Credit Corporations vs. Consumers-The Great Stand

Many will write blogs and articles this time of year offering suggestions for financial New Year resolutions. I have composed such a blog and will most likely post within a few days; however since great change is in the air for the year 2009, I have decided to look ahead instead of looking back at 2008.

Within the past couple months, battle lines have been drawn, positions taken and economic philosophies declared-Capitalism vs. Socialism, Credit Cards vs. Cash, Good Debt vs. Bad Debt and now Credit Corporations vs. Consumers. You might find this a bit dramatic, but voices are sounding off and these voices could greatly affect the future state of our nation.

Finally, after many people with good credit scores, started complaining about credit corporations on December 18th legislation was passed to reduce the at-will credit abuse from credit corporations, no interest hikes, no double billing cycles and quicker notification in change of agreement from credit corporations. Sounds like a break, we consumers needed. Unfortunately we have to wait until July 2010 to see the benefits.

But the credit card corporations retaliated saying this is bad for the economy, since our economy is based on consumer spending and in event, creditors started closing consumer accounts, denying charges and issuing credit cards. Will there be no more credit for Americans? Have we lost our credibility?

This leaves Americans in a financial credit quagmire. Do we continue to drop our pants to indiscriminate fees and penalties of creditors, or do we go debt free, pay with cash and risk a greater free market meltdown? In laymen’s terms, do we continue to be abused, or stand up for our debt freedom and risk national consequences? Surprisingly, this problem is very feudal.

“Let them eat cake!” Marie Antoinette historically yelled to the revolting peasants. Rising Bolsheviks shot and killed the Czar and carried Russia into a worker’s state-Communism. And to travel further back into time, King Alaric of the Visigoths (ironically a Barbarian, but not the one made famous by Capital One) freed the western world from the domination of the Romans, only to plunge Europe into the Dark Ages. What is the cost of economic freedom and are we prepared to take that journey?

History tells us, plunging into sudden change-bad idea, but there is an obvious need for change. What plagues American today, is not the foundation of our economy, but greed and corruption. Our goal should not be to become a cash only social society, but a smarter and wiser one. There is absolutely no need for creditors to make an obscene amount of money off consumers and no need for consumers to overspend on credit. Our goal should be no more jets for corporate CEOs and greater fiscal responsibility for Middle Americans. Heck, we are a nation founded on equality for all, isn’t it about time we practice what we preach?

The debt we face now is more than financial. We are indebted to our future.

American Express Receives Government Bail out

Today's blog started off as a rant and raving of news of a government funded bail out for credit card companies. There is nothing that upsets my stomach more than reading this morning that American Express will be receiving bail out money from the government. As per an article on economyincrisis.org American Express will receive $ 3.39 BILLION dollars, not to mention Capital one and Discover will receive $3.6 billion and $1.2 billion.

So as the fire inside me subsided and I was of clearer and more inspired mind the words, "I give to the greedy and not the needy," came to mind as a slogan for our Government. This of course re-worded from the En Vogue song, appropriately titled, "Never gonna get it," especially since I believe credit cards are going out of vogue. This consumer for one, is okay seeing a large, greedy credit card company suffer and try to make due. Heck, no one was offering out handouts to consumers in debt, why should we hand out to the creditors?

These are the very same companies, who have denied consumer charges and are closing consumer accounts…and even more so. I’m sorry for being so blunt, but this is a kick in the ass to consumers, who have been at the mercy of these credit card companies for so long and the main question I need to ask, is who is going to bail out the consumer? Who is there to help us, when we’re in debt, when we can’t pay our bills and when we may go bankrupt?

I have been stressing in several blogs the gross amount of money spent on advertising. Yes, I agree, there is a certain need for advertising in every company, but look at the exorbitant costs these companies are paying toward advertising. Before these companies receive a penny, they should be forced look at how money is allocated in their corporations and see if some temporary cuts and realignment of funds can be made.

Secondly, and most important, should these companies get bail out money from the government, we as the American voters need to make damned sure legislation is passed to protect consumer rights. Now, after all the abuse and extorting of money from consumers these companies are getting our tax money, we need to be sure they adhere to OUR RULES. Let’s make sure these creditors work for us.

