Unlike our gullible conservative and libertarian friends who got the vapors at the slightest bit of agitprop from the banking and credit card industry, Ron Lieber looked at the threats and has decided much the same thing I did:
For months now, the card companies have been threatening to cut rewards programs sharply to make up for revenue lost because of the new restrictions.
My guess, however, is that this talk is just so much saber-rattling.
Card companies want to make money, and big spenders help them do it, even if those cardholders do not go into debt.
***So will credit card companies kill reward programs or drastically scale most of them back? Of course not.
“If you strip away the reward component of a credit card, it’s essentially a commodity,” said Rick Ferguson, editorial director at the loyalty marketing company LoyaltyOne. “The reward is what gives it its personality. It works from a branding perspective as well as a mechanism to influence customer behavior and consolidate spending on a particular card.”
That last part is crucial. People who spend a ton generate fees galore from merchants, and that money helps the card company stay in business. So you may soon see card companies giving away more goodies or lowering annual fees for people who hit certain spending thresholds each year. American Express already does this on a number of cards.
Credit cards will still be a very profitable business, and the thing you need to remember is this:
Credit card companies have shown they will do anything for a buck, and if they could charge the people who carry no balance an annual fee, THEY WOULD ALREADY BE DOING IT.
Napoleon
That is absolutely the most important thing to point out. You have to have your head completely up your ass to think that they are not charging it now from some sense of Noblesse Oblige, but so help them God, if we start regulating them they are going to stop treating us all nice.
over_educated
The “we will start charging annual fees!!!!” threat is a complete paper tiger… You are going to drive away your best customers in the middle of a recession? Absurd. In fact I suspect you will see greater competition for these customers. Sure you won’t make money off them directly, but the guaranteed vigourish the companies get from merchants is gold.
The Grand Panjandrum
For once Congress appears to NOT be playing the part of the idiot towns people, to the credit card companies Sheriff in the movie Blazing Saddles. Every time I read about the
boohooingdire warnings of impending doom from these rat bastards I was reminded of the scene where Cleavon Little puts the gun to his head in front of the towns people and warns everyone to stand back or he’s going to shoot the … well if you’ve seen the movie you know all about it.If they really are too stupid to make money with a few reasonable rules in place to protect consumers then they shouldn’t be in business, should they?
Punchy
@The Grand Panjandrum: Yes, the Senate just delivered a candygram for
MongoCC companiesWilson Heath
My checking/debit card account was with Washington Mutual, and now it’s with Chase. When they issued a new debit card, they included materials in the envelope for a promotion that encourages you to select credit to use it. The incentive is a chance of the purchase being free. The gain is that the merchant fees are higher for credit than for debit transactions. I use mine as debit because I feel more warmly towards the merchants I use than towards my bank. Frak them.
Krista
And that is exactly right. Without those rewards, what’s to really differentiate one card from another? The issuing financial institution? Don’t make me laugh. It’s all about the extras, be it a lower interest rate, or Air Miles, or cash back, or GM points, or what have you.
Even if 7 different banks all offer Visa, they’re all different kinds of Visas, and there is no way in hell that the banks would agree with allowing Visa to strip the perks off of their respective cards — it’s the only way that they can differentiate their cards from each other in the marketplace.
greynoldsct00
The cc companies are the ones who offered all that award crap to attract customers and then inflated credit limits to keep them spending. I can’t see them adding annual fees and taking away too much, they’d lose out. Greed talks.
Bootlegger
@over_educated:
But they’re already doing it by raising the rates on people with balances. I’ve opted out of two credit cards and moved the balances because of this. They were making money on me, money in the bank because I pay on time every month, now they got zilch. Idiots. You’d think that people who espouse the glories of The Market would understand how it works.
JGabriel
@Wilson Heath:
Ditto. I do the same. Great minds, and so forth.
.
