Comments on: The Secret History of the Credit Card http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/ Personal finance that makes cents. Common sense advice on topics from high interest savings accounts, frugality, cd rates, money market accounts, mortgage rates, how to get out of debt, money management and more. Sun, 21 Mar 2010 01:33:08 +0000 http://wordpress.org/?v=2.7.1 hourly 1 By: itsalovethang http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-141564 itsalovethang Thu, 24 Jul 2008 18:35:55 +0000 http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-141564 I have a question for the author. Can Chpater 13 help boast your credit score? Also, can Child support hurt you in obtaining credit ? I have a question for the author.

Can Chpater 13 help boast your credit score?
Also, can Child support hurt you in obtaining credit ?

]]> By: DavidR. Zukerman http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-23178 DavidR. Zukerman Thu, 30 Nov 2006 16:26:38 +0000 http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-23178 Have been commenting about credit card aggrandizement well before PBS gotaournd to it. 29.99% intgerest opught to speak for itself. USURY, people. But my hunch is that campaign contributions have nullified usury laws. Madison, in the opening sentence, Federaloist 57, seemed to anticipate the Enropn mentality (and the credit card squeeze) in warning that society includes people who seek the "ambitious sacrifice of the mabny to the aggrandizement of the few." I have bneen citing this document more than ten yeasrs, tyo no avail. Certainly no politician has called attention to it, either in campaigns or inh calls for camp;aign finance reform. (If our pols honored No. 5t7, we would have all the reform we need.) Most curiously, this is the first I had heard of Andy Kahr since my high school graduation in 1958. Andy, a classmate, was generally regarded as having a brilliant mind--one that had our physics teacher somewhat awed, if memory serves. Now I find that Andy is credited as being the father of current credit card practices. That, however brilliant a mind Andy has, gives him too much, uh, credit. He couldn't have done it with a supporting cast of politicians, businessmen, lawyers who worship at the altar of the villain of "It's A Wonderful Life." the fictional banker Henry J. Potter. Except of course, for the credit card aggrandizers, Potter is hardly a villain. Please cf. Muhammad Yunus, whose banking practices got him and his bank a Nobel Peace Prize--and, for me, come straight out of the business mindset of "It's a Wonderful Life" 's Peter Bailey and his son George--that profits in business are a consequence of serving, not crushing, the people. The director of this "Wonderful" movie--Frank Capra, is derided by cynics as giving moviegoers Capracorn. Well, Capracorn is a direct descendant, I think, of the populist (shudder) counsel Madison gave us in Federalist 57. Have been commenting about credit card aggrandizement well before PBS gotaournd to it. 29.99% intgerest opught to speak for itself. USURY, people. But my hunch is that campaign contributions have nullified usury laws. Madison, in the opening sentence, Federaloist 57, seemed to anticipate the Enropn mentality (and the credit card squeeze) in warning that society includes people who seek the “ambitious sacrifice of the mabny to the aggrandizement of the few.” I have bneen citing this document more than ten yeasrs, tyo no avail. Certainly no politician has called attention to it, either in campaigns or inh calls for camp;aign finance reform. (If our pols honored No. 5t7, we would have all the reform we need.)
Most curiously, this is the first I had heard of Andy Kahr since my high school graduation in 1958. Andy, a classmate, was generally regarded as having a brilliant mind–one that had
our physics teacher somewhat awed, if memory serves. Now I find that Andy is credited as being the father of current credit card practices. That, however brilliant a mind Andy has, gives him too much, uh, credit. He couldn’t have done it with a supporting cast of politicians, businessmen, lawyers who worship at the altar of the villain of “It’s A Wonderful Life.” the fictional banker Henry J. Potter. Except of course, for the credit card aggrandizers, Potter is hardly a villain. Please cf. Muhammad Yunus, whose banking practices got him and his bank a Nobel Peace Prize–and, for me, come straight out of the business mindset of “It’s a Wonderful Life” ’s Peter Bailey and his son George–that profits in business are a consequence of serving, not crushing, the people. The director of this “Wonderful” movie–Frank Capra, is derided by cynics as giving moviegoers Capracorn. Well, Capracorn is a direct descendant, I think, of the populist (shudder) counsel Madison gave us in Federalist 57.

