Attention: Credit Card Companies Have Realized That You Are Broke

The New York Times has an article detailing what promises to be the next fun financial crisis — credit card debt! Apparently, credit card companies have only just now realized that you people are broke! Whoops.

Last time this happened, during the dotcom bust, the companies just raised fees to compensate for all the defaults. The trouble is, they’re probably not going to be able to get away with it again.

In previous downturns, banks could make up the missing profits by raising fees. This time, there may be less room to maneuver.

“The last time credit costs spiked, the late fees were much lower, so card issuers could turn to that and reprice more nimbly,” a Morgan Stanley analyst, Betsy Graseck, said. “There is just more scrutiny now, and coming after the subprime mortgage crisis, the world is more sensitive to the way lenders behave.”

There is an upside to all of this, of course, the number of pieces of junk mail the average American receives has fallen dramatically.

Consumers Feel the Next Crisis: It’s Credit Cards [NYT]
(Photo: Jeff Keen ) (Thanks, LoquaciousMusic!)

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  1. RevRagnarok says:

    I just got an email from BoA who bought out MBNA’s cards saying that I need to spend more since I have such a high limit.

    • Starfury says:

      @RevRagnarok: We had issues with our MBNA/BoA Mastercard. Mailed in payment 6 days before it was due and they didn’t get it until the day after the due date. As a courtesy the cut the late fee in half and dropped the interest charges.

      As a courtesy to them we canceled the card.

    • junip says:

      @RevRagnarok: I got a letter in the mail from BofA begging me to start using my credit card with them. It was like “please come back to us and log into your account, we miss you!” It also had my “super secret” log in ID printed on the letter, which I felt was a little obnoxious on their part because they made such a big deal out of making it secret when I first got the account.

      I’m stuck in a catch 22 with them. I won’t use the card because 1. they suck, and 2. they won’t lower the interest rate. They won’t lower the interest rate because I’m not using the card.

    • socalrob of the 24 and a half century says:

      @RevRagnarok:
      BofA hasn’t said anything of my credit card but they did send myself and my mother, and keep sending us the same letter, saying that we can get some like 50k business loan at a high interest rate and payment plans… yeah… Neither of us own a business… but I could…

    • Mary Marsala with Fries says:

      @RevRagnarok: After years and years of having the same card (Chase–>MBNA–>BofA) and constantly getting my limit raised to try and tempt me to use it, BofA sent me a letter last week saying that they’d go ahead and do me the favor of cutting my limit down to 1/3 of what it had become. Because obviously having so much available credit was just a *terrible* burden on me.

      I thanked them for the nice letter in the Memo line of the check I wrote the following week, to pay off the card for good!

      • Haltingpoint says:

        @Mary Marsala with Fries: You do realize that you just made their day right? If you pay in full and don’t pay fees because you are intelligent with your usage, you are not profitable for them. They raised your limit in an attempt to get you to start making partial monthly payments and owe them interest which failed. So perhaps this is a win/win situation for both you and them.

  2. Fist-o™ says:

    I wonder how big / existent the “Credit Card Crunch” will be. I still can’t wrap my brain around the statistics that quote an average American household as spending ~5-6k more per year than they make. That can’t happen forever.

    • Jakuub says:

      @Fist-oâ„¢: What’s the source of your statistic? Is it possible that a significant portion of that is due to unclaimed income in this average American household? I have several friends with 2nd jobs that pay under the table, or side “projects” from which they generate money, and I don’t even know any drug dealers.

      • Fist-o™ says:

        @Jakuub: Let me try to see where I read that…. Huh! Well according to THIS article, that’s a wrong / misleading figure:

        [moneycentral.msn.com]

        I’m willing to admit I was wrong! Or, at least, simply believed what I read somewhere. Of course… what’s the source for THIS article? *shrug*

        p.s. It’s the wrong beer now. (Sam Adams FTW!)

      • shorty63136 says:

        @Jakuub: I was about to say the same thing. Side/under the table gigs are a lifesaver.

      • The_Red_Monkey says:

        @Jakuub: The savings rate is what is scary. [tinyurl.com] talks about it a bit and you can find stats about how far savings have dropped since WWII.

  3. Skankingmike says:

    Less Junk Mail means, Less printing, which means those print shops relying on that revenue in turn will start cutting back or going out of business entirely.

    I know nobody likes Junk Mail but it employs, not only printing houses, but the art segment as well as photography. Also USPS rely on junk mail to sustain their business.

    so sure less junk mail is good for us who like trees and hate useless crap mail.

    But it’s bad for us who don’t want more unemployed people and a bad economy.

    • zentex says:

      @Skankingmike: I send it right back to them, so I don’t care. It gives me something to do in the mornings when it’s slow. :-)

      • Sarge1985 says:

        @zentex: I do as well, but with a twist. I take the junk fro CC-A and stuff it in the envelope from CC-B and vice-versa and since they pay the postage, viola! Jobs for the post office to deliver and jobs for the mailroom, and a job for someone to open each envelope and dispose of the contents. Hey, another job or three, Waste Management! Wins all around!

        • Darascon says:

          @Sarge1985: I <3 you. I thought I was the only person that did that. Even after they started putting the “customer tracking” barcodes on the return envelopes, I still do it.

