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It seems these days that in addition to worrying about grades, students need to worry about their credit as well. How they’re going to get it, how they’ll manage it, and what impact it will have on their ability to get a job, a car loan or an apartment.
A while back, I wrote a post detailing my finally becoming a member of a CU. I joined because I needed a Health Savings Account and this nice local credit union offered one. My bank did not.
Very sad news this week for Big Banks. Citigroup, BofA, JPMorgan Chase, Wells Fargo, US Bancorp, HSBC & Barclays are projected to lose between $2.5 and $3.1 billion in lost credit card fees. Just in 2010. Additionally, they are expected to lose approximately $2.5 billion due to the new overdraft rules. (Gee, how will they manage to pay those executive bonuses in December?)
Have you received a credit card statement since the new laws went into effect? I did and it was truly an eye-opener. While I did appreciate the fine print being not so, well, fine any more, the information they are now sharing is really, really scary.
I have a credit card or two and I throw out 99% of the mail I receive from the card issuers. Unless it looks important (and that’s a completely subjective call), I assume it’s junk and it never even gets past the threshold.
That’s the mantra that Adam and Courtney Baker have adopted. Who are they? And are they crazy?
They are the authors of the blog manvsdebt.com which chronicles their journey of living debt free. The couple, along with their young daughter, decided to change their lives completely. They cut up their credit cards, paid off $11,000 worth of  credit card debt, sold most of their belongings and started traveling. Sounds like fun, huh? Or not.
Yesterday in the mail I received six blank checks from my credit card issuer. Each 
offered a little something different: no interest at all until summer 2010, 2.99% interest until December 2010, etc. I could write the checks for up to my credit limit on my card. Buy anything I want.
In just 42 years since the first credit card was issued, more than 46% of Americans carry a credit card balance, with the median balance being $3000. As of January of this year, that added up to more than $960 billion in outstanding consumer credit!
If you’re a parent (and I am), you know that basically everything that goes wrong is your fault. Lost shoes, no soda to drink, no clean clothes, forgotten appointments, no internet connection, global warming, you name it, it’s inevitably our fault. So I’m used to getting the blame.
We all know that big changes are coming for credit card issuers — Lisa’s article covered some of the things banks are doing to make up for that lost income.
Over here in CU land, changes are far less drastic. In many cases, CU card programs won’t need any real changes to comply with the new regulations, other than some tweaks to disclosures. A lot of details are still up in the air, but it seems clear that most of the prohibited practices just weren’t part of what CUs were doing anyway. Credit unions simply haven’t been guilty of the blatant gouging seen in the bank world.
Just as we were celebrating the government’s steps to curb exorbitant credit card fees and interest rates, banks have quickly moved to add those same kind of charges to their checking account products.
Your CU’s Platinum card probably has a perfectly sane rate around 10% or below, you still have a 25 day grace period on purchases, and oh, yes — you haven’t been juggling the rules every few weeks or months to squeeze the last few pennies from your members.
Ok, I admit it. Apparently I’m not very smart when it comes to things financial. And my ignorance has become much more obvious in recent months.
The only sort of satisfying thing about this is, I think there are a lot of people just like me who really don’t understand exactly how we got in this “re/depression” or how giving billions of dollars to a bunch of big companies is going to help us. Many of my friends decided that the economy could be helped much more if we, the lowly taxpayers, were given all that money to go out and buy stuff with. Talk about an economic stimulus package! Women shopping! Men out buying trucks! Kids buying video games and lots of music online!
J.P. Morgan, Meanie Banker
What famous person would you guess said the above? The president? A credit union CEO?? Or a smug top-ranking banker?
If you guessed the latter, you’re right. It was J. P. Morgan. And that same sentiment seems to be shared by most of the top bank CEOs as evidenced by their performance in front of the Senate committee last week. Eight of them were there to tell us how we, the taxpayers, have benefited from all the billions of dollars they’ve received from, well, us, the taxpayers.