Author Topic: Credit cards  (Read 6384 times)

Offline bluefoxicy

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Credit cards
« on: September 26, 2012, 10:52:08 AM »
I wanted to know why Bank of America raises my credit limit--I got an $800 card a while back and it went to $1300, then $3000, then $3300 by itself, without anyone ever asking me.  PenFed offered me $15000 but I declined, went for $3000 instead (I wanted to consolidate my accounts under the credit union--plus that card is 9% APR).

Curious, I asked Google about these automatic credit line increases.

What I found was a bunch of people with scores like 563 and 528 talking about their $14k, $18k, $25k credit cards--just one card with a $25,000 limit--and how they called the bank and got an increase of $5k in 10 minutes.

Wait, what?

My credit score is 783.

WHAT?

Okay folks, what's about normal for you for a single credit card limit?  Why do all these broke bastards who can't pay their bills have cards half the size of my mortgage?

Seriously.  $25,000 credit cards.  Man I'm thinking on closing the BoA one, $3000 is good for me.

Offline weazletoe

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Re: Credit cards
« Reply #1 on: September 26, 2012, 12:37:42 PM »
Personally, I went the 25k limit. Mainly to but animal feed. Because Well..........

http://www.youtube.com/watch?v=ii8wO0KvECI&feature=related
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Offline nateo

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Re: Credit cards
« Reply #2 on: September 26, 2012, 12:43:59 PM »
The bank's job is to make as much money as possible. Their job isn't helping people to make sound financial decisions. Banks set their credit limits and rates to maximize their profit. If they can get some sucker to put $25k on a card and charge him 15% APR, (and hope that sucker doesn't understand why APY is different) why not?
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Offline bluefoxicy

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Re: Credit cards
« Reply #3 on: September 27, 2012, 12:16:15 PM »
The bank's job is to make as much money as possible. Their job isn't helping people to make sound financial decisions. Banks set their credit limits and rates to maximize their profit. If they can get some sucker to put $25k on a card and charge him 15% APR, (and hope that sucker doesn't understand why APY is different) why not?

I'm more thinking about the crazy stupid bastards that have more revolving debt than income per annum.  The bank offered me $15k and I was like... uh, no?

Weaze has animals now?  They need to be fed?

Offline Slowbrew

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Re: Credit cards
« Reply #4 on: September 27, 2012, 12:45:33 PM »
I hate to say this (because I work for a bank) but people often mistake a credit card company for a partner and not a for profit entity.  Credit card companies make their money off of people who are not smart financially but are very honest and intent on "doing what is right". 

CC companies don't want customers who payoff their balance every month since they make no money on them.  The perfect customer is the person who makes $1100/mo and has a $5000+ balance on their CC.  These people will never pay off their debt but they will keep trying to because "it's the right thing to do". 

Financially smart people know that when you get in a hole so deep you can't get out by yourself, you look to bankruptcy to level the field.  "Doing the right thing" only keeps you digging in further.

Banks like B0fA are not your partner because to them you are a profit center.  It's sad but true.  Look at the business from the bank's perspective and you will understand why they do what they do.  You won't be happy about it but at least you will understand.

Happy shopping!

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Offline The Professor

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Re: Credit cards
« Reply #5 on: September 27, 2012, 03:47:07 PM »
...Banks like B0fA are not your partner because to them you are a profit center.  It's sad but true.  Look at the business from the bank's perspective and you will understand why they do what they do.  You won't be happy about it but at least you will understand.

Right. The banks don't make much money off of folks who pay on time ...and within  the industry, people who their full balance off every month and on time are called "deadbeats".  That alone tells us where the credit card industry is coming from.   :P
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Offline phillamb168

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Re: Credit cards
« Reply #6 on: September 28, 2012, 03:09:45 AM »
Funny, that. Credit cards as they exist in the USA do not exist in France, or most of Europe. You can get the equivalent of Macy's cards and whatnot, for individual purchases in specific shops, but pretty much everybody uses debit cards here. It's one way (I think) that Jacques Shmoe dodged the bullet. There are still plenty of people here who get in over their heads, but not nearly as much as in the US. Of course, the society is to some degree less consumer-driven here, which has its upsides (everything is closed on Sundays, people spend time with their in-laws and family) and its downsides (everything is closed on Sundays, people spend time with their in-laws).
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Offline punatic