          Competator’s offer. Check. STD pamphlet. Check. Monthly valu-shopper craptastic coupon book. check.

    • Fist-o™ says:

      @Skankingmike: What a ridiculous justification of junk mail. Surely you jest.

      Either that, or you work for the Gooberment.

      • Skankingmike says:

        @Fist-oâ„¢: Having gone to school for art and coming out with no real job prospects back in 2002 and now going back to school again for education, I can surely tell you that if you want to be a graphic designer good luck. If companies cut back on your junk mail, or people cancel their magazine subscriptions you will see even more “starving artists” and starving print operators.

        I don’t’ work for the government, but you need to understand that just because you hate junk mail doesn’t mean that it doesn’t create a lot of jobs that are highly specialized to a few particular fields.

        Design firms that create ads will loose that segment and cut the jobs of artists who are either new or don’t’ know say Flash. The graphic arts field is pretty sad as it is. And the slowly dying out Print shops will quickly die.

        Like I said the USPS employs a lot of people regardless if you like them or not if their bulk rate mail goes down they loose money thus jobs get cut.

        This economy can slowly spiral into a depression very easily if it’s not closely monitored.

        The last time we had a devastating depression like economy we got socialistic principles from FDR’s New Deal. Lets see what we get this time.

        • Gopher bond says:

          @Skankingmike: Your argument is ridiculous. It’s like telling me I should invite neighborhood dogs to take dumps on my lawn because it employes free lance pooper scoopers. Yes, the poor pooper scooper might need to find a new job but that doesn’t mean I need to have a lawn full of turds.

          In case you missed the analogy, Mr. Pooper Scooper, if your job depends on leaving turds on my lawn (or in my mail) then you’ll need to find a new job because I don’t want to support it.

          • Gopher bond says:

            @testsicles: nah, I digress, I just can’t pass up a pooper scooper analogy. I understand what you’re saying, it’s all connected and less junkmail, as annoying as that may be, has an impact on the economy. I get it.

        • highpitch_83 says:

          @Skankingmike: as a 3rd generation printer maybe I can provide a better perspective…

          1. The printing industry has been on a steady decline for years now (an average of 2500 shops close their doors or are bought out by much larger printers or online printers like Vista-Print every year).

          2. Smaller shops that are still alive typically clear less than a 1% profit margin and will end most fiscal years in the red (especially over the last 3-5 years). Many times turning a profit period is a means for jubilation!

          3. Any printer that closes as a result of a decline in “junk mail” is a result of not diversifying their client base and should have seen the writing on the wall. Not to mention that there are many printers that provide an inferior product and up-charge for every little thing along the way… just like any other manufacturing industry.

          4. The primary reason you’re seeing less “junk mail” is a direct result of postage increases and re-classification of the types of mail and their respective rates.

          As for the Graphic Arts/Design industry; the market was absolutely flooded w/ design majors throughout the 90’s and early 2000’s but the problem now is that people with BA’s are being under-cut by teens and adults that learned to use InDesign/Photoshop/Dreamweaver on their own or through community ed. and only charge $10-$20/hr for services vs the $100-$500/hr rates of a Design firm.

          Many businesses (especially small businesses) are starting to realize that they don’t necessarily need all the traipsing’s that a Design firm offers and that they can get by w/ a basic website/brochure/business card layout from the kid down the street…

          Lately I’ve fielded more calls from designers who are out of work and looking for a job than I am talking about print projects and it will only continue to get worse until things come back into balance.

          • DeeJayQueue says:

            @highpitch_83: As a designer AND a press op, I can add a couple bits of perspective as well:

            I agree totally, the print industry as we know it is failing. Print is becoming a commodity, not something as personal as it was, and computers and the internet are replacing traditional print media. Savvy print shops started switching to digital presses and copiers years ago, and have done pretty well by it.

            The kids complaining because they’re out of work now might want to think about going back to school or at least getting the “borders degree” in web design, or some form of online media. I’m kicking myself now for not doing that when I had the chance.

            What pisses me off about the fresh grads undercutting the established talent is that a lot of the time you end up with an inferior product, but it turns out to be moot because nobody seems to notice but you and other seemingly pedantic designer-types. But that’s a separate rant.

            • highpitch_83 says:

              @DeeJayQueue: “What pisses me off about the fresh grads undercutting the established talent is that a lot of the time you end up with an inferior product, but it turns out to be moot because nobody seems to notice but you and other seemingly pedantic designer-types”

              You nailed the problem! 3/4’s of the time it IS an inferior product but people are willing to accept it because the individual is “still in school” or was “very reasonable” from a price standpoint. However what most fail to see is the hundreds, thousands even millions of dollars of revenue in some cases that could’ve been secured had they made a slightly larger investment up front. I struggle to get that across EVERY DAY… the hardest part is finding others that care ;-)

          • Skankingmike says:

            @AtomicPlayboy: Peace doesn’t exist it’s a hippie liberal concept that animalistic humans can never grasp. Also, soldiers are never out of work if you have paid militia.

            @worrytron: There are thousands of studies that say it does, as does telemarketing. You or I may not find our selves moved by these advertising methods, but everybody gets fooled differently.