Bootlegger
@Wilson Heath: There is a higher fee to the merchant if its credit than debit? I had no idea. Debit all the time it is then.
over_educated
@Bootlegger: CC companies have tried raising rates on me (even though I don’t carry a balance). That is quickly rectified by simply calling the company and demanding they lower my rate, which they invariably do. It’s just easier than the hassle of getting a new card, but requires a small degree of vigilance.
Poopyman
Surprise! My last bill from the MegaBank of Wilmington DE includes a $40 annual fee. I carry no balance. FICO is 800+.
So yes, they already are doing it.
taodon
Last year, our business began to have a little trouble due to the economy. While we were developing a strategy, a credit card payment was lost and forgotten for whatever reason.
When we received our next statement, we also received a letter stating that our 6.9% Chase credit card rate would be raised to 29.9% in 30 days, and our credit limit would be dropped from $50,000 to $10,000 – just above our balance. When we inquired as to why it was so drastic, we received “You shouldn’t have missed a payment,” despite never having missed a payment before. When we moved money around to deal with this card, they wanted to charge us a $30 service fee to close our account.
To me – that’s not a corporation – that’s organized crime.
edmund dantes
Not a smart idea. You are giving up a lot of protections of the credit card, and when there is a mistake you are out the money (even if you have bills to pay) until the bank figures out whether you actually incurred the charges.
Plus the bank doesn’t really care as much when it’s your money that might be wrongly taken versus them losing money when it’s wrongly taken on a credit card.
Edit — Definitely avoid CC if you can’t manage money though since they can eat you alive, but the reality is there is no reason not to use a CC if you know what you are doing. The protections work a lot better for you than debit, and it’s not your money directly on the line when things go wacky.
The Other Steve
The most evil thing ever is the Visa Check Card.
It’s like a credit card, except the bank doesn’t have to carry any balance. Merchant still gets charged up the wazoo though because it’s a Visa transaction.
And when you lose the card and the crooks wipe out your bank account. Sure they say you’re only liable for $50, but the truth is in the meantime you’ve bounced a dozen checks and owe overdraft fees at $25/pop on those… while you’re trying to get the money back in your account.
John Cole
@Poopyman:And your response was to…
JGabriel
edmund dantes:
Last time I checked (which, granted was over a decade ago, so the laws may have changed), if there’s an error in your bank balance, say because you left your ATM card in the machine and someone else withdrew funds, the bank has to replace the funds within 3 days of your complaint. If they drag their feet on it, ask for the compliance officer. I know, because it happened to me. Fortunately, I had a friend who was a bank regulator and explained the rules to me, otherwise I’d have been out $300.
As far as giving up protections of the credit card by using the debit feature instead: Huh?
People can forge your signature with the credit function, but with the debit function they need your PIN. Seems inherently safer to me.
.
Poopyman
More a response/addendum to Napoleon @ 1. The fact that it’s not a threat if they’re ALREADY doing it.
Zifnab
I got a letter in the mail from American Express. For $150 / year, I can own a Gold Card with a 7.99% interest rate. Yeah, um, fuck you very much. I’ll stick with the debt card on which I pay a 0% interest rate and spend exactly $0 / year in fees.
Laura W
So here was my response just now on the phone with Orchard Bank, who carries a Houshold Bank Mastercard I’ve had since 2003. I mentioned it in last night’s Credit Card Reform thread, which was very useful and interesting.
I’d been notifed that although I carried no balance on this for a year, I’d be assessed the $39 annual fee next statement. After getting the scripted stuff from “Ann”, I spoke to “John”, acct. mgr. The best they could offer me was to cut the $39 in half (“We can meet you halfway.” HA!) and drop my 18.90% to 13.99%.
John seemed pretty broken up about losing my business after all this time, and was concerned enough to remind me that my FICO will drop if I close the card. Steeled by the sass I picked up in last night’s thread, I closed the acct. Today. Yay me.
Edit: Since I’m so sassy, I’m now going to call my health insurance carrier and demand they process those lab tests as In-Network. I had no say about who they were sent to.
