I Love You Chuck, But Credit Cards Are The Biggest Scam Ever Invented!

[Wewus432]

I've been reading the new SweetWater catalog lately and today the newsletter came. Owner Chuck Surack's whole column is an advertisement for the new [b]All Access Platinum Card.[/b]I love you Chuck but, do you know how long it takes to pay off a $500.00 balance at an average interest rate if you pay the minimum balance each month? About 40 years. Love you, mean it. [i]in the interest of sucking up to Chuck this post has been edited[/i]

[Gtoledo3]

Yeah, I can just envision the top music store execs sitting around going "we need to get into credit... that's where the money is." Seems like Sam Ash is big on pushing their card too.

[Wewus432]

Anyone who applies for and uses this credit card is, yes, you guessed it................................ [b]out of the band.[/b]

[patrick_dont_fret]

That's why I never bite off more than I can chew.

[Anderton]

Hey, credit cards are a tool if you use them right. I have a Delta Skymiles cards, so every buck gives me a frequent flyer mile, and several purchases give double miles, like grocery stores and airline tickets. So I basically put EVERYTHING I buy on the card to run up the miles, deposit my checks, and take out as little cash as possible. At the end of the month I pay off the balance in full, and I've had money interest-free for 30 days, with free airline miles too! There's an annual fee, but so far, it's worth it. The credit card companies are betting you'll spend more than you make. But as long as you don't, you can come out way ahead on the deal. I'm hoping MP.com can find some kind of affinity credit card deal where you got cash back or some other spiff like that. Hey, why not? Yeah, credit cards are a scam...but you can scam 'em right back if you simply play by your rules instead of theirs.

[Wewus432]

Jesus Craig, you're such a tool of the establishment. :D If only every one was as good as you with paying the balance each month. I think credit card debt is a huge albatross around the neck of the American people.( [i]great analogy huh?[/i]) The interest rates are astronomical, the profits are exorbitant, yah da, yah da, I'm too tired to do this. Please tune in tommorow for my rant against banks.

[Dan South]

I guess I woke up this morning in an alternate universe where Sweetwater is the only company on the planet pushing a credit card. That's odd. When I went to bed last night, there were THOUSANDS of companies pushing credit cards. Hmm, I wonder whether I'll beam back to my home planet by tomorrow. :confused:

[Wewus432]

Nobody said that SweetWater was the only company pushing credit cards Dan. I was just commenting on Chuck Surack's column which was actually a commercial. BTW, you're out of the band.

[Wewus432]

[quote]Originally posted by Dan South: [b]I guess I woke up this morning in an alternate universe where Sweetwater is the only company on the planet pushing a credit card. I'm really irritable right now, I think I'll post a sarcastic, smart ass comment on this thread about credit cards. :D [/b][/quote]

[Tedster]

Advertising credit cards? Heck, I've got better ones...how about advertising the Casinos at places where people with gambling problems go for help. How about advertising Cuervo Gold at an AA meeting? If I walk into a bank and steal all of their money, they'll put me in jail. If a credit card company steals mine, it's legit. Now, Craig, play by your rules you say. But for the thousands, perhaps millions, for whom chronic debt is a problem akin to alcoholism or addiction, to me, there's no difference between Citicorp and Raul the Columbian druglord.

[Wewus432]

Thanks for the back up Ted. The banks of America have been given free rein and are sucking the life out of everything around them. The proper place for banks is is financing business, AND that's one of things that made this country great. What they are doing now to the American public is [b]USURY[/b] , plain and simple.

[thisDude]