            All I’m saying is there are people who rely on a various array of jobs in this world and hating something is fine but realize when that something goes away those people become out of work , then start leaching off the government. Get enough of them all at once and you cause even more problems than we have now.
            And that poop scoping service proves how lazy many Americans are, and whoever first thought of it is a genius.

        • worrytron says:

          @Skankingmike: By that logic we should legalize pretty much everything, since it would give people jobs. There are hitmen that are having trouble finding work! Yes, the economy sucks, and advertising will be the first to take the hit. Such is the life of a designer. Junk mail sucks, and there is no justification for it, even as advertisement. It does. not. work.

        • zyodei says:

          @Skankingmike: This is a basic rehashing of the “broken window fallacy,” common in economics.

          The argument goes that it helps the economy to break a window, because it employs glass factory workers, window installers, drivers, etc.

          What it ignores is that money is fluid, and if it hadn’t gone to the window it would have gone somewhere else. For instance, towards developing new technology that enriches the future, or investments in productive goods or infrastructure, or making something that can be exported.

          It is this kind of economic ignorance that is an important part of why the American economy is falling apart.

          Of course, from your further comments, I suppose that you fail to see that the military is the greatest socialist program in American history, and a dangerous violation of free market principles. If the army or police you are “hiring” through the government fails to do it’s job or abuses it’s position, then what competitor is there to compete for the contract?

          None, because it’s an artificial state mandated monopoly.

    • nidolke says:

      @Skankingmike: Somehow your argument doesn’t sway me to like junk mail. I do the mail at work, and there’s a ton of it. Without credit card offers, there’s still a ton, so you don’t need to worry.

    • pjorg says:

      @Skankingmike: Why can’t we take all that effort and add actual value to the economy instead of just mindlessly employing people?

    • AtomicPlayboy says:

      @Skankingmike: Wow. This is like arguing against peace because it puts soldiers out of work. It doesn’t, by the way; it allows them to find more agreeable employment.

    • ADismalScience says:

      @Skankingmike:

      GDP is not necessarily a good measure of utility because it includes negative activities, like economic functions that destroy the environment. Junk mail falls in that category. Junk mail GDP is not utility and I wouldn’t mind excising it from our economy in favor of spam and/or direct sales.

    • Mary Marsala with Fries says:

      @Skankingmike: Yes, and while we’re at it let’s protect the slave industry, because we wouldn’t want all the people who pick, haul, prep and sell the slaves to lose their work!

      People employed doing bad things is just as bad, if not worse, than people unemployed. …You actually get that, right? Please?

      • Skankingmike says:

        @Mary Marsala with Fries: Do you buy things made in other countries? Chances are you do support Slavery. Hell even this country most clothes made here are practically slave labor.

        Or chocolate.. So go right out there and buy those Hershey bars!!! I’m sure those Africans that you can easily do some research on are lying about being slaves? NO?

    • edosan says:

      @Skankingmike: You know what, I’m not going to lose a lot of sleep if the junk mail industry implodes.

      If we’re lucky, maybe the same thing will happen to telemarketing too.

    • SigmundTheSeaMonster says:

      @Skankingmike: I disagree. The Credit cards already have return envelopes with Crapvertising on it (Collectible Gold Coins, Self-inking stamps, Insurance and coverage options…and other crap to tear off and burn). Most of the stuff is printed in China (hence the wonderful sale of +80 HP Indigo Digital Presses) or now India. So I doubt local designers and printers are affected. Good bye CC junkmail. Hello Extended Warranty junkmail!

  4. aftercancer says:

    I’ve gotten those too, and letters encouraging cash advances, transfers. Not for me thanks!

    • bwcbwc says:

      @aftercancer: Well the one set of cash advance/balance transfer offers I don’t mind is for low interest rates until the balance is paid off. That typically translates to an unsecured 50-60 month loan (paying at a constant 2+% of the original balance over the life of the debt) with a 3% origination fee and a 3-6% interest rate. In many cases that’s better than the rate I get quoted for a car loan, and I get to keep the title to the car. It also encourages me to limit the size of the loan to keep my credit utilization ratio down.

  5. thebluepill says:

    You mean Plasic Money doesnt mean your rich?

  6. blackmage439 says:

    “…the number of pieces of junk mail the average American receives has fallen dramatically.”

    Funny, considering I still receive my monthly or sometimes semimonthly offers from Amex and Citi.

    • thetango says:

      @blackmage439:

      Funny, considering I still receive my monthly or sometimes semimonthly offers from Amex and Citi.

      I’ve definitely noticed a huge drop in the number of offers I’ve received in the past few months. Our household used to receive 10-20 offers a week. Now I receive 1-5.

      And it has become much more difficult to raise my credit limit (which I typically did every 6 months).

    • Starfury says:

      @blackmage439: We get weekly offers from Chase, at the peak it was about 4 each per week. It’s down to 1 a week now.

    • Sunflower1970 says:

      @blackmage439: Not noticed a drop here. I get at least two to three pieces of BOA junk mail a week, and my husband get about the same. We’d be more than thrilled to figure out how to get them to stop sending us this stuff. (Without canceling the cards that is)

  7. yzerman says:

    Lately I’ve been getting notices of credit limits being lowered. It seems if I pay my cards down the banks are lowering the credit because they fear I will respend what I am paying back.