Smudgemo
On nothing more than principle and animosity I have begun reducing the use of my credit card. Originally I stayed balance-free with a debit card, but eventually I switched to credit so I had far fewer transactions to reconcile each month from my checking account.
Now I buy more locally, support the little guy and pay with cash. Screw the banks and big corporations. I’ll still use the card for internet purchases or for transaction protection (questionable merchants, fraud, etc.), but that’s going to be it.
My bank is fairly small, local and solvent. And I only use their ATMs to avoid the $2 charges (even though they have historically reimbursed me for those.)
ramster
I’m one of those “deadbeats” (i.e. a good customer). I have a card with no annual fee and 1% cash back. Between personal use and business travel, I put about $20000 a year on it. They collect 2% from the merchants on all those sales. About half of the spending is in other currencies, on which they collect a few more percent on the exchange. These jerks never do a deal that they lose money on.
Douche Baggins
“Credit”: Merchant runs your card, pays 3-4% in processing fees to Visa/MC/AmEx.
“Debit”: Your bank pays the merchant directly and usually immediately via EFT. No service charge.
That’s why many merchants offer discounts for cash or check; their CC revenue is slated to be skimmed already.
Always, always use Debit. The only situations where you wouldn’t is if you’re overdrawn, or have a deposit coming in tomorrow; the 24+ hr lag in processing means your funds can’t be verified, but they’ll front you the money – after all, it’s a credit card. (And because these vultures have conflates ATM cards with credit cards by virtue of the ubiquitous Visa/MC logo, they’ll hit you with penalties and charges
ifwhether or not you stray off the highwire that is modern American personal finance…blackfrancis
The problem with the credit card industry as a whole is that it’s business model is broken. The real money is made on the late fees/overlimit fees, and the ability to raise your interest rate for as close to no reason as possible.
To have your profits generated because your customers mess up and miss a payment is insane. The greed is strong in this one.
malraux
@JGabriel: When you use a CC, all warranty periods are doubled. If there’s a dispute regarding a purchase, CC companies are generally in your favor. Often, there’s theft protection (ie, if someone steals your new ipod, your credit card company will replace it), travel insurance, etc, all automatically.*
*: terms and conditions may vary.
jimBOB
Couldn’t the Feds issue a US Gov credit card with stable interest charges and no fee? Is there some special reason these things have to be issued by a bank? And given how much the bank cards skim off each transaction, the government card could help pay down the deficit.
In my small experience of trying to make good on credit card rewards programs, I’ve yet to come across anything where it made any sense to bother with it. I’d rather they just lower the fees and provide a clean transaction.
Fraud Guy
Douche Baggins,
Actually, there is a charge for PIN debit–however, it is a flat fee (usually capped @ $.45, depending on the debit network). Credit card fees are (for card swipe) @ 1.4% + $.10, and debit @ 1.25% + $.15. For low $ trans (under $40), it is cheaper for a merchant to take debit) for very low (under $15) credit, and anything else, PIN debit.*
In addition, to y’all, debit does have different protections for consumers than credit (Reg E vs. Reg CC, or even Reg Z), but most banks lump them under card transactions and treat them similarly. But, yes, a debit card dispute could leave you without funds, while a credit card dispute is cleaner unless you had a large purchase planned. My solution is to only have a low limit account tied to the debit to avoid fraud charges which tie up your checking account.
And the warranty doubling, rewards, et al, are paid for by the fees on merchants. The new Visa Signature and MasterCard World cards add a surcharge to merchant fees to pay for the perqs given to cardholders–kind of American Express lite, whose perenially higher fees were based on the fact that their cardholders bought and spent more, justifying their higher rates–at least for the bank.
Don
The rewards programs threat is a complete load of hooey because the CC companies don’t foot the (entire) bill for them anyway. Rewards cards process for a merchant at a higher percentage.