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Re: Credit cards
« Reply #7 on: September 28, 2012, 06:25:26 AM »
Personally, I went the 25k limit. Mainly to but animal feed. Because Well..........

http://www.youtube.com/watch?v=ii8wO0KvECI&feature=related

I'm calling BS on that.  Zombies don't talk...  shuh!
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Offline Slowbrew

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Re: Credit cards
« Reply #8 on: September 28, 2012, 06:27:34 AM »
Very true Phil.  If you all remember back in the 70's you had to pay a yearly fee to have a credit card and you were expected to pay it off every month.  Only after people started carrying a balance and the companies started to collecting the interest did they realize the cash cow they had created.

Paul
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Offline MDixon

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Re: Credit cards
« Reply #9 on: September 28, 2012, 06:28:21 AM »
Part of your credit score is the amount of credit utilized vs available. So if you have like a $1000 limit and use 50% of that on a monthly basis and everything else is equal you will have a lower credit score than someone with a $25000 limit and using that same $500 per month.
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Offline Slowbrew

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Re: Credit cards
« Reply #10 on: September 28, 2012, 07:12:36 AM »
Part of your credit score is the amount of credit utilized vs available. So if you have like a $1000 limit and use 50% of that on a monthly basis and everything else is equal you will have a lower credit score than someone with a $25000 limit and using that same $500 per month.

Another side of that little rule is that if you decide you don't want a card anymore and cancel the account, the rating agencies will assume that you can no longer afford the card and rate you a higher risk because you decreased your available credit.  So if you do the right thing for you, they will drop your credit rating.  Ironically, if you decrease your risk level they assume you are now a higher risk to creditors.

Paul
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Offline weithman5

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Re: Credit cards
« Reply #11 on: September 28, 2012, 07:21:16 AM »
I
CC companies don't want customers who payoff their balance every month since they make no money on them. 



Make less money.  they still ding a few percent on each transaction to the retailer that is usually somehow passed to the consumer.
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Offline Slowbrew

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Re: Credit cards
« Reply #12 on: September 28, 2012, 07:25:58 AM »
I
CC companies don't want customers who payoff their balance every month since they make no money on them. 



Make less money.  they still ding a few percent on each transaction to the retailer that is usually somehow passed to the consumer.

That's true.  The numbers are not as big as the interest on the debt though.  That's basically what drove the regulations on debit card charges.  Banks were charging per swipe fees and %-take offs on debit that were highway robbery because they don't make any interest on the debt.

Paul
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Offline nateo

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Re: Credit cards
« Reply #13 on: September 28, 2012, 07:38:03 AM »
That's true.  The numbers are not as big as the interest on the debt though.  That's basically what drove the regulations on debit card charges.  Banks were charging per swipe fees and %-take offs on debit that were highway robbery because they don't make any interest on the debt.

Yeah, I was thrilled when they passed those regulations. We're charged a % for each transaction, plus flat batch fees, plus flat monthly fees. We get charged more if we swipe a card again if it's declined, we get charged twice as much if the magnetic strip is worn out and we have to punch the numbers in. And AMEX and those rewards cards cost more to run too. Sadly, we do probably 1/3 of our business on credit cards otherwise we'd ditch the machine.

Thanks to Dodd-Frank, we'll be paying a capped .05%+ $0.21 per debit-card swipes for Visa/MC debit cards, and most the cards we run are debit, not credit. But, since the banks can't screw the merchants (as hard) anymore, they tried to screw consumers (if you remember last year when the big banks announced they would start charging for checking accounts with debit cards, then quickly reversed tack.)
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Offline Joe Sr.

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Re: Credit cards
« Reply #14 on: September 28, 2012, 08:15:25 AM »
I
CC companies don't want customers who payoff their balance every month since they make no money on them. 



Make less money.  they still ding a few percent on each transaction to the retailer that is usually somehow passed to the consumer.

Cash price and credit price is coming back at gas stations.  Way back in the day (late 70s? early 80s?) it was common for the credit price to be slightly higher.
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