Economyincrisis.org has a link to write to your representative. This is what a democracy is for, express your opinion, or else swallow the consequences.

Credit and Credit Cards Going out of Style

Every day I check my email or mail box to find several credit card solicitations or some marketing firm pimping free credit reports or quick cash. Here’s the deal, we are in a credit crisis, people are losing their jobs and companies are going out of business. Many folks say consumers need to be more responsible with their credit and finances. Others encourage we take classes to learn fiscal responsibility. I ask how responsible is it for creditors to be selling credit during these difficult times? Now granted I probably get a slew of these solicitations because I click on them-to find out their schemes, but let me breeze you through some email slogans, “Need Cash, Women’s Pay Day Here to help,” and my favorite, “Bad Credit, No Problem.” This is like selling alcohol during the prohibition years, or chocolate to those who are dieting.

Here is my thought and it is all about supply and demand. Years ago, everyone wanted and used credit like it was going out of style, but as fashion goes out of style, so does goods and services. Take milk men for example. There was a time, not too long ago when a milk man delivered milk to your front door. Now, not only do you have to buy it in a store, today milk is considered bad for you if you’re lactose intolerant. And what about those products we couldn’t live without, the Walkman, the CD player. Maybe we are coming to a time in our society when credit and all its accessories are going out of style and human ingenuity and creativity will take us to the next great phase in our culture.

I remember once when author Edward Albee spoke at my college. He said something that stuck with me all these years. “Artists are the first to see the wave of the future, Businessmen are second in order to capitalize and politicians are last, if they ever see at all.” My point is we are investing a lot of money and energy in a “service” that is currently not benefiting our society very well, i.e. credit cards. Not to mention, consumers want to be freed of it, yet big business continues to shove it down our throats. This all comes down to making money for credit corporations. Responsibility tells consumers to use credit sparingly, but if we do so credit companies will not be as rich and powerful.

I’m not suggesting we cut up all credit cards and toss them in Boston Harbor, I’m just saying maybe businesses can look at how they are allocating money in their firms to find better ways of maximizing efforts that benefit all, instead of investing in advertising to sell us something we don’t really want and in many cases, bad for us.

Economics of Life

I wrote this blog in response to an article about more and more high school students interested in studying economics and I immediately reflected back to a time in college when I studied economics. My professor (and I do not lie) told our class on the first day, “If you do well in this class there is something wrong with you.” I didn’t realize my economics teacher also a taught psychology, but I didn’t complain. Tuition was really too high. I was getting a 2 for 1 education, and that is good economics.

He continued to tell our class, that he preferred to teach us socialism, but because of our nation’s lust for capitalism he was required to teach us that. (I swear this is the truth.) In the end I was happy with my education in which I scored a B. Okay, so I guess there is something moderately wrong with me, but I was glad to receive a fair and balanced education between the likes of capitalism and socialism. Yes, it is possible the two can work side by side in perfect harmony. It is of course the extremes of both economic philosophies that get us into troubled times. There are those who believe captialism and socialism cannot work together, but then I gather they have never been to Europe.

Sadly, kids in our country today feel that in order to be successful adults they need to study economics, i.e. money. We spend so much time reading about finances, buying 500 page books to learn how to manage debt and read countless articles and blogs that really all say the same thing. When it comes to fiscal responsibility here is what you need to know.

• Spend within your means.


• Pay your bills on time.


• Put part of your salary in savings.


• Use credit cards sparingly.


• Live simply. Don’t overindulge on things you can’t afford.
  

Look here, it doesn’t take a financial mastermind to figure that out. It doesn’t require mind numbing economics classes. Trust me although I got a B, it was mind numbing and all I can tell you is during my final I had “Swing Out Sister's BREAK OUT” (an ironic song for a fashion design major) repeating in my head. I know there will be many who will disagree, but as I checked my daily George Bernard Shaw quote, “If all economists were laid end to end, they would not reach a conclusion.” If it was good enough for good ole George, it is good enough for me.