]]> By: Get Rich Slowly » The Secret History of the Credit Card (repeat) http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-22477 Get Rich Slowly » The Secret History of the Credit Card (repeat) Tue, 28 Nov 2006 20:12:06 +0000 http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-22477 [...] I originally shared this piece on June 12th. I’m reposting it because many PBS stations are rebroadcasting this show tonight. [...] [...] I originally shared this piece on June 12th. I’m reposting it because many PBS stations are rebroadcasting this show tonight. [...]

]]> By: J.D. http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-442 J.D. Tue, 13 Jun 2006 14:32:40 +0000 http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-442 <i>I saw this program when it was first on and it is/was a VERY biased program. The entire show was based on the idea that these evil companies are somehow forcing consumers to be irresponsible and stupid about their finances.</i> I'm not sure that it's a bad thing (from a personal finance perspective) to have a show that is biased toward consumers. :) Since this is a site about saving and keeping money, I feel no qualms in sharing such information, especially if it'll help some people. One point the program makes, though, is that these companies don't always play by the rules, and there's very little a person can do about it. Thus the class-action suit against Providian for failing to credit accounts on time. It's not just Providian that practices this sort of behavior. I used to have all my accounts with U.S. Bank. I had very bad experiences with them. For one loan, even if I mailed the check two weeks before it was due, it would often be credited to my account late and I would be charged extra fees. This was crazy! Yet there was nothing I could do about it. I called to complain, but was never able to reach anyone who could help. All I could do was mail out my check as soon as I received the bill and hope that they'd credit it on time each month. The show seemed to be suggesting that the companies should help inform and educate the consumer so that the companies make less money. That's absurd. Could you imagine going into a store and having the clerk say "I can sell you this if you want, but you can get this cheaper down the street." Of course that would never happen, why do we ask the same of these businesses. A few points: 1. I own a small business. We direct people to places where they can buy things cheaper *all the time*. It's good business. Sure, we could sell to the customer at our more expensive price, but when he found out what we'd done, he'd never come back to us again. And he'd tell his friends. If we don't think we have a good price on something, we're not afraid to say it. You know what? Many people buy from us anyhow. (Not everyone buys on price.) 2. I respect other companies that do the same thing. There are a couple of local businesses I shop at where the employees will say, "Oh, you can get that cheaper elsewhere." Sometimes I go elsewhere, but the shops that are willing to refer outside their doors get most of my business. My wife and I are taking bids on a roof repair. Some of the contractors have given us prices for everything we've asked for. Others have told us, "You don't need all that. What you really need to do is this, and it'll save you thousands of dollars." Some have told us, "We're not the best place for that. This other company is cheaper." Outside of corporate culture, these sorts of referrals are common. People work together to help each other. It's only in large corporations (and not *all* large corporations) that the "screw the customer" mindset seems to survive for any length of time. Small businesses can't think like that or they go under. 3. These banks use advertising and other subtle psychological manipulation to lure customers into a life of debt. Yes, it is ultimately the consumer's responsibility to stay out of debt. No question. But banks do whatever they can to bypass our sense of responsibility. It used to be that credit card companies were not allowed on college campuses. Why not? Because college students are at the cusp of adulthood. Some are ready to accept the responsibility of a credit card, others are not. I was one of those who wasn't. I didn't have the personal finance education that I have now. I didn't understand the power of compound interest and compound returns. I didn't understand what it felt like to save for something. The credit card companies gave me a chance to have what I wanted now. Was I an idiot? Of course. Did the credit card companies take advantage of this? Yes, they did. 4. Whose responsibility is it to educate young adults about the perils of credit? Credit card companies -- helped in part by their huge profits -- have marketing and advertising budgets that dwarf any consumer education agencies. I can erect a personal finance web site in an effort to educate people, but I'm only going to reach a few hundred like-minded individuals. Credit card companies can sway millions. <i>It's the consumer's responsibility to educate themselves enough to have a basic knowledge of the system.</i> Agreed. But I believe the credit card companies share some culpability. I saw this program when it was first on and it is/was a VERY biased program. The entire show was based on the idea that these evil companies are somehow forcing consumers to be irresponsible and stupid about their finances.