You can read more details about credit card discount rates and fee determination here, though it reads like stereo instructions. The pertinent sections are here:
and
Don
Actually, there is a charge for PIN debit—however, it is a flat fee (usually capped @ $.45, depending on the debit network). Credit card fees are (for card swipe) @ 1.4% + $.10, and debit @ 1.25% + $.15. For low $ trans (under $40
You state those discount rates like they’re a constant, but they are not. They vary tremendously based on who you get the merchant account through and the typical type of transactions. If you do internet sales you pay a higher rate based on odds of fraud, and you pay differently based on whether there’s a clerk involved or a standalone terminal (like at the pay-at-the-pump gas station).
They also vary at the same merchant based on how the transaction was handled. If the card swipes it’s cheaper for the merchant than if they hand-key the number, for example.
The prices Fraud Guy is quoting are not bad. Small business almost certainly pay more, as well as monthly fixed charges. When I ran a small business in 2002 our discount rate was never better than 2% and could be notably higher, depending.
dave
Yup, call me a deadbeat, I never pay interest, or annual fee and the day a card begins charging interest from day one or expects me to pay an annual fee is the day I will cancel the credit card. I’ve worked hard to stay free of credit card debt and I will not be punished for doing so.
Persia
Also– are any of us really so attached to our rewards programs that we’ll riot in the streets if we lose them? Yeah, I love my $25 Amazon gift certificate as much as the next girl but in the end…it’s not really that awesome a perk. Especially when I remember how much cabbage I had to spend to get it.
PattyP
When I use my Visa debit card issued by my credit union, I pay no PIN or Point of Service fees. At all. Ever.
The Saff
@ dave #30
I’m like you. When I got my first CC after my freshman year in college, my dad said in his most stern-dad voice, “You only spend what you can pay every month.” And that’s what I’ve always done.
I only use my CC on internet transactions and pay cash or use my debit card for everything else.
Martin
Ok, a few clarifications. Here’s the policy on debit card fraud:
That’s what the banks MUST comply with. Many banks have more generous terms than those. Mine gives me full protection for 15 days. So long as I notice the problem within 2 weeks, they’ll take care of it.
As for the fees, that depends a bit but Fraud guy has the general numbers. They vary a lot based on agency (Visa vs AmEx, etc.) and the size of the vendor. If you are small, you pay higher fees. If you are large and can do a lot of the data processing on your end, the fees are lower. You can also do clever things with the fees, as what iTunes does. iTunes only does the variable fee, which gets authorization from the bank when you purchase. It saves those transactions and keeps them open until you are done shopping (you might select 20 different songs in a single session) and after about 24 hours it then lumps the transactions as a single charge, incurring the flat fee only once. So, of the $.99 song, only about $.02 gets eaten up on authorization per song and then $.10-$.15 gets spread out over the entire purchase (be it $.99 or $9.90) to finish the transaction. Apple gets lower rates because they do everything they can to make the agencies life easier, and because they are such high volume. Other retailers do this kind of thing as well – Amazon, for instance.
The variable cost generally goes to the bank that issued the card for extending the money to the merchant on your behalf (the ‘credit’ part) while the fixed fee goes to Visa/MC/etc who run the network. For debit, the fees depend on the bank. It’s an online transaction, so your bank can charge you $1 or something like that every time you use the debit card – much the same way that they can charge for use of the ATM (since it’s basically the same transaction). Many banks don’t do that, so then it’s just the transaction cost to the network, which is pretty small.
YellowJournalism
And what’s funny is that if you use the card responsibly, keeping balances under the limit and making payments faithfully, even paying it off each month, they sometimes punish you! One of our credit card rates was lowered, not because we were constantly over the limit or missed payments but because we paid it almost entirely off months ago and haven’t made “major” (meaning run it up to the limit) purchases on it in a while. They lowered our limit by a thousand dollars and told us by a letter that arrived weeks after they actually lowered the rate.
RememberNovember
CC companies hate when you pay them off, they want to count you as a constant annuity rather than a lending service. Eff that-life doesn’t take Visa, Visa takes your life.
Bootlegger
@over_educated: I did just that and they didn’t raise my rate, but instead said my account would be closed as soon as the balance was paid off.