I'll chime in with this. I used to work for a major (at the time they were the 3rd largest) credit card issuer when I was temping and the questionable business practices that I witnessed and reluctantly took part in made me want to go home and punch myself in the face every night. 1) Your credit card is never really cancelled. Even if you pay off the balance and call in to cancel it, you are still on record with them, and get this... Years later you will get a bill in the mail for your old card with some annual fee of like $20, making you think it's still active. So you call in to cancel it and get the fee removed, but before you do, you have to talk with someone who has my old job who will offer you 0% for 12 months with a balance transfer (then after 12 months, it usually defaults to 15% or something tied to the prime rate, whichever's higher). It's essentially a bait and switch. 2) If you try to cancel your card, you'll be offered a lower rate, but you have really bluff them to get it. If the lower rate was available, why didn't they just give it to you in the first place? 3) The person you are talking to on the phone probably doesn't work for the credit card company. They outsource, and as such, you'll be talking to someone who might give you false information, just to get balance transfer dollars. They used to have these bullshit contests where we'd be rewarded with shit like movie tickets or coozies for bringing in tens of thousands of balance transfer dollars. Outsourcing also alleviates the company of responsibility. Try getting a last name or extension of someone you're talking to. In the 2 months that I worked for the devil, I heard horror stories about Providian (not the one I worked for). They were doing all sorts of stuff like this and then some. By the way, Dick Cheney used to be on their board of directors. ------------------------------------------------------------------------- Oh yeah, and as far as store credit cards go, most of them are unbeleivably high. in the range of 20%-29%. I get this mailer from SamAsh about every other week and it's sad. The design and language of the ad is obviously aimed at 18 - 24 year olds who may not be so credit savvy.

[Chip McDonald]

[quote]Originally posted by thisDude: [b]I'll chime in with this. I used to work for a major (at the time they were the 3rd largest) credit card issuer when I was temping and the questionable business practices that I witnessed and reluctantly took part in made me want to go home and punch myself in the face every night. [/b][/quote]Ok, but let's just say for example you had to get a credit card. As in, apparently it's now the ONLY thing that counts on your credit rating - what card would you try to get and why?

[videoeditor1]

Credit cards have a utility. I can't rent a car from Hertz unless it is secured on a credit card. There are many purchases that I would not be able to make, and feel secure, without the backing of a credit card company behind me. Having said that, I use my Citibank [b]debit[/b] card for everything else. They have an "alliance" with American Airlines' Advantage program, so for $60/yr, each dollar gives me one mile. Of course, every, and anything (like Craig) that can be paid by debit mastercard, is. This year, I was able to snag three international round trip tickets (the maximum allowed in the AA program) just from debit card purchases. Next year (next week), I'm moving from Bank of New York to Citibank for my business accounts so I can drive the purchasing of my company (where applicable) through a Citibank business debit card as well. Next year, all being well, I am taking the missus and the kids to Maui for a week. Free hotel, free Hertz car, and definately free air travel (airport taxes and security fees not included, 7 day advance reservation required). On the flip side, as a retailer (of sorts) in NY, I [b]do not[/b] accept credit cards in my course of business, but for how much longer? Accepting credit cards mean I have to give the card company 1.5%~3% of the total sale, plus a 40-cent (for example) transaction fee, plus I have to rent/lease/buy the card processing equipment. NYS law prohibits me from charging that 3% (or whatever it is) more to cover the cost of the card transaction. Not processing credit cards means there is a big slice of the potential market that I am not capturing. Fortunately, my business model is not driven primarily by sales, or growth. Some may say I lack ambition, but I'm so very content where I currently am. Credit card misuse can be as damaging as gambling. Yet neither of these are addressed in our growing/learning years - in middle and high school. The fucking retards that run and inherit the government have fully and completely endorsed gambling anyways, without providing proper [i]training[/i], counsel and advice to assist those who may be vunerable. Saying the "Lotto" helps to pay for education is actually worse than those ads where they say if you smoke crack you're helping terrorists. For the record, I don't ever, gamble (in that sense) No lotto, no card games, no casinos, no nothing. But that's a whole 'nother story.

[Wewus432]

All good points Drew, of course credit cards can be useful, but the interest rates on most of them amount to usury. The biggest abuse of all though is the [b]late fees[/b]. HI WE'RE MASTERCARD, WE SCREW YOU TWICE. [i]Once on the interest rate, once on the late fees[/i] It should be illegal, but it's not because of the shills elected to the U.S Congress.

[Yuri T.]

