Journal of the mental environment
Credit Card Usury
This Buy Nothing Day cut up your credit cards.
- Wed, 26 Nov 2008 8:38 am — Posted by Micah M. White
- | 17 comments
The average credit card in the US charges a 14.39% daily interest rate. Some credit cards charge rates over 30%. These exorbitant interest rates are legal only because of a 1978 US Supreme court ruling that allowed credit card companies to bypass state anti-usury laws. In Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp, the Supreme Court ruled that credit card companies can charge anyone in the nation whatever interest rate is allowed within the home state of the credit card company. This ruling kicked off a rush to move credit card operations to states such as South Dakota that have no anti-usury laws.
Credit card companies utilize a number of deceptive tricks to enslave consumers. For example, they often put the minimum monthly payment at 3% while charging interest of over 14%. Or they engage in the practice of Universal Default, “a term used by issuers who look at their cardholder’s history with other creditors, scanning credit files for late payments, maxed out accounts, or payments made to any creditor with a bad check and any liens or judgments against the property and then take an adverse action which result in increased fees.” In the end, credit card companies are out to make a profit by keeping you in inescapable debt and by feeding your desire for immediate gratification.
This Buy Nothing Day get out of the consumerism debt trap by cutting up your credit cards. And if you live without credit cards, or have recently cut up a card, share your story below!
Micah M. White is a Contributing Editor at Adbusters Magazine and an independent activist. Micah is currently writing a book on the future of activism. He lives in Binghamton, NY with his wife and two cats. www.micahmwhite.com
Comments
Fed Ok’s credit card crackdown:
It’s about time …
http://money.cnn.com/2008/12/18/pf/credit_card_rules/index.htm?postversi…
I turned 18 a few months ago and since then I’ve been bombarded with credit card offers. Sometimes I get a little itch for money, but I still haven’t accepted any of the offers that are piling up. Actually, I’m faring quite well. I don’t like the crowds in malls, so I don’t shop. I bought some good wardrobe staples that I know will last a long time, to avoid the everchanging clothing trends. I keep groceries at a minimum because I started a vegetable patch in my yard, I buy dairy, meat, and fruit from a local Mennonite. I use public transit. And currently, I have 0 debt. So life without a credit card is pretty damn nice.
I just received notices with 2 credit cards that my interest will be going up to 29%. I misplaced the envelope that had my last month’s payment and therefore was about 2 weeks late. I therefore am going to close my accounts to freeze the interest rate. One of the banks is Citibank. You know-the one that was recently bailed out by the taxpayers of the United States? There has to be something we can do about this. Congress needs to get moving on a Federal Usury Statute that would include ALL states in the U.S. And they need to move fast. How can we, as taxpayers, encourage them to do this?
I just sent e-mail to both Senators from California where I live, State Representative, Speaker of the House Pelosi, Senator Dodd, and both ranking members of the Senate Finance Committe and two local papers.
Maybe they’ll respond maybe they won’t - but at least now I’ve voiced my concerns.
This is what I suggest doing:
Don’t worry about the envelope (1) find the statement with the lower interest rate prior to the increase. (2) White-out or otherwise blockout your account number and make a copy. (3) Send that copy along with a letter to your local consumer affairs dept. your local representative, and your state representatives. Also, a copy should be sent to the Senate Finance Chairman, Senator Dodd.
Include a letter, that tactfully asks: Is this how our congressional leaders intend on boosting our economy by bailing out the Financial sector, only for them to turn around and give the american public the shaft by exorbitant interest rates?
While you’re at it, you might want to contact your local media. I’m sure there are others out there in the same boat where the banks, Citigroup among them have been quietly increaseing their interest rates while holding their hands out to the Feds.
Bitching and moaning on this forum or any other blog is one thing but you gotta make those who have the power and influence accountable.
As a matter of fact, I encourage everyone to do the same.
Mount a letter writing campaign — maybe we CAN do somthing!
I’m starting my letter right NOW!
Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.
—Shakespeare’s Hamlet
I’m old enough to remember when only the very well to do had credit cards e.g. American Express, where you REALLY had to pay off your balance each month. Most stores and complanies had their own lines of credit, or very liberal lay-away policies where you put a percentage of the total down each month, until you paid off the balance — THEN you got to take whatever it was you bought home.
No more. You go into a store now and ask about layaway, and they look at you as if you were from another planet.
The sad truth is that “Easy Credit” aka Credit Cards, has been mistakenly thought of as a convenience!
That’s right - all your Stop & Robs, grocery stores, department stores, etc. would rather you pull out the plastic, tahn work on a cashflow basis. Ironically, it costs them more in processing fees, etc. to allow you to use your plastic. As far as the banks go they’re more than happy to get you hooked on plastic.
Time was not long ago that Banks and Credit card companies were soliciting students on H.S. AND college campuses with easy credit. There is a lot of mony in the fees and nickle & dimes you get dinged with when you carry a balance. Ironically, paying off your credit card balances each month works both good and bad. No debt - but no long-term credit track record where you carry significant debt for a long period of time. Credit card companies and companies reviewing your credit history look at both sides of the equation when considering your credit worthiness.
Sadly, we live in an age that where even applying for a job or renting an apartment, your credit history will either make or break you.
I don’t know how it happened, but one day I realized that my debt had grown to such heights that even I am embarrassed to mention the number in a public forum. The first day I met that piece of plastic was at the Student Union of my school in 1993; I applied and got something “free” in return. Little did I know, 15 years later my debt would double, triple, quadruple into heights I never thought were imaginable. When I was a student I would pay in full each month and once I graduated and started living on my own, I was “rewarded” with credit line increase after credit line increase. Then, they trick you into transferring your balance to another card at a lower rate, however they won’t take the full amount. Now you have 2 cards, and it continues to snowball. They raise your limits knowingly to an amount that is WAY more than your debt to income ratio, and when you finally decided to consolidate to one card or a loan, they won’t approve you. It is an addiction, and for people who don’t have a lot of money, are unemployed, et cetera; they use the card as their lifeline which is a huge problem in this country. We are constantly told that we need all these things to maximize our leisure, while in fact we are turning into a dystopian society as portrayed in Idiocracy.