    Personally I don’t care. My only fear is I don’t have a emergency fund at the moment as I am trying to get my spending under control as I pay the lowest cards down first.

  8. ionerox says:

    Odd, Citibank just raised my credit limit a lot. Just in case I want to buy a car using their Visa card.

    • timmus says:

      @ionerox: I find that they do this when you pay your card off. They probably are worried you’re planning on setting it aside.

    • The_Red_Monkey says:

      @ionerox: I pay my card off every month and I just got a notice they are raising my limit. It will now be over the point that I can pay it off every month if I use. But since I get cash back I use it to pay for my gas and then pay it off at the end of the month.

  9. pixiegirl1 says:

    Umm if we had money in the first place would we need credit cards? Just saying is all. I will say the amount of credit card apps I get in the mail have significantly decreased over the last few months. However I haven’t gone a week with out getting those freaking “checks” from the credit card company’s I have cards with telling me to spend spend spend. I hate those checks with a passion, at this rate I’m going to have to get a new shredder.

    • CityGuySailing says:

      @pixiegirl1: We need credit cards to buy things over the internet. Unless we no longer want to buy things cheaper than Brick and Mortar, that is…

    • malvones says:

      @pixiegirl1: funny, I noticed I was receiving a lot of checks from my CCs as well. also, the interest rates they offer now are far lower than, say, three months ago. by far one of the most predatory activities they undertake, considering the interests are usually much, much higher than your std. purchase APR.

    • Anonymous says:

      @pixiegirl1: I have money, but I happily use credit cards. For a long time I refused the offers until someone offered me a no-fee unsecured card, then I jumped on it. People that don’t have money and use credit cards need to have their heads examined, especially if they’re willing to pay a fee to have a card… I don’t see how people can endure living in debt and paying interest constantly, it just doesn’t make any sense to me. My cards are paid off monthly and I never pay interest. I do not place anything on a card unless I have the money to pay it off available in a savings account. If you do this, you’ll never pay interest, while the bank will pay you interest on that money you already spent!

      They survive and this is possible because most people are incapable of handling credit cards properly (including my parents).

    • XianZhuXuande says:

      @pixiegirl1: I have absolutely no debt, but I love credit cards. Rewards, buyer protection, chargebacks, convenience, easy bank account management, less time spent interacting with my bank. It’s all good. And thanks to the rewards (and the chargebacks) I have much more money than I ever would have had without them.

      A person’s milage may vary if they aren’t able to use plastic with the same responsibility as they would cash, however.

  10. OhYeahAlright says:

    I can’t get a student loan for college now, but everyone else doesn’t have to deal with junk mail. Wonderful.

    • Tux the Penguin says:

      @OhYeahAlright: Can you not get the loan for tuition or is it you can’t get a loan to cover tuition plus living expenses?

      Have you looked at going to a 2-year school to save some money and possibly work? Live at home, work as close to full time as possible and, in exchange for not paying rent, agree to put 75% of whatever is left over after tuition into savings for the final 2 years at a 4-year college. Yeah, it sucks. But the idea of living off of debt for four years does sound stupid, doesn’t it?

    • tamoko says:

      @OhYeahAlright: Sorry dude,I feel your pain. I somehow avoided that problem by applying a good deal of time before all this crap started to churn. I’m entering grad school next March, and although I have the funding for the first half of the year, the second looks like it could go 50/50. I think Tux’s advice about attending a 2 year college is pretty sound. Also, you could try what I did to get through college, although it might not be what you would be comfortable doing – I worked two jobs, one full-time and another part-time for over two-and-a-half years, and took more than a full load of classes to maximize the value of the money I was spending. I also rotated through multiple internships to gain professional experience that would later pay off.

      Work hard, but don’t go crazy, and start digging like mad for scholarships, awards, writing contests, anything that will contribute to getting bills paid.

  11. Lars says:

    James Surowiecki for one is not so convinced by the Times piece:

    [www.newyorker.com]

    • Elcheecho says:

      @Lars: @Fist-oâ„¢: That article does their calcs based on 2001 report, which assumedly uses 1999 data. Wasn’t the issue the fact that, while real wages remained flat during the past 8 years, consumption went up?

  12. Anonymous says:

    “There is an upside to all of this, of course, the number of pieces of junk mail the average American receives has fallen dramatically.”

    Unless you are like me and work for a company who sends it for the banks.

    • Anonymous says:

      @PandoraAbadon: Junkmail = spam. Yes, you are a spammer. Both junk mail and spam email are forms of advertising, a respectable industry, but things such as junk mail, spam, local ad sheets thrown on my lawn, etc share four characteristics: Low quality content, extremely low effectiveness, extremely low costs to produce, and lastly, widely considered to be a nuisance.

      UPS and FedEx deliver my packages. My bills, payments, and personal correspondence are done on-line or via txt msg. Every single thing of relevance I receive in the USPS mail now has a parallel electronic route, yet I still receive a pound or more of heavily inked paper a week.