In some ways I agree with the anti credit rant. However, this is the USA and as always it's buyer beware. People need to read things all the way through before they sign them. Yet I must say, sometimes I really rue the day I got my first credit card. :rolleyes: :(

[Chuck Surack]

Wewus, You have pulled me out of the woodwork with this one. I have been following these forums for several years, but I have not posted much, because I figured ANYTHING I posted would be considered spam. Since this one was directed at me personally I couldn't resist. First, to all of you...thanks for creating such a great community. I really have learned a lot by sitting back and listening. Wewus, I agree with you completely. I wish we didn't have to offer credit cards.  I really was reluctant to do so, but I have to tell you I heard over and over that customers wanted us to offer a card. (many MusicPlayer members, too!) I kept hearing Sam Ash had one, GC had one, MF had one, MARS had one..why not Sweetwater?  In fact, I believe Sweetwater was one of the last bigger stores to offer a private label card. After several years of resisting it..I finally gave in when I found a program that I thought could actually benefit most musicians. Craig, I am with you on this one...."Credit cards are a tool...credit cards are a scam...but you can scam 'em right back".. As an example, the card we offer always gives you 90 days to pay off the balance and not incur ANY fees or interest charges...(We recently had a promo where you didn't have to pay for 1 year) This seems like a pretty good deal to me. Use the bank's money and in the mean time, enjoy the gear. For what it is worth, our program is administered by one of the biggest, most reputable card processing companies. They started providing financing in 1932 (geez!) (They have done programs for Best Buy, Sony, Ford, Ethan Allen, Tweeter, etc. just to name a few) They do not charge the customer any annual fees. I absolutely concur...be responsible and pay off the balance when it is due. If you really have to make minimum payments maybe you should reconsider whether you should buy the new gear. (Whew, was that hard for me to say ?) The ONLY way I could rationalize paying the interest is that if you had no other choice AND if you are making money with the gear, you could consider the interest charges just a cost of doing business. I am NOT saying a credit card is for everyone, but if you can use the program responsibly and to your benefit..by all means take advantage of it. If you don't like it, don't apply. All we are trying to do is offer options. Not everyone can pay cash, have an existing card, can wire the money, etc. A lot of our customers wanted a dedicated card to be able to track their musical purchases for tax purposes or to keep separate from their personal finances, spouses, etc. "Different strokes for different folks". Thanks again to all... and Happy Holidays. Chuck Surack Sweetwater Sound

[PBBPaul]

Worse than the credit card companies are the true predatory lenders; the check cashing "services" and rent-to-own companies that prey on the most vulnerable. They charge the equivalent of 300% or greater interest rates and get away with it. I am generally pretty much in favor of laissez-faire (sp?) economics but that's out of line. I occasionally listen to Clark Howard and am amazed at the number of people who call in with $40K+ credit card balances. I'm with Craig and make it my point to never have a balance. Although, I have to admit that when I was out of work for 9 months last year, those cards came in handy. We've been busting our butts though and are almost debt free. I often think about my parents and how we survived as a family of six with no credit and my dad's single income of about $5K. I think about how difficult it must have been to feed and clothe us while paying off a $20K mortgage. Of course then I remember that we rarely ate out. My mother made most of our clothes. We had one TV (B&W). Our family car was always at least two years old and my mother's second car cost $50. I know, I'm old but it amazes me how much stuff we "need" now. How many of us have more than one TV. More than one stereo system, computer, refrigerator etc... My kids have more toys than I think I had throughout my entire life. It is instant gratification, the desire to feel rich that drives the credit companies' profits. We have no one to blame but ourselves.

[Wewus432]

Ruh Roh, Chuckie not like Wewus any more. :D You don't have to bite me, I appreciate you posting Chuck, please spam us anytime. All good points you and others have made. My big gripes are [b]exorbitant interest rates and exorbitant late fees[/b]. Why is this allowed? I think it's wrong, wrong, wrong.

[Sylver]

Credit cards ARE a tool. You just have to watch it, especially "Store cards" which tend to have outragious interest rates, usually 15-21%. You have to watch the "low interest" cards too. A lot of those have fine print that can make your interest skyrocket. Missing a payment is one, two late payments in a row, bounced checks, etc.

[The Bear Jew]

Here's my solution: Don't get a credit card. OR... Get one and don't use it unless you ABSOLUTELY must use it. I don't have one, therefore, I can't spend money I don't have.

[Wewus432]

That's all well and good, common sense, but I think there SHOULD be legal caps on all that stuff to prevent abuse. We have laws to protect us from everything else, why don't we have legal protection from predatory lenders?