As for me, once I knew that my debt had doubled in the past year practically on interest alone, I knew I needed to do something about it. I quit cold turkey - got rid of all of my cards and joined a Debt Management Plan. While the large amount that is being deducted from my account hurts, I take comfort in knowing that in 4.5 years I will no longer be a slave.
BLACKSPOT && CREDIT CARDS….
I remember when I was trying to pre-order the first black spot sneaker from europe…
guess what, the only way to get money to adbusters was by credit card! I was quite enraged about that and decided not to pre-order. So, hypocrisy and all that…
Apparently you can now send checks, but still no simple wire transfer or anything.
So, Adbusters, be creative, and ban the credit card payment from blackspot. Lead by good example!
[It’s annoying enough that you can hardly get a plane ticket let alone a rental car without a credit card…]
Cheers
I’m in my late 20’s and I never owned a credit card. I sure as hell am glad I don’t have to since I live in the city. I’m single so I just rent out an apartment. I live in a city with a good public transportation system and riding a bike is a good alternative too. I only have a debit card and it’s nice to be able to take complete control over my expenses. I just happened to be thrifty so I mostly spend my paychecks on rent, groceries, utilities, and allocate a small portion towards going out to shows, movies, etc. and ending up saving a little bit for rainy days. Credit cards are like crack: once you get started, it’s hard to end the addiction to spend aimlessly. The whole thing of building up good credit is merely a bullshit tactic for credit card companies to snag potential victims. We are just conditioned by society that we need to have a car to get around, need to own a house so we can raise a family in and competitively spend so we can outdo our neighbors, friends and coworkers for bullshit respect. We need to wake up from this dream, because the reality is, we are all in deep shit, unless that person has a trust fund and rich parents to fall back on.
I suppose that if one pays of their balance every month, the main function of a credit card, as opposed to a debit card, is to help establish and/or maintain “good credit” as well as take advantage of rewards points or loyalty programmes and the like. (In order to buy more, presumably.)
Just curious though: does anyone think about privacy, and the ever dwindling occurrences of cash payments? To pay more than $50-$100 in cash is seen as rather odd at many stores
The only product that the USA makes is consumption. If the people stop shopping the US Empire falls. No money in your wallet? Charge it. Maxed out credit cards? Go get another one. Denied? Game over. The US Empire: USA Inc., is over!
I think that credit cards are a pointless convenience. From a UK point of view they seem rather silly when most of us already have debit cards which usually come with a reasonable overdraft facility for those little emergencies.
Even if one has to fly off to the other side of the world in a hurry most debit cards could probably buy you a ticket and have a bit left over for the duty free.
Anyone buying unnecessary things on a credit card when they have a low income needs therapy, either that or the terms and conditions that came with the card were just chucked in the bin….. oh yeh….doh…
Ya I thought I had it figured out, I managed to get a credit card at 12.5% interest. Then I had a streak of financing difficulty and maxed it out. Then I noticed that my 12.5% interest was now 16.5%. What happened? I don’t know. The kind lady in the call centre couldn’t explain it. All she could tell me was that I would most definitely have to pay my card down to “apply” for a lower interest rate. I’m in school full time, so making the minimum payments is about all I can afford, and that literally only covers the interest and the monthly “overlimit fee”. Every time I pay it down, the next month it’s back where it was before. It’s a dead end. The only way I could really get out of this dillemma would be to put at least $8-900 on it and then make at least 1.5 times the minimum payment every month. My point is that it’s very tempting to aquire and use a credit card, but they are a trap unless you have the money to pay it fully every month, in which case it would be of little use. I’m paying $100-150 every month in interest. That money would be pretty handy for school supplies or groceries right about now.
A simple concept, if you cannot afford it until a later date—— don’t buy it.On any credit card made, the rates are ” subject to change”. So be careful, because they can do anything they want at any time, regardless if you “pay on time”.Your rates,terms,grace periods can change any and given moment.In other words, lets say you buy something on the 2nd you plan to pay for it on the 15th because you have 0 % interest.On the third, they could change and jack up your rate to 30%.So that item you bought for 100 is now 130 within a day, and can keep escalating until the 15 th when it’s time to pay——-what a merry christmas—-hope the item was worth it, and I hope they never decide to do that to anyone.
Credit cards are not trying to “enslave” anyone. They are firms that seek to make a profit by providing series of goods and services to the buying public. Given their vast popularity, it seems they’ve succeeded. Of course, credit card companies have been engaged in gotcha capitalism with high interest rates, the universal default bomb, and low minimum payments, but it is a weak form of gotcha capitalism that the savvy customer can dodge by simply paying their bills on time, in full when they are due. I have multiple credit cards and have not once paid a dime in interest after several years of using because I paid the bills in full during the grace period.
What you guys have to realize is that customers drive consumerism because they like it and credit cards companies exist because of popular demand. If people weren’t at least satisfied with their credit card companies, they would not exist or there would exist a demand for a “Black Spot” credit card from Adbusters. Now people complain about them, but given their utter refusal to address the problem in any serious manner indicates they’re all right with how things are.
Hey “Wise,”
What’s the deal with your irrational one-man-crusade against AB?
I mean, everything you post is based on an assumption that consumption is good and you just expect everyone to share that idea. But most people who come here aren’t going to buy that.
Why do you even bother to come here?
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