Americans Falling Behind on Credit Card Payments at Alarming Rate

Originally posted by LightinDarkness
That would be a horrible move for the consumer, and would make the merchants very happy.

Actually it is a very wise move for the consumer. The merchants don't know the difference.

You'd lose: a interest free loan for a month, chargeback rights, credit card rewards points, extended warranty protection on your purchase, theft protection on your purchase, etc. Check cards do NOT carry the same perks as a credit card - the perks, if any exist depending on the card - are all of lesser quality than credit card perks.

If your check card has a VISA or MC logo, it carries the exact same protections as a normal credit card. Who gives a flip about rewards? Not me.

I have no problem owing people money when I don't have to pay them back for a month before they start charging me for using their money!

I do have a problem with owing people money especially when I'm assuming I'll be able to pay it back. A lot can happen in a month. Why take the chance?


Actually I encourage cash only. Retailers have to pay merchant fees, usually 2-3%, on every swiped transaction. This drives up costs for everyone as they have to recover the fees. Cash doesn't have this problem, plus you get negotiating power.

No, its a very unwise move for the customer. It makes merchants happy because your chargeback rights on check cards are not nearly as powerful as they are on a credit card. Merchants are much more likely to win disputes on check cards than they will against credit cards.

Several years ago I bought an iPod with an American Express card. About a year and half later, it broke. It was beyond Apple's warranty. I did not purchase an extended warranty. Almost all purchases on American Express ARE under free extended warranty. I called up American Express, told them the problem - they cut me a check for the exact purchase price of the iPod. Amazingly, I didn't even have to send them the broken iPod. Please show me a check card that does that.

If you don't care about getting free rewards, thats fine. I'll continue to use credit cards for everything and pay them off monthly, netting hundreds of dollars in free cash for doing something I would be doing anyways.

There is no need to take a chance. Budget. Spend only the money you have. Its a free loan for a month, and my money in the mean time is sitting in my bank account earning interest. You get no negotiation power with a merchant if you pay cash, they could care less. The exception, as I have already stated, is with small businesses or if you are buying a tremendous amount of stuff. No other merchants care. There is also a fee for using cash for the merchant - and depending on their economy of scale it can be greater than the interchange fees for credit cards. Cash costs money to store, transfer, and account for - a lot of money. Credit card transfers are done automatically and electronically, comparatively little human intervention (and thus higher costs) is required.

[edit on 26-12-2007 by LightinDarkness]

There is no such thing as a free market, or a free market based economy. The term is an oxymoron. The idea that markets can function effectively without rules and regulations is completely ridiculous. Civilization is based on the concept of justice, good and evil, right and wrong, law and order, and any functional market economy will also require an equal level of regulation by law and order.

What you get when attempts are made to create a free market concept of an economy is supply side economics, which means the laws are written in favor or businesses and investors, and workers are given the raw deal. Time and time again it has been proven that these economic arrangements do not work, and always collapse on themselves from massive amounts of debt.

The whole term "free market" is nothing but a con job.

Markets work best when there is competition, that is the source of advancement. Competition requires a fair set of evenly enforced rules. This requires rules that protect workers and consumers as well as employers and business owners.

When people finally wake up to this reality, then maybe we can move forward again as a nation.

reply to post by LightinDarkness

You apparently haven't read any check card terms of use statements. Again, if it has a VISA or MC logo, it carries the EXACT same protections as a true credit card.

If you think cash doesn't give you negotiating power, well that's just plain ignorance. For example, I just bought a handgun today. Sticker was $450. Cash price, $400. And I talked them down to $380.

For any retail purchase where you're dealing with a salesperson, you can negotiate in their commission range if you're paying in cash. Can't do that with plastic.

Your argument that cash costs the retailer more to use than credit is laughable and speaks volumes of your knowledge of the facts. You should not be relied upon for financial advice as you're only helping the credit empire grow.

The problem with credit card debt is that credit card companies game the system in their favor like casinos in Las Vegas. People get credit cards knowing the terms thinking that they will never make mistakes, and never suffer the penalties, but credit card companies know that the odds are in their favor. They send the payment notices out at different times, change the due date, all because they know that the first time the borrower makes a mistake, they can pounce with hugely unrealistic penalties in the forms of fines, which are usually several times the minimum payment requirement. This is why credit card companies make so much money on penalties.

Credit card companies operate like drug dealers and casinos, they know how greatly the odds are in their favor, and when people get into debt beyond that which they will ever pay, credit card companies should be held liable for their deceptive and criminal activities. They are nothing but loan sharks these days.

reply to post by apc


you negotiated on a handgun? You think i can do the same for my electric bills? Probably not right.....i hear what youre saying but in most places you cant negotiate a dime off the price.