[Dwarf]

[quote]Originally posted by NYC Drew: [b]NYS law prohibits me from charging that 3% (or whatever it is) more to cover the cost of the card transaction. [/b][/quote]Drew, I don't know if this is applicable, or legal in NY, but here in Montreal a lot of small stores list slightly inflated prices for their gear but offer a "cash discount". You wanna pay cash? You get the lower price. You wanna pay by credit? You pay the slightly higher price. You're not penalising people for paying by card, you're offering a discount for cash purchases. -- Rob

[The Bear Jew]

Yeah, I feel ya. When I was around 18 or so, seems like everyone I knew got a credit card and went nuts buying shit they couldn't afford. Now, about 14 years later, many of them are still paying off those debts. Many of them had interest rates of something like 20%, since they were just kids. It's pretty sad. I guess there's nothing illegal about offering people a bad deal. It's not like the credit card organizations don't provide exactly what they say they will. They offer credit... with terrible terms. When you use one of those cards, you have to know that you've got a shit deal. So everyone knows what they're getting. That's why this stuff can't be regulated. It's up to the people who are offered these cards whether they decide to go with them or not. Not to sound anti-American or anything, but I think this is kind of the basis of Western society -- the freedom to offer and accept bad deals. Personally... think the whole thing sucks. I say there should be fewer credit cards and more cowbell.

[miroslav]

[quote]Originally posted by Anderton: ...At the end of the month I pay off the balance in full...[/quote]I'm with you on this....took me awhile (several years) to get rid of some CC debt I accumulated a few years ago when I had no other options. Man...I HATED seeing the amount of money I pissed away each month on interest. Now days...I am CC debt FREE!!! :thu: I still use 'em all the time...but I always pay off the balances at the end of the month...NO INTEREST...the CC companies must hate me...no annual fee and no interest to collect from me... :p

[videoeditor1]

[quote]Originally posted by Dwarf: Drew, I don't know if this is applicable, or legal in NY, but here in Montreal a lot of small stores list slightly inflated prices for their gear but offer a "cash discount". You wanna pay cash? You get the lower price. You wanna pay by credit? You pay the slightly higher price. You're not penalising people for paying by card, you're offering a discount for cash purchases. -- Rob[/quote]Rob, This is [i]specifically[/i] what I'm referring to. No "cash" discounts. You have to offer a prospective customer the same price - cash or charge...not that most retailers adhere to this...

[Tedster]

[quote]Originally posted by TheWewus: [b]Thanks for the back up Ted. The banks of America have been given free rein and are sucking the life out of everything around them. The proper place for banks is is financing business, AND that's one of things that made this country great. What they are doing now to the American public is [b]USURY[/b] , plain and simple.[/b][/quote]Wewus, my wife is a "credit-oholic". Problem is, for some things, you have to have a credit card (try renting a car without one). I couldn't believe that, once, I tried to rent a car (we had flown out of town, which we do from time to time). I had all kinds of cash to leave for a deposit. I might as well have been offering them my paper clip collection and a stick of Doublemint. All they would take is a credit card, despite the fact mine had been run up to where there was only like $100 left on it. A big fucking scam, and the perpetrators of said scam should be strung up by their cojones.

[Rick K.]

I agree completely with Anderton on this one. I use a credit card for almost everything and then pay it off monthly. It really helps me in several ways. #1. Write offs. Each year, I have two written accounts of transactions made which helps me track my tax write offs and maximize them to the fullest allowed. #2. Free Cash Rewards. Just yesterday, we called our folks at First USA and put in for our rebates. Total we're going to receive $225 CASH for accumulating points throughout the year and haven't paid any interest! (Who's scamming who?) #3. Credit. Smart utilization of credit can help you exponentially in many other ways. For example, our car insurance is cheaper than if we had bad credit. Our mortgage interest rate is dirt cheap, therefore my payments are less every month and I have more disposable income to put into my 401K and IRA's. #4. Fraud Protection. With credit cards, you have certain protections you don't have if you use cash. For example, on eBay, I use credit cards for every purchase. This provides me a transaction record PLUS a verification as to whom received those funds. If they stiff me, they are easier to find. I don't understand why someone would opt for a credit card with a rate over 10% anyway. They are everywhere. And usuary rates are established in the US, so they cannot charge beyond a certain interest rate. Just like shopping for a car, you ought to shop for a credit card rate. Perhaps the easiest way, Wewus, to avoid late charges is to NOT BE LATE. You should be penalized for your breach of contract in your agreement. Most major credit card companies have online availability for payment, so there should be no excuse. The easiest way to never be late, is to just pay the bill when you receive it. Simple. Rick

