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Credit card debt collection

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Re: Credit card debt collection

#321

Post by fragmede »

TheDong wrote: post #142
cscurmudgeon wrote: post #117

Earlier quoted context omitted.

You conveniently left out the part where credit cards offer ... credit. Essentially quick loans upto a limit with zero collateral. If the govt. banned credit cards, you will then ask why poor people can't get credit. They will then go to payday loans and loan sharks. Remember, nobody forces you to use credit cards. Also, the US is also not the top country for either credit card usage or possession. Some European coun…

> credit cards offer credit. Essentially quick loans upto a limit with zero collateral You say this like it is an unequivocal good, but I don't think it necessarily is. The world functioned before it was common to have instance frictionless access to a no-collateral high-rate loan. Also, may I remind you these are for-profit loans, and the very article we're commenting under is about how they are disproportionately u…

> You say this like it is an unequivocal good, but I don't think it necessarily is. The world functioned before it was common to have instance frictionless access to a no-collateral high-rate loan.

The world also functioned before we had fractional reserve banking, but somewhere along the way we realized it's better to have it than not. It doesn't have to be an unequivocal good for it to be preferable, on balance, to living without.

It's hard to do an apples to apples comparison, but there are countries where there aren't credit cards like in the US, and they are poorer for it. Giving that a proper examination would require a far larger comment box than is here.

You can choose to opt out of the system. It requires a lot of work (and poverty) but the underground economy doesn't run credit checks.

Re: Credit card debt collection

#322

Post by bluGill »

refurb wrote: post #297
SOLAR_FIELDS wrote: post #275

Earlier quoted context omitted.

It’s a bit more insidious than that in that in a lot of stores and restaurants in America owners just bake that fee into the price instead of explicitly passing it onto the consumer and giving them the choice on whether they want to pay it. So if you use a debit card in the states you are usually actually subsidizing everyone else’s 3% fees (there are in fact places that explicitly charge the 3% fee to credit card us…

a lot of stores and restaurants in America owners just bake that fee into the price instead of explicitly passing it onto the consumer Not really. Most businesses don't set prices based on "cost plus" methodology. Maximizing profit based on price and volume is how most do it. Some merchants may choose to absorb the 3%, to compete on price and maximize profit through higher volume than a competitor who charges the sam…

For a long time the merchant agreement for accepting credit cards required that you not charge a different price so merchants where forced to bake the price in.

Though the costs of cash and checks is probably more than the 3% fee on a credit card. Cash needs to be counted twice at the register, then change made which again is counted twice (at least, sometimes a 3rd time if the numbers are not the same!), then at the end of the day the manager needs to count it all twice again, and even then mistakes are made. On top of that is often stolen: by robbery, dishonest clerks, management fraud, and owner fraud (owners are defrauding the IRS, while management implies someone not the owner who is trusted to count the cash). Checks need to be counted as well, and they can bounce thus being worth very little (they are sold to collections - see article for hints to how that works). Credit cards by contrast are run electronically and so know instantly you are paid you don't have the overhead of adding up the numbers. (debit cards with the lower fees are still subsidizing the others)

Re: Credit card debt collection

#323

Post by philwelch »

dylan604 wrote: post #164
philwelch wrote: post #144

Earlier quoted context omitted.

> This strikes me as the same as saying “but the homeless person might take my $5 to buy whiskey instead of a hot meal.” Which is still a valid point. Don’t give cash to homeless people.

Don't give cash to addicts

Or people who are likely to be addicts, i.e. homeless people.

Re: Credit card debt collection

#325

Post by elteto »

wizerdrobe wrote: post #257
cavegirl wrote: post #191

Earlier quoted context omitted.

Might as well not pay it, if it follows you anyway

If you want to buy a home you have to pay it, even if you’re past the seven years window. Or at least that’s what USAA did to us. I had a credit card debt of about $700 after a failed startup that, when I called TD, I was unable to pay. It was “written off.” The debt was from 2015 and I was purchasing a home in the spring of 2023 and despite the balance having been written off 8 years ago, USAA demanded it be settled…

This seems like pedantry on the USAA part. They should add some small fraction of a point to your rate and move on.

I understand you probably get extra benefits with USAA but this would be an automatic disqualification for me and I’d move kn to a different servicer. However, that is _painful_ in the middle of a closing.

Re: Credit card debt collection

#326

Post by gemstones »

dfxm12 wrote: post #314
beaviskhan wrote: post #306

Earlier quoted context omitted.

There is zero chance that I, a US resident, will ever use debit cards for anything. The reason is that in the event of a fraudulent charge (which still happens surprisingly often, given that chips were supposed to put an end to that): - With a debit card, I am out $X of my own money, until the bank can be bothered to agree that the charge is fraudulent and refund my money, which can take weeks or months, if at all. G…

There is zero chance that I, a US resident, will ever use debit cards for anything. Does being a US resident have any meaning here? I mean, does the rest of the world not secure credit card payments, or does the rest of the world secure debit card payments like the US secures credit card payment?

There are things which come with being the richest country and a really populous one - you're targeted by all kinds of scammers who view you as the best target. Similar to how startups try to serve the U.S. market since it's 300 million relatively wealthy people. You could start your startup in Germany, but is the market there for what you're doing? Scammers use the same logic.

