Author Topic: Bank Shenanigans  (Read 4074 times)

Offline RuggedCyclist

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Bank Shenanigans
« on: February 26, 2016, 05:55:14 PM »
So I recently went over my credit limit on my credit card, long story short I use it to pay bills, I hadn't been paid in a while, and I have a pretty low credit limit.

And you know what happens? I immediately get three credit card offers in the mail, and the bank raises my credit limit by 36% after I pay it off (almost in full) after getting my money. Which isn't that much in terms of dollar amount, but it's a pretty substantial jump.

Seems rather predatory to me, especially the sudden jump in credit card offers. But that's why I chose to be financially enlightened at a young age, I guess.

Offline bcksknr

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Re: Bank Shenanigans
« Reply #1 on: February 27, 2016, 04:48:23 AM »
     Credit cards, in and of themselves, aren't necessarily a bad thing. To do many transactions they are almost the only way. We have two credit cards; both cards have cash back or travel points. We use them wisely and pay off the full balance every month with never a late payment. It really makes the card issuers annoyed (at least in my mind); I'm there least profitable type of cardholder. I spend as much with plastic as I can and recently bought a S&W M&P15 with cash back rewards. As long as you pay the balance each month, on time, it helps your credit score. I also keep enough "hard assets" readily available in case the grid goes down, to get by. You do have to watch yearly fees though; try to get "no fee" cards. 

osubuckeye4

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Re: Bank Shenanigans
« Reply #2 on: February 29, 2016, 02:49:31 PM »
So I recently went over my credit limit on my credit card, long story short I use it to pay bills, I hadn't been paid in a while, and I have a pretty low credit limit.

And you know what happens? I immediately get three credit card offers in the mail, and the bank raises my credit limit by 36% after I pay it off (almost in full) after getting my money. Which isn't that much in terms of dollar amount, but it's a pretty substantial jump.

Seems rather predatory to me, especially the sudden jump in credit card offers. But that's why I chose to be financially enlightened at a young age, I guess.

I don't think that's predatory at all (raising your limit after you paid off an overdrawn account almost in full within a day or two of "whoops'ing")



Now, if you went over your limit and the bank called and said, "hey... don't worry about paying us back, we'll just bump your limit up by 40% and add the overage fees to your interest accruing balance", that would be predatory.

Offline DWSDVSE

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Re: Bank Shenanigans
« Reply #3 on: March 01, 2016, 06:12:51 AM »
One time, I got my credit card stolen by some scumbags in Mexico and they ran it up, maxed it out overnight. Next day, my first notice is an email saying "hey we've now given you more credit" they MORE THAN DOUBLED IT and then when I looked into it, I figured out what was up. Called the folks up at Bank of America and asked them about it and they shut the card down, but let me keep the limit. Since I was a sophomore in college at the time and the credit limit was now greater than my taxable income...that seemed foolish. But, yeah, I guess they do it as a service since they think you're a good customer and don't want you hindered by limiting your credit for no need. (In my case, I'm still not sure how I should have been able to qualify for so much, but that's probably not your case.)

Offline RuggedCyclist

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Re: Bank Shenanigans
« Reply #4 on: March 01, 2016, 11:11:42 AM »
I don't think that's predatory at all (raising your limit after you paid off an overdrawn account almost in full within a day or two of "whoops'ing")



Now, if you went over your limit and the bank called and said, "hey... don't worry about paying us back, we'll just bump your limit up by 40% and add the overage fees to your interest accruing balance", that would be predatory.

I think flooding somebody's mail with credit card offers when they go over limit and their credit score gets hit is a bit shyster-ish. I actually don't think it's "predatory" per se, because I view it as my responsibility to see through that stuff.

To me it seems like they just want to capitalize on somebody that will run their credit cards up. But again, if I thought that was wrong I wouldn't have a credit card.

osubuckeye4

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Re: Bank Shenanigans
« Reply #5 on: March 01, 2016, 12:24:00 PM »
I think flooding somebody's mail with credit card offers when they go over limit and their credit score gets hit is a bit shyster-ish. I actually don't think it's "predatory" per se, because I view it as my responsibility to see through that stuff.

To me it seems like they just want to capitalize on somebody that will run their credit cards up. But again, if I thought that was wrong I wouldn't have a credit card.

I guess I would need to know the timeframe.

If you got a bunch of offers the next day, most likely it was just weird timing. If they all came 3-4 days after you overdrew, then it could be predatory in nature. Hard to really say.