Whoever posted that competetion is a necessity is correct however, competition paves the way for greed and discrimination because every company would be looking to corner the market by offering lower prices since its all about making money and not the quality of service for most corporations. There is no way getting around collusion as well especially with larger industries such as energy and automobiles. What needs to change is the social value that we as citizens place on money itself. Perceptions need to change and then we will be able to live in harmony. It is only natural to assume that peace will come about when we operate in a system that does not have any inherent discrimination or unfair restrictions. Im not a communist (at least in the negative sense of the word) but i think its BS that some people get paid so much money and even more when they get a christmas bonus....like every oil ceo on the planet. As a person in debt i have been asked several times on this site if i really needed my car.....do they really need that extra million bonus for that year? Give me a break...if i can part with my car because im in debt and i need to pay it off they can part with their BS inflated bonus. Especially those retired ceo mongrols.

reply to post by apc


No, it does not. Show me where any check card carries (1) extended warranty protection, (2) theft protection, or (3) that the level of chargeback rights are the same. One and two simply do not exist or are severely retarded on check cards, and with three the difference is obvious. If I use a check card my money is now gone, I have less leverage when I start a charge back. If i use a credit card the only people whose money is gone is the banks - and when I dispute a charge back on credit, I do not have to pay it until a resolution is reached. Also, no check cards have reward programs on par with even the worst credit card rewards.

Check cards are also worse than credit cards when doing any sort of traveling that requires a reservation. Hotels place holds on cards when you stay for hundreds or thousands of dollars "just in case" - with a debt card your money is now gone until they remove the hold (days or weeks). With a credit card they are holding other peoples money. Same thing with rental cars, etc.

If you think that a majority of merchants care about cash, that is just plain ignorance. Your one example does not reflect the entire population - stop making a sweeping generalization fallacy. Was it a small merchant? I encourage you to walk into Best Buy and ask them their cash price and credit price on their big screen TVs. You will find they are the same.

Your ignorance about the costs of accepting cash is laughable and shows your ignorance. Try getting the facts:

Shy, O. & J. Tarkka. (2002). The Market for Electronic Cash Cards. Journal of Money, Credit and Banking, 34(2): 299-314.

Facts hurt, you should not be relied upon for advice as your only propelling urban myths. Im sorry your upset that I use credit to my advantage. I will use whatever system gives me the most advantage. In this case, credit wins hands down.


[edit on 26-12-2007 by LightinDarkness]

reply to post by GUICE2


Haha probably not. But you would have been able to get a lot off your car had you payed for it instead of borrowed for it.

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reply to post by LightinDarkness


How often do you see a sign next to the register, "There is an extra XX% charge for credit transactions." I see them every day.

I'll let Visa cure your ignorance about the cards themselves:

usa.visa.com...
No matter where you're shopping, you can feel confident using your Visa check card because we're always working to keep you safe — providing multiple layers of security. For example, with Visa's Zero Liability, you're protected against unauthorized use, so you won't have to pay for fraudulent purchases you don't make.

usa.visa.com...
Debit cards have the same security protections like as credit cards. Just like credit card cards, debit cards have Zero Liability* fraud protection and dispute resolution options.

I suggest reading both FAQs if you have any more... questions.




[edit on 26-12-2007 by apc]

reply to post by apc


True and looking back i realize i should have gotten a used car but unfortunately the lenders dont give you a chance to realize mistakes until its too late. With 17% interest i never got the chance to get to a point where i had enough of the principal paid so that i could send the car back for an even exchange. Now...the car is worth a fraction of the outstanding loan and thats because i refinanced over the equity to paydown an overdue account on my mastercard where they were charging me 32% because of a missed payment causing the account to be maxed out.
Its BS and a stupid mistake by me but its unfair that im still being punished for it.

reply to post by apc


Dude just a warning.....dont bother arguing with this guy because he will end up insulting you.

reply to post by GUICE2


Ack that missed payment is why your other interest rates are jacked up. Welcome to Universal Default. Explore those options I suggested earlier. There's no "trading back" the car, but you can still sell it, make up the difference to pay off the loan, and then buy some beater for a grand or two to get by until you're back on track.

reply to post by apc


Another sweeping generalization fallacy. That you see signs saying XX% for credit card transactions does not actually mean that this represents the majority of the population. Your sample is not representative. Also, each one of those stores are in violation of the terms and conditions of the credit card companies, and when they are reported by card holders they will be taking those signs down immediately and stopping, as each time they use a surcharge is a violation and subject to a huge fine on their part. Any card holder who encounters that sign can use their card and then dispute the percent charge - and they will win every time. I have, the two times I've seen such signs.