[The Bear Jew]

Yo Tedster... That car-rental thing is a real bastard. The same thing happened to my wife & I when we traveled and tried to rent a car. No credit card, no rental. That's such bullshit. We have a check card, which links directly to our bank account, but that wouldn't do, even though we had tons of cash in there. Of course, if we had a maxed-out regular credit card, they would have been happy to take an imprint of that... Stupid.

[Dan South]

[quote]Originally posted by TheWewus: [b]That's all well and good, common sense, but I think there SHOULD be legal caps on all that stuff to prevent abuse.[/b][/quote](1) There ARE legal caps. The amount varies by state (the state of the issuer, not the cardholder). Charging more than the legal limit is considered to be racketeering. (2) There are issuers who offer rates that are much lower than the norm. If you anticipate the need to carry a credit card balance at some point in the future, seek out one of these low rate lenders. Make sure that this is a more or less permanent rate, not an "introductory offer." Keep in mind that the rate cannot be guaranteed to stay at that level, because lending rates fluctuate, and credit card companies have to adjust their rates accordingly. (3) Consumers abuse credit cards. Over a million Americans filed for personal bankruptcy in 2001. I won't claim to know what percentage of these people ran up big credit card bills, but I'm guessing that credit card debt played a roll in the majority of cases. In every case, the lending institution that underwrote the credit card was left holding the bag for the full amount. The consumer just walks away. The financial institution is out $5,000 or $10,000 or $20,000 or whatever this person owed. Multiply those numbers by a million bankruptcies, and the financial losses are staggering. Card issuers charge high interest rates because they know that a percentage of their cardholders will file bankruptcy. They need to build in a level of profit that will offset these losses. Legitimate customers foot the bill for the scofflaws. Even so, for many financial institutions the higher rates are not enough. Banks do fail, and when they fail, it's because of cash flow problems caused by bad loans. A credit card bankruptcy is poison to a lending institution. (4) Credit card FRAUD is another huge expense. This expense is shared to some degree by both banks and retailers. If someone steals your credit card (or just the number) and buys a bunch of stuff, who pays for it? Not you. The card issuer protects you from this liability. That means that they have to pay for the stuff that the thief bought, or they have to split the damages with the retailers who sold the merchandise. This is another reason why card issuers need to charge high interest rates. (5) Interest rates reflect an assessment of risk. A mortgage has a relatively low rate, because if the lendee defaults, the mortgage broker gets the property. Car loans charge a higher rate than mortgages. If you don't pay for your car, the bank will repossess it, but it won't be worth as much as when you paid for it. This, as opposed to a piece of real estate, which could be worth MORE than the selling price at some future date. Make sense? Credit cards are inherently risky investments for the issuers. Lots of cardholders will default. Lots of fraud is going to happen. Lots of disputes with retailers over the quality of merchandise will come up. The high rates of interest on credit cards reflect the impact of these risks on the lender's bottom line. (6) Why should the government protect people who refuse to take responsibility for their lives. I see liquor ads every day, but I don't drink liquor. I see tobacco ads in magazines and on billboards, but I don't smoke or chew. Heck, when I was in Vegas, I saw ads for call girls. Yet, somehow, I've managed to get this far in life without indulging in the services of a prostitute. So what if companies advertise credit cards. Are you required to use them? Are you required to carry a balance? Are you required to pay interest? This isn't like the mining towns of the nineteenth century, where miners had to buy all of their supplies on credit at the company store at a high interest rate that was designed to trap them into working the mine until they dropped dead. People live without credit cards, and lots of people manage their cards carefully. It's not the government's job to manage our finances. The government can't manage it's OWN finances. Spend wisely, or don't spend at all.