I’m not sure that it’s a bad thing (from a personal finance perspective) to have a show that is biased toward consumers. :) Since this is a site about saving and keeping money, I feel no qualms in sharing such information, especially if it’ll help some people. One point the program makes, though, is that these companies don’t always play by the rules, and there’s very little a person can do about it. Thus the class-action suit against Providian for failing to credit accounts on time.

It’s not just Providian that practices this sort of behavior. I used to have all my accounts with U.S. Bank. I had very bad experiences with them. For one loan, even if I mailed the check two weeks before it was due, it would often be credited to my account late and I would be charged extra fees. This was crazy! Yet there was nothing I could do about it. I called to complain, but was never able to reach anyone who could help. All I could do was mail out my check as soon as I received the bill and hope that they’d credit it on time each month.

The show seemed to be suggesting that the companies should help inform and educate the consumer so that the companies make less money. That’s absurd. Could you imagine going into a store and having the clerk say “I can sell you this if you want, but you can get this cheaper down the street.” Of course that would never happen, why do we ask the same of these businesses.

A few points:

1. I own a small business. We direct people to places where they can buy things cheaper *all the time*. It’s good business. Sure, we could sell to the customer at our more expensive price, but when he found out what we’d done, he’d never come back to us again. And he’d tell his friends. If we don’t think we have a good price on something, we’re not afraid to say it. You know what? Many people buy from us anyhow. (Not everyone buys on price.)

2. I respect other companies that do the same thing. There are a couple of local businesses I shop at where the employees will say, “Oh, you can get that cheaper elsewhere.” Sometimes I go elsewhere, but the shops that are willing to refer outside their doors get most of my business. My wife and I are taking bids on a roof repair. Some of the contractors have given us prices for everything we’ve asked for. Others have told us, “You don’t need all that. What you really need to do is this, and it’ll save you thousands of dollars.” Some have told us, “We’re not the best place for that. This other company is cheaper.” Outside of corporate culture, these sorts of referrals are common. People work together to help each other. It’s only in large corporations (and not *all* large corporations) that the “screw the customer” mindset seems to survive for any length of time. Small businesses can’t think like that or they go under.

3. These banks use advertising and other subtle psychological manipulation to lure customers into a life of debt. Yes, it is ultimately the consumer’s responsibility to stay out of debt. No question. But banks do whatever they can to bypass our sense of responsibility. It used to be that credit card companies were not allowed on college campuses. Why not? Because college students are at the cusp of adulthood. Some are ready to accept the responsibility of a credit card, others are not. I was one of those who wasn’t. I didn’t have the personal finance education that I have now. I didn’t understand the power of compound interest and compound returns. I didn’t understand what it felt like to save for something. The credit card companies gave me a chance to have what I wanted now. Was I an idiot? Of course. Did the credit card companies take advantage of this? Yes, they did.

4. Whose responsibility is it to educate young adults about the perils of credit? Credit card companies — helped in part by their huge profits — have marketing and advertising budgets that dwarf any consumer education agencies. I can erect a personal finance web site in an effort to educate people, but I’m only going to reach a few hundred like-minded individuals. Credit card companies can sway millions.

It’s the consumer’s responsibility to educate themselves enough to have a basic knowledge of the system.

Agreed. But I believe the credit card companies share some culpability.

]]> By: Peter http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-441 Peter Tue, 13 Jun 2006 14:07:06 +0000 http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-441 I aw this program when it was first on and it is/was a VERY biased program. The entire show was based on the idea that these evil companies are somehow forcing consumers to be irresponsible and stupid about their finances. It removed all personal responsibility from the consumer while putting ALL the blame on the financial companies. It's all printed right there for you to read (sure it's in 2 point type but it is there). If you have a question about your credit card or a fee - ask. If you think your bank charges too much, find another bank. The show seemed to be suggesting that the companies should help inform and educate the consumer so that the companies make less money. That's absurd. Could you imagine going into a store and having the clerk say "I can sell you this if you want, but you can get this cheaper down the street." Of course that would never happen, why do we ask the same of these businesses. It's the consumer's responsibility to educate themselves enough to have a basic knowledge of the system. I aw this program when it was first on and it is/was a VERY biased program. The entire show was based on the idea that these evil companies are somehow forcing consumers to be irresponsible and stupid about their finances. It removed all personal responsibility from the consumer while putting ALL the blame on the financial companies.
It’s all printed right there for you to read (sure it’s in 2 point type but it is there). If you have a question about your credit card or a fee - ask. If you think your bank charges too much, find another bank.
The show seemed to be suggesting that the companies should help inform and educate the consumer so that the companies make less money. That’s absurd. Could you imagine going into a store and having the clerk say “I can sell you this if you want, but you can get this cheaper down the street.” Of course that would never happen, why do we ask the same of these businesses.
It’s the consumer’s responsibility to educate themselves enough to have a basic knowledge of the system.