So I guess my crackpot, most likely pot smoking, hippie economics professor (who was a dead ringer to Paul Newman, which is why I probably earned a B) was right. It’s not about being financial master minds. It is about common sense, moderation and understanding the value of life. Somehow to me it seems that most people have a harder time learning this lesson, then economics. But economics classes and books cost money and is that really good economics? For some I guess, if it is not in a text book, how could we ever learn?

Creditor Retaliation

Probably not the most festive of blog subjects for this holiday season, but in reading many articles, blogs and comments there is a great buzz brewing over creditors and the most recent legislation. For a couple months now I have seen a rift brewing between those advocating using cash and debt cards and those promoting credit cards. I realize that many people may find this trivial, but it is very significant to our nation’s economy, since our entire national economy is built on credit.

Last week, as many are aware legislation was passed to restrict some abusive practices of creditors. It is a law greatly overdue, yet at the same time we will not see its effect until July 2010. Last night I read an article stating this legislation will be bad for our economy and bad for America. Let me preface before going into the reasoning. This article was written by a reporter in Bangalore, India-a place where most credit corporations outsources customer service agents. When you have a question or want to challenge your bill, you must talk to someone who’s second language is English. I’m not even going to address the fact of taking jobs away from Americans.

The article expressed the subject much more eloquently, but I’ll describe it as creditor retaliation. Since creditors will no longer be able to hike interest rates, deploy double billing cycles and more, they will stop issuing credit, or at least be more selective. Others like Capital One and Discover will close accounts and American Express will deny consumer charges. The Bangalore article stated that without the ability to raise interest rates, creditors would lose “flexibility”.

As a woman, I have excelled in the art of reading between the lines. Here is what creditors are saying, “If you don’t play by our rules, you cannot play at all. You either accept the rules per our discretion, or no more credit.” Ooh, I’m shaking in my shoes. No more debt, how could you? This to me goes back to elementary school. You report on a bully to the teacher, the teacher reprimands the bully and the bully retaliates by beating you up after school. It really isn’t much different.

Here is the greater problem. Our economy is built on consumer spending and spending on credit cards, and many creditors have fixed it so we pay a hefty price for spending on credit cards. Now that the bottom has fallen out, consumers are spending wiser and with cash/debit cards, but where does that leave our economy? The free market spending machines comes to a dramatic halt when consumers stop shopping. For the best post of the day, Huffington post on Laissez Faire Capitalism.

American Express-Maker of Dreams or False Advertising?

The current American Express commercial promotes well known celebrities suggesting their success has something to do with their American Express card membership. And unfortunately for me, some of the spokespeople are those I admire, Dave Matthews, Michael Glaser, and Gwyneth Paltrow, not to mention it is somewhat of a disgrace to think American Express was responsible for Tina Turner leaving Ike. Let’s face reality, shall we? These people achieved success due to their own hard work and talent, and by no means American Express. To say that using your American Express card will make you famous, than I say hell, we all have a shot at being famous. I personally, would owe my success to Visa, but that is another blog.

Throughout the past week or so, there has been an onslaught of consumer complaints about American Express, mostly for denying charges. One article that prompted this blog was from a young man who had his credit limit cut in half, because American Express doesn’t like where he shopped. So let me repeat, because it bears repeating-American Express cut his credit card limit because they (American Express) didn’t like where he used his card. Where did he use his card? He used his card at Amazon, Ruby Tuesday, Wal-Mart and Starbucks. Apparently, one or more of these companies a poor repayment performance back to American Express. So, a consumer was being penalized for the performance of a retail store.

This is not the first story of I read about American Express. Another story recanted the saga of young entrepreneur using his American Express to travel. While on the road, American Express started denying charges making it difficult for the man to pay his hotel room and to even get home. This does not sound like much of a benefit.

Now granted, all this is due because of the state of our economy. Business is business and they have to do what it takes to survive, but a company that promotes itself as, “believing and offering freedom to its consumers,” is false advertising, especially when consumers can’t even shop at certain retail stores without having their limits cut and are denied charged to come home from a business trip.

I do have a suggestion, for all these credit card companies in this credit crunch. Instead of hiking the interest rates of consumers, slashing credit limits, denying charges, perhaps you can cut your advertising budgets. I imagine these very talented celebrities you hired for your commercials, number one, celebrities don’t need credit and two are probably very expensive. Cutting advertising would be a great place to start and that savings could be given to your costumers. So it really provokes the question, how much does American Express truly care for its costumers or is it false advertising?

