my money and even provide me with other services with a smile that those big banks couldn't. Frankly I'm much happier today because of it.

Just think about the whole bail out. The banks borrowed the money from the tressureary at 0% apr, they turn around and lend it to you at 30%... how is this not completely wrong in every possible way? I have credit cards, but I would rather not touch them and usually keep them out of my wallet and in a desk. I really don't want to pay for borrowed money. Especially when the American public is getting fucked so badly in this exchange.



You currently stuck in credit card woes? Here's some Money tips!

Tip 1: A good way to get collection agencies off your back is to move without setting a forwarding address. Sick of constant phone calls from them? Try allowing the phone company to shut off your service for a week. They'll call, get a dead line and take it off their systems.

Tip 2: Sick of being treated like a second class citizen by your bank? Worry yourself no more! With this one easy tip, you'll start receiving great customer service from a savings institution that works for you rather than against y'all! So: the next time you find yourself frustrated, simply try this: earn over $100K a month and put most of it in your bank

We should abolish all private banks (but allow credit unions to continue operation), establish not-for-profit national banks, which will still make money, but that is not the objective. Everyone wins. Well, except bankers, but fuck them.