]]> By: mike http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-424 mike Mon, 12 Jun 2006 19:08:59 +0000 http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-424 ". . . describes how Providian, which grew from Kahr's First Deposit Corp, would receive a check, deposit it, but not credit it to the consumer's account for several days (or weeks). The consumer would then suffer escalating penalties and fees." I believe this is now illegal. Companies are required to post the payments within 24 hours of receipt. I also agree with Surly's comment above. For example - 55 million people pay their accts in full every month, according to the show. “. . . describes how Providian, which grew from Kahr’s First Deposit Corp, would receive a check, deposit it, but not credit it to the consumer’s account for several days (or weeks). The consumer would then suffer escalating penalties and fees.”

I believe this is now illegal. Companies are required to post the payments within 24 hours of receipt.

I also agree with Surly’s comment above. For example - 55 million people pay their accts in full every month, according to the show.

]]> By: VinTek http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-422 VinTek Mon, 12 Jun 2006 18:03:41 +0000 http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-422 I saw this documentary when it first came out, and urged everyone at a geek (tech) site that I am a member of (dualboot.net). It was an eye-opener for the folks who managed to catch it. Although the site is tech oriented, we had some very spirited discussions about credit card debt and how to get out of it a couple of years ago. Much of what Kahr was able to do has now been blunted, thanks to the ability to make online payments. I pay all of my credit cards online and religiously make note of the date of payment and confirmation number. I saw this documentary when it first came out, and urged everyone at a geek (tech) site that I am a member of (dualboot.net). It was an eye-opener for the folks who managed to catch it. Although the site is tech oriented, we had some very spirited discussions about credit card debt and how to get out of it a couple of years ago.

Much of what Kahr was able to do has now been blunted, thanks to the ability to make online payments. I pay all of my credit cards online and religiously make note of the date of payment and confirmation number.

]]> By: J.D. http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-418 J.D. Mon, 12 Jun 2006 17:07:28 +0000 http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-418 You are right, of course, that it all comes down to personal responsibility. And perhaps I am writing with too much hyperbole. But if you watch the show, and if you research Kahr's work, you will come to realize that he's intentionally manipulating the system to entrap people in lifelong debt in order to gain more profit for himself and for the company's to which he acts as a consultant. You are right, of course, that it all comes down to personal responsibility. And perhaps I am writing with too much hyperbole. But if you watch the show, and if you research Kahr’s work, you will come to realize that he’s intentionally manipulating the system to entrap people in lifelong debt in order to gain more profit for himself and for the company’s to which he acts as a consultant.

]]> By: surly http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-416 surly Mon, 12 Jun 2006 16:59:39 +0000 http://www.getrichslowly.org/blog/2006/06/12/the-secret-history-of-the-credit-card/#comment-416 "I believe Kahr is truly an evil man, single-handedly responsible for a lot of the credit trouble Americans face." How can you blame one man for the problems of millions of people? If you are an American who spends money on what you can't afford, carry a 10k credit card balance and pay off only $100 a month - then you deserve a life crippled by debt. Kahr didn't make you charge that 60" LCD screen on your McDonalds salary. YOU did. “I believe Kahr is truly an evil man, single-handedly responsible for a lot of the credit trouble Americans face.”

How can you blame one man for the problems of millions of people?

If you are an American who spends money on what you can’t afford, carry a 10k credit card balance and pay off only $100 a month - then you deserve a life crippled by debt.

Kahr didn’t make you charge that 60″ LCD screen on your McDonalds salary. YOU did.

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