For more visit -www.oohbabycompoundme.com

Credit Card Corporations-Thieves of Reform

It was a minor victory yesterday for all who are vying for credit card reform as yesterday a bill was passed to stop random rate increases, double billing cycles and basically unfair creditor tactics. I say minor, because this bill does not take affect till July 2010. So, folks we have another year and a half to be taken advantage of by the creditors. How much damage can they do in a year and a half? But today, the article that caught my attention is Discover and Capital One are taking it upon them to close inactive accounts, which brings me to a personal story with Capital One.

About six months ago, when I called to close my credit card account which I paid in full. At that time, I was passed to sales rep that was there to talk me into keeping my account open by offering me a sweet deal of lowered interest rates, etcetera. When I declined, he hung up on me and did not close my account.

To my surprise, believing my account closed, I received a bill for Capital One’s monthly fee and a late penalty for a charge that appeared on my card AFTER I asked for it to be closed. When I called, highly irate, I might add, they said, “First my account was never closed, even though I called to do so and I had to hold a balance of zero for a billing cycle for a month in order to officially close my account.” My response was, “How convenient for Capital One.” The point here is if I call to close the account, it should be closed. There should be no monthly waiting period for Capital One.

I made sure no charges would appear so I can close my account. Then Capital One changed my billing cycle and charges of the past month appeared on my next bill, so this time when I called they told me my account had to have a zero balance for two billing cycles. Bottom line, believe it or not, they were changing the rules for closing accounts to keep my account open.

Today, my account is most likely listed as “inactive.” So I ask, now will Capital One wish to close my account. As per Bloomsburg article, Capital one has been “very aggressively” closing inactive accounts. I must say, they were very aggressively trying to keep my account open. Now that times are tough for credits in this credit crunch, Capital One is closing them.

These rounds back to yesterday’s credit card reform. Yes, relief is on the way for consumers-in 2010. I am not convinced, as you can see still credit card corporations are twisting the rules and regulations on consumers. To me, this is like house burglars, you may spend a lot of time and money keeping predators out of your house, but if thieves want in, they will find a way to get inside. Credit Card Corporations will always find ways to make money of consumers.

Credit Score Snobs

Well, it’s not like I’m surprised, but all that talk during the election of “elitism” and “intellectuals,” I have to believe there is some truth to it now. I have been following the consumer stories on a certain web magazine and one of their articles was to vote on your credit score. I will be open, as I usually wear my heart on my sleeve, I might as well wear my credit score as well. My credit score, for which I am unashamed, is 683. Yes, I admit. I am average.

What I found on this particular site from the commenters, in which snobbery reigns supreme because you must “audition” to comment is that the user’s credit scores averages above 700. One commenter boasted, “I would have expected that commenter on X site would have higher scores then the norm.” Apparently, people who read and comment on X site have a superior intellect and financial management skills. Congratulations, you must be so proud.

To be honest, the reason for my average score is I had the audacity to want to experience life. Yes, credit cards funded traveling, writing conferences and as Visa promotes, credit cards have funded my dreams. Often, when you have grand dreams, you don’t have the funds to support it and obviously, there were times I couldn’t pay back in full or sometimes, on time. And I must apologize; I have to say I have much better things to do then obsess over money. I’d rather write.

But regardless, is it fair to be snobs in regards to credit cards and credit scores? To me that is like boasting a higher education, bigger house, better job. Does it really make you a better person? Heck no. The truth is we are all in this credit boat together. All our scores are inter-connected because they affect corporation’s fee and interest policies. This is becoming more so true today, when creditors are hiking interest rates on surprisingly those elitists would good credit score. So does it really matter in today’s world?

And there is ignorance to this credit score competition by some. There are many reasons for debt and low scores; loss of jobs, natural disasters, illness. These are things we cannot control and many times cannot afford. Unfortunately, the thing that puts us into debt is life. I guess these credit score snobs can be thankful, they live uneventful lives.