      I’ve placed a recycling barrel directly below my mailbox, and as soon as I’m sure there is nothing of actual relevance in the daily bundle, down it goes. Unopened, unread, un-anything except the eventual shredding.

      Consider for a moment the total life-cycle of that useless delivery. It begins with trees, clay, crude oil, and a staggering amount of clean water. The trees: Cut. The clay: Open pit mined. The oil: Do I even have to say? The water: Piped form a deep well, stream , river, lake, etc… and replaced later with “treated effluent”. After all the materials are collected and assembled, and the “content” added, it goes on a truck burning, yep , more crude oil, and is hand delivered to my recycling box.

      Presumably every company involved in this process except the USPS is there to make a profit, pays its bills, employs people and allows them to pay their bills, yet the entire enterprise fails to perform its intended function: I do not even turn the last-chance-fantastic-savings-open immediately-special-offer right-side up to read it. It does not pique my interest. I do not say to myself “Man, I’m glad I found out about THIS!” It is delivered, it is shredded, (consuming more energy, but hopefully providing some protection from the companies that spend freely on junk mail but are stingy on fraud prevention)

      Now, somebody must be swayed or drawn in by this barrage of offers, but what is the percent for your employers clients? .001%? .00001%? Does this sound like a sustainable business adding value to peoples lives? Yes, it must still be profitable or it wouldn’t happen. OR is that true? Anyone in the chain being subsidized by the government? The USPS.

      No, the USPS doesn’t get a yearly check from the government, but all of its startup capital was provided by the taxpayers, and the USPS has no business competition by government decree. It is held above the economic fray, and by simple deduction, so is the content it delivers.

      Junk mail and spam exist not because they are effective, but because they are cheap. Postal mail is cheap because it is subsidized. I don’t want it. No one I know wants it. Let the USPS be subject to market forces, and junk mail will expire like last weeks “LAST CHANCE OFFER”.

      Neighborcat

  13. AMetamorphosis says:

    I can’t get my CC companies to stop sending me cash advance checks and offers for 0 – 5 % interest for a specified time limit.

    I’ve spomken with several others about this and it seems to be a pattern of trying to get those with good credit to go deeper in debt while they reduce the limits of those that they fear will default.

    Although it does not affect me personally since I carry no CC debt, it has to be concerning to those who’s limits are reduced and thereby their debt ratio’s rise.

    I too fear that CC default will be the next big gloomy headlines in the coming months.

    • billbillbillbill says:

      @AMetamorphosis: I echo this one. I spent the last 6 months paying off my chase account. Every month, I would get a letter that said “We noticed that you made a large payment to your account, we hope that we are still your #1 card.” It then had a bunch of balance transfer checks included. I always chuckled that they are very interested in you staying in debt. Oh well, I am credit card debt free now and am planning to keep it that way. No Chase Freedom, just freedom!!!!

  14. TheFuzz53 says:

    I’ll second the point on junk mail. I got my first CC offer in the mail this week in like 2 months.

  15. Corporate_guy says:

    When I log into American Express to pay my amex weekly as I always do, they now cover up the pay bill button with a warning that what you are seeing is not yet a bill. You have to close the warning before you can click the pay bill button. I guess frequent online payments are hurting the potential for late payments and interest.

    • Tux the Penguin says:

      @Corporate_guy: I noticed that today as well. I’m tempted to call them up and ask what their preferred method of paying is: monthly? I would think that the quicker they get their money back, the happier they would be.

      But who knows.

    • VigilanteKitteh says:

      @Corporate_guy: Online payments FTW! That’s the best way to prevent late fees.

      • usa_gatekeeper says:

        @VigilanteKitteh: I do monthly BofA online pmts to a BofA Visa and recently picked up a “LL Bean” Barclays Visa … noticed their T&C said if I pay via online pmt (ie., other than mailing in a check with the coupon), I had better add FIVE days to insure on-time pmt. Wow!! I then read the BofA T&C and noticed the same thing, which BofA never invoked probably because it was an internal BofA transfer.

        Also, this Barclays Visa bill arrived 10/25, due SUNDAY 11/09 (honest!) = so it must arrive by Fri 11/7, MINUS 5 days because of online pmt = must arrive by SUNDAY 11/2 = must arrive by Fri 10/31 !!! Lesseee, I received it the 25th and have to make sure pmt arrives by the 31st to be absolutely sure they can’t pull any crap.

        Guess how often I’ll use that card. Not!

        • econobiker says:

          @usa_gatekeeper: “I pay via online pmt with the coupon), I had better add FIVE days to insure on-time pmt”

          Up to 5 days for them to use your money for free, see now…

          Wasn’t this online payment stuff supposed to be quicker than USPS mail and allow everyone to save the price of a stamp???

        • mmmsoap says:

          @usa_gatekeeper: so it must arrive by Fri 11/7, MINUS 5 days because of online pmt = must arrive by SUNDAY 11/2

          I think you’re reading that wrong…I think they mean you should schedule your payment to go out five days early, to ensure it gets credited in time. Many people assume internet bill pay can affect your account automatically (in some cases yes, others no) while they still consciously add the extra days for USPS delivery with snail mail payments.