The only reason I type this, is because I get somewhere between 15-20 credit card offers per month, and they usually come in bunches. Some days there will be offers from BoA, Citi, Amex. Other days I'll have Prosper, Barclays and Sears (on behalf of some CC company). I don't think there is really anything nefarious about it, I just happen to be on their pre-approved mailing list.


I get the same thing with auto insurance. It's funny, some days I'll get 3 different State Farm agents mailing me the exact same offer, just with different mailing addresses/agency names... it has nothing to do with missed payments or them being predatory.

Offline DWSDVSE

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Re: Bank Shenanigans
« Reply #6 on: March 01, 2016, 01:39:27 PM »
Heh, State Farm really needs to get their mailing system in order. They send us mailings from different reps as well as their main address. Seems wasteful. Oh, well, free markets

Offline Prodigy

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Re: Bank Shenanigans
« Reply #7 on: March 01, 2016, 02:37:46 PM »
It really makes the card issuers annoyed (at least in my mind); I'm there least profitable type of cardholder. I spend as much with plastic as I can...

I promise you that they are not annoyed.  They absolutely love it every single time you swipe that card, wherever it is.  Every time you swipe it, they are getting at least 2-3% from the merchant.  I constantly hear about people who hate credit card companies and think they are getting a great deal with 0% APR or paying it off every month "They'll never get my money!".  Well, they are getting your money in the form of increased cost of your product because of what they charge the merchant in fees.

That's not to say don't use credit cards ever, I just wanted to point that out.  Personally I haven't had or used a credit card in nearly 10 years now - debit card through my credit union works just fine for anything I ever need.  I wish more merchants offered discounts for cash/debit...

Offline The Spartan Dad

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Re: Bank Shenanigans
« Reply #8 on: March 01, 2016, 04:13:54 PM »
I promise you that they are not annoyed.  They absolutely love it every single time you swipe that card, wherever it is.  Every time you swipe it, they are getting at least 2-3% from the merchant.  I constantly hear about people who hate credit card companies and think they are getting a great deal with 0% APR or paying it off every month "They'll never get my money!".  Well, they are getting your money in the form of increased cost of your product because of what they charge the merchant in fees.

That's not to say don't use credit cards ever, I just wanted to point that out.  Personally I haven't had or used a credit card in nearly 10 years now - debit card through my credit union works just fine for anything I ever need.  I wish more merchants offered discounts for cash/debit...


My understanding is that there is a fee for merchants to accept debit cards too. Depending on the platform, the debit fee is either equal to that of credit cards (think Square, etc.) or lower. Even when lower, it's still closer to the credit card fee than for cash. If credit cards increase the cost of a product, which I don't think is correct, then debit cards do also. There is also definitely a fee you overlooked for handling cash that is not present with credit cards  (sticky employee fingers, hiring a security company, employee time driving to the bank for deposits, increased transaction times, etc). The marijuana merchants in legal states are getting raked over the coals by being forced to only deal in cash. They have had to go so far as to spend significant sums on ex LEO and Military specialty security firms to do nothing but guard and transport the cash (not the crop!). 

Merchants love credit cards. Overall, they make more money than when customers pay cash. If you pay your credit card balance off each month, it's a win-win-win scenario for customers, merchants, and credit card companies. Of course, if you don't pay your balance off, it's just a win for the last two.

Credit cards were invented by this guy who didn't realize he forgot his wallet until after he finished a meal at a nice steakhouse. He had to go home to get cash and was very embarrassed. To solve this, he created a card, called the Diner's Club, and convinced several area restaurants to join. The restaurants didn't raise their prices or charge cardholders extra and the Diner's Club got a small portion of each use. The Diner's Club guaranteed the bill on every use so absorbed all the risk.

Well, the restaurants were happy to absorb the small fee because their revenue shot up. Merchants found people were willing to spend more money, more often while using credit cards than with cash. This more than offset the fee they paid. It also absolved them of dealing with deadbeats. Other merchants begged to join and more credit card companies sprang up.

I've never understood the point of a debit card other than to get cash out of an atm. I usually use cash but credit cards have definite advantages. They extend warranties, provide cash back, and sometimes automatically provide insurance. They also provide significantly greater security and protection than debit cards in an era where identify theft and fraud is rampant. To me, using a debit card on the internet or even in a store is like walking through the bad part of town with your eyes closed while waving a bunch of 100s around.