The best practice instead of judging other’s by their credit scores is to seek fair regulations from credit card corporations who often times take advantage of us who spend a little more on our dreams, or have adversity that costs money. Instead of comparing credit scores and such we need to address the bigger problem, why credit corporations are in bed with our senators and which is why we can’t get regulation laws passed. For more information, please read attached CNN article.

THE CHRISTMAS PAYOFF

Often times when shopping for the people we love, we fail to realize the true cost of purchasing with credit cards. Let’s take for example, Jimmy excels in sports and this holiday season you want to encourage his athletic ability by buying him that Nike Air gift pack for $278.00, realize that if you have an average APR of 10% and pay $100.00 on your credit card bill, that Nike air gift pack will actually cost you $285.00 dollars. You’re probably thinking, big deal it is only $7.00 difference.

But it’s the holidays, and we can’t forget about our little fashion icon and celebrity wannabe Susie who wants the new Jessica Simpson weekend back for $142.00 and she desperately needs to the new Ipod shuffle for $199.00. So retail price alone, including Jimmy’s Nike Air back you are looking at $619.00 so far.

Don’t forget Johnnie. He wants the walking, talking Elmo for $162.00. How can you resist his whining and crying? You can’t. But you don’t stop there. Christmas is about giving and the more the better, so you buy a Nintendo Wii for the kids to share for $159.00. And as your shopping through the mall you are blinded by a wall of color. Gap sweatshirts for all at $50.00 a piece you are talking another $150.00. Now you are looking at a total spending spree of $1090.00 on your credit card.

Taking the average APR and monthly credit card pay off listed above your total spending for Christmas is $1204.00. Congratulations you have spent and additional $114.00 and at $100.00 dollars a month credit card payment, your 2008 Christmas shopping spree will take you until Christmas 2009 to pay off. That is priceless. And that does not include fees, additional purchases throughout the year. Merry Christmas you’ve got debt. That’s the price of love, right?For more information on how you can see the real cost to your spending. Check out Quicken’s real cost calculator

Mayhem and Merry in the Land of Excess

So today’s blog is inspired by my comment that was rejected by The Consumerist, in response their article, I love the recession because things that suck are dying, I thought this would be a perfect place for me to comment or question. And while the majority of the conversation revolved around SUV’s, mine was Breast Augmentation. Here was my comment.

“My question is do you think we’ll see a deflation of breast augmentation during this recession?

I can understand how perhaps someone could find rude or crude or perhaps way out in left field. But honestly, the comment has a greater relationship with our economy then one might think. Now personally, I really don’t care too much. It is a women’s right to decide on plastic surgery. I do know however that some women invest more money in their breasts to make a living then on an education, and that is a sad state in our nation. My point however derives from one of my favorite books, and sadly I must profess my pathetic nerdiness and that is Thorstein Veblen’s Theory of the Leisure Class.

Veblen’s theory of “Conspicuous Consumption” was describing early 20th century Aristocrats displaying wealth through women with extremely thin waistlines, and men dressed as Dandies. This at the time was extremely hot! It is about displaying wealth in excess. We saw this again in dramatic form during the Reagan era in the 1980’s. Women wore garments with ridiculously big shoulder pads to indicate power in a man’s world. Remember Robert Palmer’s “Addicted to Love”. And remember the big, “Flock of Seagulls” hairstyle. Dude, I loved the Flock of Seagulls. They were so sexy. Big is better. Big is an advertisement for wealth.

Where is our culture today? SUV’s and even Hummers as discussed in the Consumerist is one idea. The other is the value of a gross superficiality, whether it is breast augmentation, or any plastic surgery for that matter, diet pills and Rogaine. And now I must introduce, Billy Crystal’s Fernando, “It’s better to look good, then to feel good,” line in the conversation. You look marvelous! We invest a great deal of money in enhancing our exterior with little investment on our interior. So now what is to happen when our nation’s economy splats like an insect on a windshield? Do you think it is time to reevaluate our values and ideals?

In dramatic fashion, we are discovering our values, materialism and superficiality are causing the nosedive of our economy. Our auto industry failed because of lack of vision and staying current with the times. Americans wanted big and outlandish gas guzzlers. Banks failed, lending far too much money for us to invest in things we can’t afford. We needed to keep up with the Jones’.