          You get your bill the 25th, they’d like you to schedule it to be sent out by the 4th, ensuring it gets there the 9th…(or, perhaps, 3rd and 8th, depending on how they roll their Sundays…but if they say it’s due the 9th, then that means they have to accept it on the 9th with no penalty.)

    • Sunflower1970 says:

      @Corporate_guy: That’s weird. I just set up a payment for Friday with my AMEX card today and didn’t see this warning. I’ll keep watch to see if it does appear at some point though…

    • vastrightwing says:

      @Corporate_guy: Yes, One of my tricks is to make 2 monthly payments to Amex because that totally avoids the late payment problem. I tried to over pay my bill to avoid an interest charge for the next month only to find they made it impossible to over pay. So now I push 2 payments per month from my bill pay service and do it that way.

      • JustThatGuy3 says:

        @vastrightwing:

        Why not just pay the bill every month when you get it? If you pay by the due date, you don’t incur any interest charge – you don’t need to overpay it to do so.

      • MsAnthropy says:

        @vastrightwing:

        That’s very odd – I make weekly payments to my AmEx and have never seen that. What kind of AmEx do you have?

        I guess one reason they may be doing that is actually to point out to people that they are paying BEFORE the statement date – in other words, if you still have a balance when the statement closes, you are still going to need to make a payment before the bill due date, or you will find yourself being hit with late fees. I’m guessing that not every early payer realizes that – I mean, if you have a $500 balance and pay it down to $100 before the statement hits, so the statement has a $100 balance and a $15 minimum payment due by X date, you are NOT exempt from paying that minimum payment just because you paid far more than that before the statement closed. The $400 payment would have been in the previous billing cycle, so you still need to make a payment of at least the minimum before the due date. I suspect AmEx are trying to minimise the number of “goodwill” refunds of late fees they have to make to customers who don’t realize this!

        I’m intrigued by that button you see when you make a payment – I paid half my balance off today (the rest will be paid on Friday), and there was no such message covering the payment button. I have no payment due at this time. Weird.

  16. HRHKingFridayXX says:

    We were broke 5 years ago, but had houses and jobs that served as collateral. I don’t think this is a surprise conclusion for the credit card companies.

  17. scoobydoo says:

    I’m not seeing it either; Chase just sent me 2 card offers with a high limit and 2 years at 0%.

  18. KristinaBeana says:

    OK, I actually have a question for you all. Does this mean that stores will not back off pushing their own cards, or do they still bring in enough money to make it worthwhile? I know that Macy’s will start folks with credit limits as low as $100, but will their credit card backers still allow them to basically force their employees to push the cards?
    I say force because I know that raises are partially based on getting credit card apps, and new employees can be terminated if they have not gotten enough new apps in their first 90 days.

    • worrytron says:

      @KristinaBeana: Don’t know about retail, but my wamu branch tried the hard sell on me this morning for their credit card. And then, after that, to open a business account. Backing slowly away…..

      • ludwigk says:

        @worrytron: Whenever my bank (BoA) tries to offer me savings accounts and credit cards, I have a couple stories I tell them in response:

        1) I had my savings with you guys, but you messed up my accounts, and slapped on a bunch of fees, so I moved them to another firm.

        2) I had my credit card with MBNA, which you bought, but you opted not to support my bonus program, so my card was spun off to a different credit card company in the process. You “could” have had my business, but at some point you opted not to.

        I used to be a bit more evasive and reserved, but now, they seem to throw this stuff at me whenever I have a “large amount of money” in my checking account. Since when is ~$2500 a high check balance? That’s like a small discretionary cushion, and one paycheck just happened to hit my account. Sheesh.

  19. ADismalScience says:

    A few facts, which is why I disagree that credit cards will be a crisis of anything resembling the importance of the mortgage market:

    1.)Loan-loss reserves are only really relevant to companies like AMEX, which do the actual lending. Credit limits are going down because companies like VISA and Mastercard sell debt, and the market for it has drastically reduced.

    2.) Profits for credit companies will go down as spending tanks, reducing fee revenue, and credit card companies will need to lay off employees. From a loan-loss reserve perspective, though, most of the credit companies are in pretty good shape, which won’t lead to the cascading failure of CDS’s and such like with housing.

    3.) With the reform bill, it’s much harder to “walk away” from your credit card debt like you can with a house. Loan-loss reserves will not be subject to the same, sudden collapse in value like credit hedges in the mortgage arena that led to sudden, massive writedowns.

  20. chrisjames says:

    the number of pieces of junk mail the average American receives has fallen dramatically.

    Bullhonky! Maybe. I’d agree if I wasn’t now getting junk mail from USAA. If the banking-messiah is pushing for business, that correlated with the credit crisis, then I’d wager we’ll be seeing the mailers fly. Or maybe USAA is just capitalizing on recently easing membership requirements, however slight.

  21. Morac says:

    I just had Citi close out all my unused cards on their own. Apparently they’re trying to limit the amount of total potential credit out there.

  22. Anonymous says:

    I work in the direct mail industry for a company that is largely repsonsible for many of the credit card and mortgage offers you get in the mail. Aside from the banks who make their money on your interest and late fees, there is quite a chain of suppliers along the way that are supported by this.