Fine with me, I said. I’ll give them a last chance but they–Citi, BofA–are pretty much on my shit list now.
jcricket
I think this was mentioned here before, but what’s best is that Visa/MC don’t even pay for fraud/defaults – the issuing bank does. It’s basically the perfect business – charge consumers whatever you want in interest and fees, charge merchants and banks whatever you want in fees. Profit out the wazoo. Threaten anyone who gets in your way.
I wish Dems would realize every single industry does this kind of inglorious whining when someone threatens to impose even the meekest of regulations reigning in their rapacious behavior. Usually, they’re full of crap (i.e. they won’t do a damn thing in response to the regulations). And even when they aren’t (i.e. CC companies charge fees, or don’t offer credit to people who are poor credit risks) the pros outweigh the cons.
It’s time to stop letting the monied special-interests blackmail our government to prevent consumer protections.
over_educated
@Bootlegger: Very good then, if they don’t want your business go to someone who will. I have never had that happen to me, but that may be because I charge 30k a year to credit cards (practically all my non-rent living and entertainment expenses) and haven’t missed a payment in 10 years.
Ignore the FICO threats, the hit is minimal and quickly reveresed. If a lender asks why you closed a credit card simply say you felt their rates were to high and they started charging an annual fee which you felt was not prudent in a competative market. If a lender has an issue with you doing fiscally responsible things then you should probably also find a new lender.
malraux
@PattyP: Well, you might not think that you do, but any sort of plastic has a use fee attached to it. The credit and debit industry is pretty good at hiding that info from consumers. The business pays the fee, which of course raises operating expenses, which results in higher prices. The big victory of the financial industry is the part of the agreement that forbids a business from charging a fee to use a credit/debit card, making it harder for consumers to see what the actual cost of the card is. And of coarse, getting the cash paying customers to subsidize the credit cards.
Jen R
@YellowJournalism: That just happened to me, too. After years of bumping up my limit every few months (even though I didn’t spend anywhere near that and almost always paid off the balance), BoA just sent me a letter saying that they’d lowered my limit. I don’t care, but I thought it was odd.
CREDO uses BoA, so I’m in the process of moving away from that card to one issued by my credit union. I’m debating whether to close the BoA card — on the one hand, they won’t make any money off of me if I don’t use it and closing it would be a bit of a kick to my FICO, but on the other hand I’m not looking to make a major purchase anytime soon, and I would love to be able to tell them I’m cancelling the card because they’re evil bastards. Decisions, decisions.
asiangrrlMN
I said it before, and I’ll say it again. My old credit card company did send out rumblings about charging an annual fee for those of us who don’t carry any debt. There was such an outcry that they quickly dropped the notion. I wouldn’t keep any credit card that charged me a fee for paying off my charges on time each month. I don’t need them. I will just use someone else or stick to checks and cash.
Michael D.
I carry no balance on my AMEX, and I have an annual fee. Of course, I take about 4 flights a year from all the SkyMiles I rack up, so the $79 is worth it.
AZmando
Our UAL VISA costs $60 per year, but we are taking our second free trip to Europe in a couple of weeks, not to mention numerous other free trips over the years. We come out ahead big time. We put EVERYTHING on that card to rack up the miles. We pay it off every month, so all they get from us is the $60 every year.
We were late by accident once, and a quick phone call reversed all the interest and the late charge.
Of course they get the fees they charge to merchants, and so it’s a pretty good deal for the issuer too. The losers are the merchants and those who pay by cash or check.
Comrade Luke
My first thought when seeing that article was: Of COURSE Schumer is there for the photo op.
Can’t stand that guy.
Jamey
I bank with a small local, Provident of North Jersey.
If I use my debit/ATM card a certain number of times a month to charge items (10), make an automatic payment (1), and pay bills online (1), my checking account earns a surprisingly high amount of interest–most recently, 4.33% for the first $25k; a lower rate above that amount. Thus, I really don’t give a rat’s arse about cash back bonuses or frequent flyer miles. I’d rather earn interest on money I have, than get a pittance back on what I spend. It’s 31 flavors of awesome–and I say this as a person whose cellphone ringtone is “I Hate Banks,” by Mojo Nixon.