Perhaps our economy is floundering because all of us are such big boobs we are failing to see the downfall of our conspicuous consumption. Or we can follow Donald Trump who suggests, “If laid off, try plastic surgery, because if you want to make money, you must look good.” This is not a question of what products will disappear in a recession. This is a question of our values.

Larry, Moe and Curly of Credit

No, I am not referencing Visa, MasterCard and American Express as Larry, Moe and Curly (Stooges MasterCard commercial) of credit. Nope, it’s us, the consumers of credit that are the Stooges. And I say this out of my own personal experience. You see, for a couple years now, I have been questioning the credit corporations and the credit system. I’ve written a book, I talked about it and berated the creditors for their unsavory practices. And for years, friends, colleagues, creditors and yes, even book publishers gave me the proverbial CRACK! POW! on the head with a wooden mallet.


The inspiration for the Stooges references comes from an article written in the Providence Journal, “Consumers speak out on the burden of debt.” One consumer (of professed good credit) quoted when realizing a creditor was raising his interest and changing his terms without reason, “It should be illegal. How do they get away with it?” BANG! CA-POWIE! And then I had a good chuckle. That was funny.


“At our discretion,” is written in the contract. “At our discretion,” it is one of my favorite all time phrases. Quite catchy, has good ring, but yet direct to the point. It means, that at the creditor discretion, they can change your terms, interest, fees and billing cycle without your knowledge, consent and even without any reason. And yes, they can do it to those of good credit as well. How do they get away with it? Simple, it is in the contract you sign when you receive your credit card? You all know that fine little print you toss away when you receive your credit card. It is legal because you sign and you accept the terms. BACK ATCHA! BO-ING!


For many years, it has been fine to SMACK those with credit card debt, and those who suffer from financial illiteracy, but now the financially savvy are getting caught in the trap and suddenly it is not fair, and it is not funny. Suddenly, it is illegal. Maybe it is what it takes to revise the system. It’s always okay to punish the bad, but when the good are being abused. Now there is trouble.

Credit Identity Crisis

Our individual identities are the foundations of our personal experiences and consciousness. If our identity is self-created, how is it possible to someone to steal? Can anyone truly know us on that deepest intimate level? Yet so often we hear the phrase identity crisis. Psychologists pinpoint identity crises begin in our teen years. Yes, I too went through a Rene Descartes and Frederic Nietzsche phase. Who am I and why am I here? The question tormented to me until I had my first tequila shot and afterward, I really didn’t give a shit. Just pass the next round. Alcohol is a thinker’s best friend.
In today’s uncertain world many adults search for their identity. But what happens when someone has stolen your identity? Does it really make a difference, when everyone has to look and be like everyone else? How many Brittany Spears do we need anyhow? So in my philosophic perspective, how can you steal something intimately unique and if you’re still searching and haven’t found your identity. How can you be sure what they have stolen has any value? There have been times in my life where I say, heck, go ahead take my identity. I’d be happy for you to be me.
Today’s identity breaks down into a social security number, bank accounts and credit scores. Why, instead of saying your name, just rattle off the last four digits of your social and we’re good to go. Again, at times, I’d welcome a fool to that information, because the credit card won’t work for your purchase and my credit has been too low to buy anything significance. So good luck to you.
Regardless of identity being personality, character or a series of numbers it is all very personal and intimate and when stolen we feel vulnerable. Somebody has taken something from us at the deepest level. How do we protect ourselves? There are many people out there offering protection from this threat. One such company offers help to protect a child from identity theft. Okay, there is a sucker deal for you. Number one, a child is still developing and identity and second does not have credit. So what is there to steal? What they may be selling at a high price is protection, but they are also promoting fear. This goes back to playground 101. What do you do when a bully picks on you? Do you cower in a bathroom stall, pay a bigger kid to protect you, or stand up to the bully face on?
He’s a lesson my mother taught me, no one can hurt you if you don’t let them. Their fear tactics won’t work if they can’t scare you. And what, what if the worst happens…someone steals your identity? You do what it takes to get it back and then you move on with life. It is of course your identity, and in your identity to you want to be afraid?