    The printer runs a couple millions forms per job and makes reply envelopes. A card printer makes those fake cards included in the mailing. The lettershop personalizes each letter, tacks on the card, folds, stuffs and mails the letters. The trucking firms move skids of mail to USPS sorting facilities. The USPS obviously delivers the mail.
    Like many of you, I find getting the same offers in the mail all the time a little annoying, but it pays my salary, so I don’t complain too much about it. Like many of you, my email address is what I choose to protect over my mailing address.
    In some cases, I keep the solicitations and bring them to the office when they have done something unique. Anyone ever receive the fake cigarette packs from Camel? Those were expensive… wish we’d done them…

    • Evil_Otto would rather pay taxes than make someone else rich says:

      @krylonultraflat: Why should they care about looking like total bastards? These are BANKS, they exist to make money off of you.

  23. rorschachex says:

    Less junk mail? Eh. I just got a new mail shredder a few months back for the impending ID fraud crisis that people think/are convinced is going to/is happening.

    Plus, who doesn’t like shredding their mail? (C’mon, it’s a lot more fun than writing checks :) )

    • Froggmann says:

      @rorschachex: Ok I’m not that strange. I too love shredding stuff. Bills, etc. is fun enough but have you ever shredded CDs? They always give such a satisfying crunch as they are rent-asunder by the gnashing jaws of a shredder. Makes you want more… more…

      Hold on the nurse is at the window…

      • Starfury says:

        @Froggmann: Last year we replaced our strip shredder with a cross cut one that also shreds CDs and Credit Cards. I get a kick out of doing the shredding. CDs are a lot of fun to run through it, very satisfying crunch.

  24. Plankton420 says:

    Anyone remember the ending of “Fight Club” (the movie)?

    Not such a crazy idea after all, is it?

  25. bohemian says:

    WaMu sends me a credit card offer once a week. This started the week they went belly up.

  26. vastrightwing says:

    Here credit card companies, you’re not creative enough, you have the option of sweeping over payments out and zeroing customer’s balances. You can charge customers a fee for making too many transactions per month (before you do that of course, change the terms of agreement, ok?) Charge a monthly fee for card inactivity just like phone cards do. Charge a big fee to redeem loyalty points or air miles (oh, you do that one already). Work a deal with retailers to sneak in small monthly service fees, like Best Buy to join a club. Add mysterious charges to customer’s accounts and don’t remove the charges even after customers complain. Open call centers up in foreign countries and allow them to sell customer data and give you a share of the profit. Charge $1 month for a “green save the earth” program and give free CFL light bulbs to customers. For a fee, I will come up with even more great ideas! Lazy executives! And they want congress to bail them out?!!!!

  27. captadam says:

    BofA just informed me yesterday that–CONGRATULATIONS–my new credit limit is $22,300! On top of my other credit limits! (I have a handful of credit cards I don’t use.) Uh … since my balance doesn’t get out of the hundreds at any one time, why do I need $22,300 in available credit, again?

  28. Rectilinear Propagation says:

    I don’t think I’ve gotten more that 3 credit card apps in the mail this YEAR. All of them due to my college ratting me out to whichever company wanted me to sign up.

    But then, not even the credit bureaus are aware of my new address even though I’ve been living there for over a year. I’m kinda surprised about that…

  29. krylonultraflat says:

    Translation: “We never lowered the fees after the dotcom bust, so we can’t raise them any further without looking like total bastards”

  30. JohnDaniel says:

    I think the card companies will continue to push the cards fairly heavily. I had one company lower a credit limit on me but during the good times they are the ones who raised it and sent me a letter saying congratulations.

    I think unless a majority of people decide to default they will still have enough coming in that they won’t be in danger of failing. So they really don’t have a reason to stop sending applications they can just be more selective on who they accept.

  31. Keter says:

    I’m not sure what to make of this, particularly the question of who is getting new credit offers and who isn’t. I get them almost as often as ever, but now there’s a twist: I’m getting HIGHER offers. I carry a single credit union issued card with a $5K limit on it (all I asked for, all I need), which I pay off every month, sometimes twice a month if I’ve had a big purchase. I’m debt-free other than my mortgage. So what makes these companies think I suddenly want to run out and incur $30K worth of unsecured debt? Weird…

    But on the unexpected but positive side, my credit union sent me an unsolicited fixed-rate mortgage refinance offer, which I am likely to accept, actually, because it will pay off the mortgage in half the time for the same payment – and I get to wave a finger at Countrywide. ;o)

  32. Oirectine says:

    I just took half of a bonus from work and paid off two cards. When I called to make sure the accounts would get closed, it was like pulling teeth with these guys.

  33. Bahnburner says:

    The key is in making us believe there’s a credit card crisis…that way, the banks can get wide latitude in raising rates (they don’t have that already?) and maybe the Government will need to “save” us by bailing out crappy companies who “just thought the market would keep climbing…”

  34. zibby says:

    Hopefully they’ll stop sending me 5-10 applications for the damned things every week.

  35. Trencher93 says:

    BoA hasn’t realized it – I got an unsolicited offer yesterday.