Re: Credit card debt collection

#327

Post by sidewndr46 »

DoubleGlazing wrote: post #315

There was a case a few year back around the time of the 2008 recession where a man in debt used the Fair Debt Collection Practices Act to earn a decent living from their aggressive/dishonest practices. I did try Googling for the story, but I could find it. His process was to let them lie to him - he even encouraged it, all while he was recording the call. After the call ended he'd launch a legal claim for compensatio…

I would love to hear this case if you have time to track it down

Re: Credit card debt collection

#328

Post by [deleted] »

leesalminen wrote: post #253
prophet_ wrote: post #236

Earlier quoted context omitted.

The difference I see is that in Europe, at least where I live, at the end of the month the bank will charge your bank account with the full amount of whatever is the balance of your credit card. If you have no money you will go into overdraft and that’s about it, you basically have a problem and the bank will keep nagging about that overdraft if you don’t have an agreement. The goal is to use the “credit” of the cred…

Gotta love when you’re eating at a restaurant in Chile and when it’s time to pay they ask if you want it billed on your card in 6 monthly installments. Even as an American, it always makes me laugh a bit at the absurdity of doing that for your meals.

[deleted]

Re: Credit card debt collection

#329

Post by nbadg »

pjmlp wrote: post #296
nbadg wrote: post #268

Earlier quoted context omitted.

In my experience (~31yrs US, ~2yrs Germany): USA: debit cards and credit cards are both offered through banks. They operate on the same payment infrastructure (Visa, Mastercard, etc). They are all equally accepted. The only difference between them from a consumer standpoint is that a debit card immediately withdraws the money from your account and typically requires a PIN for purchases, whereas a credit card operates…

Living since 2004 in Germany, Kreditkarte is definitly a known term and people known the difference. I guess the biggest difference from US is that you need to earn the Kreditkarte, not everyone gets to own one if the bank account isn't that inspiring, and even after getting one, the limits depend on how healthy the bank account tends to be on average.

To be clear, people know the difference between Kreditkarte and Girokarte. Also, some nuance here: using the terms "Karte" and "Kreditkarte" interchangeably isn't the same thing as "people don't know the difference". I'm not making a statement about whether or not people understand the difference between direct debit and revolving credit as concepts. I'm making a statement on the language that is used to describe them, which is IMO a pretty strong indicator of how fundamentally different the attitudes towards card payment are in the two countries.

These things can and do vary regionally, but at least here (working class Berlin area), "Kreditkarte" or simply "Karte" is colloquially used for all plastic cards that are not Girokarten, when discussing in German (I'm a near-native speaker), regardless of whether or not it's revolving credit or direct debit. This could certainly be regional, but at least here, this includes in government buildings: "Keine Kreditzahlung möglich" (no payment with credit card possible) is used semi-interchangeably with "Keine Kartenzahlung möglich" (no payment with card possible -- note no explicit "credit"), and it means that they don't have any payment terminals that work with visa/mastercard payment processing, regardless of whether it's based on revolving credit or direct debit. Note that "Keine Kartenzahlung möglich" may also mean that Girokarten cannot be used, or it may say something like "Kartenzahlung nur eingeschränkt möglich" (card payment only limitedly possible). This can vary even from merchant to merchant and based on context: a grocery store that usually accepts Kreditkarten and Girokarten might say "Kartenzahlung nur eingeschränkt möglich" to note that their Visa/Mastercard PoS system is currently offline, but that they're still accepting Girokarten. But a bar that says "Keine Kreditzahlung möglich" is usually cash-only.

Again, I'm talking about the everyday colloquial language used by working-class people in German language (a chunk of the people I'm talking about have very limited English anyways). This is different in circles that have higher amounts of financial literacy, or more exposure to American culture. I'm not talking about the kinds of people who follow Finanzfluss (then it's a different story) or have studied/traveled to the US, and I'm also not claiming that people don't actually know the difference. I'm trying to highlight how different the two systems are based on what words are and are not in regular usage and how their meanings are different in the two countries.

Re: Credit card debt collection

#330

Post by elteto »

specialist wrote: post #252
nologic01 wrote: post #159

It is in this domain, of broken promises and broken people that you can establish what a society is really made of. Graeber's Debt is obligatory reading (alas not easy to read) if you want to dig into the painful history of debt relations between humans. The post provides excellent insights into the odious side of consumer finance. It feels like a follow up with ideas about reform would not be wasted effort: Once thi…

Debt: The First 5000 Years rewired my brain. Debt crisis followed by debt relief is historically normal. Prompting Graeber to wonder if capitalism is inherently unstable. Maybe capitalism somehow requires debt relief (eg jubilees, bankruptcy). Then we should codify it. Instead of continuing to treat them as unanticipated, unfortunate one-offs. Our recurring bubbles and bailouts seem to be keeping with Graeber's thesi…

Of course it requires debt relief, things go _wrong_ all the time, that’s just life and how the world works.

Debt relief is also necessary for a peaceful society. If you can’t legally discharge debt in some manner we’d have companies hiring enforcers like a shark loan would.

It’s not a problem of capitalism, it’s a problem of reality.

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