You should also read the sources you quote. I have never said check cards do not have chargeback rights, and have already explained why its better to use credit cards in this area. To surmise what I have already said: your money is gone when you dispute a check card charge, other peoples money is gone which you don't have to pay when you dispute a credit card charge. You still have not shown any evidence that check cards are better for (1) warranty protection, (2) purchase protection, (3) renting or reserving anything from a hotel room to a car, or (4) rewards programs. Not to mention the FACT that when I am using other peoples money thats money which is sitting in my bank account earning interest until I pay it off at the end of the grace period.

You should really cure your ignorance. I had the misfortune of working for Sears during my high school and college years. I cannot tell you how many people like you walked in with a big wad of bills and thought they were going to get some sort of cash discount. Nope. I encourage you to try it - walk into Sears - or any retailer - and ask them for one. I have already said you can get cash discounts at small merchants. But that is not where most people shop.

[edit on 26-12-2007 by LightinDarkness]

reply to post by apc


And your right about that merchant fee....i started a small business and i have to pay about 5 bucks a month plus a percentage of each transaction processed via their system and i got a good deal!! Maybe its because i am a small company that they have me paying but if someone uses a credit card to purchase printing to me i take that small fee into consideration and include it in my marked up price. Its only natural, just like the banks and their willingness to change variable rates when they feel like it.

reply to post by LightinDarkness


So you agree that they have to make up the transaction fees. Good.

As far as the rest, did you even read the FAQs?

You can go ahead and keep thinking you're going to beat them at their own game. That's fine. Good luck.

What the supply siders want is cradle to grave debt. You borrow huge amounts of money to go to college, to buy a car, to buy a house, so that ever larger portions of our income continually goes to interest and insurance. You quit working for whatever reason, they take everything away from you. You no longer own anything. All of this of course pushes up the cost of everything. When you don't pay today, but tomorrow, of course you can always afford to spend more on credit.

The debt based economy is the biggest con going. They call it a free market, and deliver the sheeples to the slaughter house, and your lambs too.

reply to post by apc


Did you even read the terms and conditions?

I make a check card dispute for $100. That money is gone from my check card. I will not see it for a month, maybe two. I make a credit card dispute for $100. Other people's money is gone for a month, maybe two. I don't have to pay other people's money back to them because it is in dispute. The preferential option is obvious. Not to mention you have not shown any of the other credit card benefits being available on check cards.

I know I am beating them at their own game, and am happy to do so. They have created a system that is beatable by those who are willing to simply spend what they have, and not a penny more. So I will, and they will keep giving me rewards and increasing my credit score. They lose.

Banks use other peoples money to make their own purchases - why should I not do the same thing?

reply to post by poet1b

Not only cradle to grave. Cradle to cradle. In Japan banks are now offering 100-year mortgages. Their grandkids will be paying that thing off.

reply to post by apc


You know....under your username it says "capitalist pig" and you really just dont sound like one
All of these strategies are used to make money and only make money....usually capitalist pigs support those means no matter what the ends become.

reply to post by GUICE2


It's more to rile up commies than anything. Always hilarious when one tries to use it as an insult.

What you describe, what lenders and the central banks are doing, isn't capitalism. Capitalism doesn't use government to produce wealth. Capitalism keeps government out using competition to produce wealth. Capitalists use that wealth to accomplish goals, both personal and societal. When banks use government to concentrate power among an elite few, fascism reigns. And every swipe of a credit card only adds to their power.

reply to post by apc


HA!! I knew it.....we are slowly becomming fascist and no one wants to admit it! I was just referring to the overwhelming capitalist agenda towards profits and greed.....dog eat dog, strongest will survive kind of thing. Competition is good but only in a capitalist society will companies join together to corner a market under the guise of doing good right? They just want the profits and need to put an extra buck in their pockets. what the fed did was exactly facsist, you are correct in that assumption and its not getting any better. Yet who will bring awareness about regarding this issue? No one....not any of our elected officials and not anyone currently running for office and i dont care what they have said already. Even if ron paul wants to do away with lobby groups and government sponsered fascism he will find it to be such a hard, miserable time as president of this country and might eventually find himself with a bullit in his head like kennedy. You see....kennedy tried to put a stop to the increasing hold that the fed had on the general public and its economy in the 60s with a particular presidential order that reinstated the power to coin money and distribute currency to its rightful owner, the US treasury. It was only 5 months later that he was killed....cause and effect anyone?