This works great for me because I use my credit card ONLY as a charge card. I retire my debt at the end of every month, and haven’t paid a cent in interest or late fees since the early ’90s. If I can’t afford to pay cash for it, I don’t buy it. In fact, even if I can afford it I usually don’t buy it. (Although I admit that the Caps v. Penguins series looked sad on my raggedy-ass 1989 20″ Sony…)
If card issuers cannot make enough in transaction fees on the numerous purchases I make each month, then fuck them. I will not pay an annual fee. I’ll cut up my card and just pay cash. And I’m willing to bet that there are tens or hundreds of thousands of card-holders like me–and all of us would love to see the card issuers lose. This is a dangerous game of chicken their playing. Hopefully, they have a Plan “B.”( My guess is they don’t, because this bill passed by such a huge margin because this time, VP Biden didn’t have to act on behalf of MBNA, CapitalOne, Chase, et alia. Where was their Plan “B” yesterday?)
Brian J
I’m very much in support of some reform for credit card practices. I’m not sure what we should prevent them from doing, but I am definitely in favor of the companies making basic information easier to access.
All of the usual comments and suggestions in mind, I’m of the mindset that as long as there remains a sizable block of people who manage their credit responsibly, there will be a company to serve them. Along the same lines, if there are people who refuse to go along with yearly fees, for instance, and there is some company that can survive on not having them, people will respond to that and thus not give their business to the company that has a practice they don’t like. I suspect the same sort of thing would happen with rewards programs of all kinds.
Brian J
The simplest solution, assuming it’s available, is to vote with your feet (or dollars, or whatever). I hope you did that.
bedtimeforbonzo
Definitely follow over_educated’s advice.
I find it more than a little perverse that by closing a credit card account your FICO goes down, even if minimally, one of the many arcane “rules” the all-powerful credit agencies have laid down.
The Great Obama deserves credit for pushing the clampdown on the credit card industry. He should take it a step further and examine the increasingly lucrative credit-bureau industry — especially now that your credit score can impact more than just credit and, therefore, purchasing power.
For starters, Congress should outlaw car insurance companies’ ability to use credit scores as a factor in determining rates. (Trying the other day to see if I could do better than my decades-old Nationwide policy — which, it turned out, he couldn’t — the Progressive/Travelers broker asked for my social security number. Why should an insurance agent need your social?)
For another, it should outlaw employers using them as part of a background check for new hires, a growing practice. I’m sure others here can think of things the credit-bureau industry does that don’t make sense or are unfair.
Oh, yes: How about trying to get a mistake on your file corrected? I’ve never had to do this but have had many customers who have had and, apparently, you have to jump through hoops and then it takes forever for them to make the correction.
Finally, Congress should outlaw the number of times an hour the “freecreditreport.com guy” can appear singing his little ditties on a particular channel (except the one featuring his pouty girlfriend in the tight jeans).
bedtimeforbonzo
“Ignore the FICO threats, the hit is minimal and quickly reversed.”
Definitely follow over_educated’s advice.
I find it perverse that your FICO score will be lowered, even if minimally, if you close a credit card, one of the arcane and unfair rules the all-powerful credit bureaus have laid down.
The Great Obama deserves credit for pushing a clampdown on the credit card industry. He should do the same to the increasingly lucrative and influential credit score industry.
For starters, Congress should disallow an insurance company’s ability to use your credit score as a factor in determining rates. (Trying the other day to see if I could do better than my decades-old Nationwide policy — turns out he could not — the Travelers/Progressive broker asked for my social security number. Why should an insurance agent need your social?)
For another thing, it should disallow employees using your credit score as part of a background check for new hires, a growing practice.
I am sure others here can thing of other stupid or unfair things involving your credit report.
Oh, yeah: How about trying to get a mistake fixed on your credit report? I have never had to do this but have had several customers tell me they have and, apparently, you have to jump through hoops and, even after that, it takes forever for the correction to be made.