  36. AbsoluteIrrelevance says:

    I think the banks/ CC companies are realizing they are running out of fee and % increase options to offset defaults. Two examples from Citi- 1) I’ve seen two promos for “use your debit as a signature purchase and we’ll give you something.” This is because signature debit purchases get the issuer more fees than normal credit card transactions. I don’t think I’ve seen this kind of promotion before the recession. 2) Citi has sent me 3-4 letters to “deposit $15,000 into your account and we’ll give you X points.” Nothing says, ‘We need your money!’ like a letter tells me to pull thousands of dollars out of the air. It’s not like they DON’T know how much money I make.

  37. tamoko says:

    This is the stuff of my nightmares… I’m starting a new, very well paying job next week, and I’m just itching to throw most, if not all of my free cash towards whittling my CC debt down. On another note, Discover just raised my limit again…. I’m torn about whether this is the next shit to hit the fan or not?

    • frodo_35 says:

      Save half the cash use the other half to pay down the debt. It can save your ass to have a cash nestegg.

  38. kwsventures says:

    Two things still amaze me.
    1. People still do cocaine.
    2. People still use credit cards and don’t pay off the balance each month. Paying credit interest is very stupid.If you can’t pay off the card each month, you are living above your means.

  39. theblackdog says:

    I have noticed lately that the only junk mailings are coming from companies that I do business with. I just got an offer from my credit card company last night for 0% on a balance transfer for 1 year.

  40. krom says:

    Why are there still “pre-approved credit card” offers going out? I don’t understand. It’s not like I have awesome credit, either. Then again, maybe I appear to them to be in the sweet spot between never pays and pays too reliably.

    On top of it, just the other day two of my cards sent me cash advance checks. This time, Discover’s cash advance checks came with a helpful hint that you can now do a cash advance directly into your bank account! That’s so awesome! And to make it all the more convenient, they pre-filled-out the first check for $1,000!

    (I actually like Discover by and large, but I don’t like the predatory cash advance selling that all the cards seem to be doing lately).

  41. econobiker says:

    Maybe these credit card companies are finally realizing that there are few new “negative profit centers” (profits from negative actions such as over-card-limit or late fees, etc) still available.

  42. Anonymous says:

    I got myself deep in dept using credit cards to open a business 4 years ago, after the business opened I put all the cards into a debit program and made good on the monthly payments for over 3 years. Due to the economy I have lost the business and have not been able to make the monthly payment. The cards have all jacked up the rates and late fees and it seems as though I will be back in short time where I started. Does anyone know of anything I can do in a situation like this, these were personal cards not business cards. I fear that my next step might be bankruptcy. Thanks

  43. cottiescot says:

    If MBNA was the frying PAN BofA was the fire.. those jokers jacked my APR up to 34.9 and then 39.9. Needless to say I paid that off and I only rarely make purchases with it again. It started off as a super cool VW GTI card then it went to a lame VW golf.. then VW AG dropped MBNA as a provided so when I got a new card its just white… like there were in the early 80’s

  44. 10felines says:

    I lost my job a year and a half ago and got unemp for a while but that stopped and I had no where to go except my credit cards ( Or Walmart for a job). Maybe the latter was the better of the two. Anyway, no one would hire me (the old too qualified) so I decided to start a business. Therein lies more debt. Ok I know I had other options but it didn’t feel like it. Now I have a house that is paid for and a vehicle that is paid for but ~$50,000 in cc debt. Oh and no one will make me a consolidation loan even with my house as collateral. So My question is….is there a source of information about my options….I’m at the point where I missed a payment and one of the cards raised my rate to 30%. Like that is going to help get them their money…. So is it bankruptcy, or credit debt companies who can reduce you debt and work out a payback schedule. Both destroy my credit but it seems not to matter since no one will give me a loan anyway. Anyone as dumb as me to have been here? Where do I go for unbiased advice?

  45. loquaciousmusic says:

    That was my tip, sent partly because AmEx just “pre-approved” me for a new card. Hmmmm.

  46. AuntNi says:

    Bank of America must not have gotten the message yet. On Friday, my company announced it’s closing. My last commission check bounced. But BOA emailed me Monday that they’ve raised my credit limit to over $26K. Crazy!

  47. Vastarien202 says:

    I have NEVER had a credit card, and I am doing just fine.
    As far as I’m concerned, those plastic pushing butt-nuggets will just have to do without me.

  48. quail says:

    My current CC companies are sending me even more junk. Yea, I’m not getting offers from unknown CC companies but the ones I do business with already are trying to eek more money out of me.

    Just glad that I don’t have much debt at all with my CCs.

  49. flowerofhighrank says:

    AmEx just sent me the nicest letter, explaining that my credit limit has been lowered to $1300. I pay them off every month. I pay early. I pay OVER THE BALANCE. I just bought a house, so thousands in renovations and necessities flow through my wallets. Hey, if they don’t want my business…

  50. bishophicks says:

    I have two credit cards with a collective limit that is about 9 times my monthly take home pay. I keep expecting them to lower my limits, but it hasn’t happened yet, probably because I pay the cards off every month. I also keep expecting the junk mail to drop off, but it hasn’t. I still average one or two credit card offers per day.