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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19222  
Subject: Credit Card Limits Bogus? Date: 12/31/2007 9:36 AM
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http://biz.yahoo.com/allbiz/071210/4974159_id.html?.v=1&.pf=banking-budgeting

Interesting.
Annoying.
Enlightening.

AM
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Author: billjam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12215 of 19222
Subject: Re: Credit Card Limits Bogus? Date: 12/31/2007 1:20 PM
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Just pay your balance in full each month and you won't care what the interest rate is.

That, BTW, is how credit cards originally were intended to work. They were a convenience for business travelers so they didn't have to carry large amounts of cash. You were expected to pay the full balance each month. Only later did credit cards become a means to make unsecured loans and earn high interest rates for banks. Even then, in the beginning, the banks' main income was from the merchant discount fees. Not their fault that consumers have no willpower when it comes to spending money they don't have.

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Author: TurkeyBreath Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12216 of 19222
Subject: Re: Credit Card Limits Bogus? Date: 12/31/2007 1:27 PM
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Just pay your balance in full each month and you won't care what the interest rate is.

That, BTW, is how credit cards originally were intended to work. They were a convenience for business travelers so they didn't have to carry large amounts of cash. You were expected to pay the full balance each month...


We had 30-days to pay the balance without being charged for taking 30-days.

TB

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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12217 of 19222
Subject: Re: Credit Card Limits Bogus? Date: 12/31/2007 2:15 PM
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Just pay your balance in full each month and you won't care what the interest rate is.

That, BTW, is how credit cards originally were intended to work.


Actually, back in those days they were called "charge" cards, not credit cards. Many retailers also offered charge accounts, with the same expectation of payment.

Down at Phipp's your credit's great.
Ask today for a Phipp's-O-Plate.


In the 50's all the major stores in Kansas City used the Charge-O-Plate for customers' convenience. Each store kept its own accounts, but the customer used one metal plate which each store notched in the location corresponding to its stamping machines at the registers. If you had an account with them your plate would fit. My mother's looked like it had been attacked by rats.

Widespread "revolving" credit eventually wound led us to bank cards, the ancestor of VISA, etc., which I remember first in the late 60's.

Phil

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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12218 of 19222
Subject: Re: Credit Card Limits Bogus? Date: 12/31/2007 3:27 PM
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While these responses are interesting, they miss the point.
The credit card companies, according to the article, pull a little underhandedness on the cardholders. Perhaps that's ok with you all, but I find it rather offensive. If the limit is $10K, then a person SHOULD be able to charge any amount they feel like charging -- up to and including their "limit" -- without penalty and without having your credit report zapped.

That was the point of the article - I think.

AM

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Author: 0x6a74 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12219 of 19222
Subject: Re: Credit Card Limits Bogus? Date: 12/31/2007 3:35 PM
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In the 50's all the major stores in Kansas City used the Charge-O-Plate for customers' convenience. Each store kept its own accounts, but the customer used one metal plate which each store notched in the location corresponding to its stamping machines at the registers.


ah .....charge-o-plates ..

my recollection is Mom had different plates for the different stores ..
( but that was Salt Lake, not Kansas City .. proabably fewer stores )


=

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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12220 of 19222
Subject: Re: Credit Card Limits Bogus? Date: 12/31/2007 3:38 PM
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The credit card companies, according to the article, pull a little underhandedness on the cardholders.

They're banks! What do you expect?

Devise a regulation to nullify a scam, and scammers will simply devise a new scam. Remember usury laws?

The bottom line is that if you insist on spending money you don't have you are at the mercy of the people who do have it. Thus it was, and thus it always shall be.

Phil

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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12221 of 19222
Subject: Re: Credit Card Limits Bogus? Date: 12/31/2007 3:53 PM
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The bottom line is that if you insist on spending money you don't have you are at the mercy of the people who do have it. Thus it was, and thus it always shall be.

Phil


-----------------------------


While I agree with what you are saying, it is STILL not the point of the article. Do you think credit card companies should be allowed to act in the ways described by the article?

What do you think is the purpose, from the customer's point of view, of the credit limit - if it is not to be used as a credit limit?

These are really strange reactions on this board. A little surprising that the customer should be the one attacked in the posts rather than the credit card company who is actually using them.

I sometimes despair.

AM

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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12222 of 19222
Subject: Re: Credit Card Limits Bogus? Date: 12/31/2007 4:20 PM
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While I agree with what you are saying, it is STILL not the point of the article. Do you think credit card companies should be allowed to act in the ways described by the article?

No.

I just picked up my crystal ball from the shop, so here's how this will play out. Don't forget that we're but hours away from an election year.

There will be Congressional hearings. Politicians of all stripes will express their shock at learning that banks are greedy. Editorials will be written. Jessie Jackson will find a TV camera.

Just in time for full-scale campaigning reforms will be passed. There will be an all-smiles signing ceremony in the White House.

About a year from then the new scams will appear in your revised Credit Agreement.

And that was my point.

Phil

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12223 of 19222
Subject: Re: Credit Card Limits Bogus? Date: 12/31/2007 5:10 PM
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What do you think is the purpose, from the customer's point of view, of the credit limit - if it is not to be used as a credit limit?
Of course it is still a limit. One can charge to it, and not over it. That is the definition of a limit after all. The interest rate is a separate variable from credit limit.

There is nothing in the terms that says that need to honor any particular interest rate in perpetuity. There is nothing that says they can't have a gradated interest-rate keyed to amount of credit used. I don't think this is "attacking the consumer" at all. They should explain this up front however - that would certainly be a good thing.

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Author: telegraph Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12226 of 19222
Subject: Re: Credit Card Limits Bogus? Date: 12/31/2007 7:29 PM
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Back in the late 60s, when I got out of college, I applied for several different gas compaies credit card. They all had separate cards - Esso, Texaco, Shell, Sinclair, etc....Two turned me down (no credit history) but two gave me cards....

Then I got a Sears card...and one from Montgomery Wards..... if you went in a store, they would try to talk you into a credit card or 'charge account'.....many times they'd give you $10 off for using credit to start with...so I wound up with about 10 store cards. There was no universal card......

Then along came a national card...... I kept the Sears card, closed down the Penny's and Wards....and one by one the gas cards disappeared.....

Places like Home Depot still give you a 10% discount if you open an account with them. They get to collect 100% of the charges on the card. If you use a different card, they have to pay someone for handling it..... But having too many lines of credit can mess up your FICO score, too.

What FICO usually does is take total balance against available credit. If you have 10 cards each with 10,000 buck limit, you have $100,000 of available credit. If you have an outstanding monthly balance of $30K, they take that ratio.....30%. If it gets too high, your FICO score goes down.

But you are better off keeping the other cards you don't use. If you shut down 5 of them, and just used the other 5, now you have $30K charged on $50K credit limit, or you are at 60% of limit - double what you were before. That sends up red flags.

When you retire, you likely will be paying off bills each month and interest rates will be irrelevant....plus they'll usually stay low...

t.

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