Finally, Congress should limit the number of times an hour the “freecreditreport.com guy” can sing one of us his little ditties on a given channel (except the one featuring his pouty girlfriend wearing the tight jeans).
bedtimeforbonzo
“Ignore the FICO threats, the hit is minimal and quickly reversed.”
Definitely follow over_educated’s advice.
I find it perverse that your FICO score will be lowered, even if minimally, if you close a credit card, one of the arcane and unfair rules the all-powerful credit bureaus have laid down.
The Great Obama deserves credit for pushing a clampdown on the credit card industry. He should do the same to the increasingly lucrative and influential credit score industry.
For starters, Congress should disallow an insurance company’s ability to use your credit score as a factor in determining rates. (Trying the other day to see if I could do better than my decades-old Nationwide policy — turns out he could not — the Travelers/Progressive broker asked for my social security number. Why should an insurance agent need your social?)
For another thing, it should disallow employees using your credit score as part of a background check for new hires, a growing practice.
I am sure others here can thing of other stupid or unfair things involving your credit report.
Oh, yeah: How about trying to get a mistake fixed on your credit report? I have never had to do this but have had several customers tell me they have and, apparently, you have to jump through hoops and, even after that, it takes forever for the correction to be made.
Finally, Congress should limit the number of times an hour the “freecreditreport.com guy” can sing one of us his little ditties on a given channel (except the one featuring his pouty girlfriend wearing the tight jeans).
bedtimeforbonzo
“Ignore the FICO threats, the hit is minimal and quickly reversed.”
Definitely follow over_educated’s advice.
I find it perverse that your FICO score will be lowered, even if minimally, if you close a credit card, one of the arcane and unfair rules the all-powerful credit bureaus have laid down.
The Great Obama deserves credit for pushing a clampdown on the credit card industry. He should do the same to the increasingly lucrative and influential credit score industry.
For starters, Congress should disallow an insurance company’s ability to use your credit score as a factor in determining rates. (Trying the other day to see if I could do better than my decades-old Nationwide policy — turns out he could not — the Travelers/Progressive broker asked for my social security number. Why should an insurance agent need your social?)
For another thing, it should disallow employees using your credit score as part of a background check for new hires, a growing practice.
I am sure others here can thing of other stupid or unfair things involving your credit report.
Oh, yeah: How about trying to get a mistake fixed on your credit report? I have never had to do this but have had several customers tell me they have and, apparently, you have to jump through hoops and, even after that, it takes forever for the correction to be made.
Finally, Congress should limit the number of times an hour the “freecreditreport.com guy” can sing one of us his little ditties on a given channel (except the one featuring his pouty girlfriend wearing the tight jeans).
bedtimeforbonzo
“Ignore the FICO threats, the hit is minimal and quickly reversed.”
Definitely follow over_educated’s advice.
I find it perverse that your FICO score will be lowered, even if minimally, if you close a credit card, one of the arcane and unfair rules the all-powerful credit bureaus have laid down.
The Great Obama deserves credit for pushing a clampdown on the credit card industry. He should do the same to the increasingly lucrative and influential credit score industry.
For starters, Congress should disallow an insurance company’s ability to use your credit score as a factor in determining rates. (Trying the other day to see if I could do better than my decades-old Nationwide policy — turns out he could not — the Travelers/Progressive broker asked for my social security number. Why should an insurance agent need your social?)
For another thing, it should disallow employees using your credit score as part of a background check for new hires, a growing practice.
I am sure others here can thing of other stupid or unfair things involving your credit report.
Oh, yeah: How about trying to get a mistake fixed on your credit report? I have never had to do this but have had several customers tell me they have and, apparently, you have to jump through hoops and, even after that, it takes forever for the correction to be made.
Finally, Congress should limit the number of times an hour the “freecreditreport.com guy” can sing one of us his little ditties on a given channel (except the one featuring his pouty girlfriend wearing the tight jeans).