Author Topic: How the poor get screwed  (Read 138 times)

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Offline SirJohn

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How the poor get screwed
« on: November 16, 2017, 11:19:34 am »
So I was at my bank yesterday and the teller is pushing a new credit card on me which, of course, is infinitely better than my existing credit card and will cost me not one cent extra while giving me all sorts of goodies. Just because they like me.

The interest rate (not mentioned) is a mere 20.99% for purchases, and 22.9% for cash advances. Quite the bargain. The Canadian Tire girls who wander the aisles trying to get people to sign up for their credit cards probably don't mention their rate is 25.99% for purchases and 27.99% (can we just say 28%?) for cash advances.

Everyone has a credit card, sometimes several. If you have disposable cash they're simply a convenience because if you pay them off in full each month you don't pay any interest. If you live paycheque to paycheque they're a means to buy things you don't have the cash for. They allow you to get a new fridge when the old one dies suddenly, or get your car repaired even though you're broke, or buy your daughter new shoes.

They're also a wholesale transfer of cash from the poor and middle class to the upper middle classes and the wealthy. Because the latter groups are the ones who own the stock in the banks (I own TD and Scotia myself). We don't pay these interest rates, we simply benefit from the profits raked in by the banks from the poor schmucks who use them as regular piggy banks, if not for emergencies. And that's not even mentioning those who use them irresponsibly to buy things they don't really need. It's easy to get sucked in with these cards. I was myself back in college.

And for all the Liberals' virtue trumpeting about helping the poor and middle class there hasn't been a single move on reigning in these ridiculous high rates. And don't even get me started on those payday loan ripoffs.

"When liberals insist that only fascists will defend borders then voters will hire fascists to do the job liberals won't do." David Frum

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Offline TimG

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Re: How the poor get screwed
« Reply #1 on: November 16, 2017, 11:29:49 am »
No one has to get a credit card or if you routinely can't pay them off you should not have one.

More importantly, the market for credit cards is reasonably competitive. If people can't get a lower interest card that is likely because they are in a demographic that is higher risk and costs the bank more to provide. This means any attempt to regulate rates would result in either 1) fewer people getting access to credit 2) increase non-interest fees.

IOW - governments don't have a magic wand that will make these costs go away. All they can do is force banks to distribute those costs among more people.


Offline waldo

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Re: How the poor get screwed
« Reply #2 on: November 16, 2017, 12:20:32 pm »
per CreditCards Canada: "Our mission is to empower people with the information they need to choose and use credit responsibly, without the burdens of excessive debt. We make it easy to compare and apply for the best credit cards while providing current information to help guide you along the way." --- Why Are Credit Card Interest Rates So High?  https://www.creditcardscanada.ca/education-centre/credit-card-basics/credit-card-interest-rates-high/

per Canadian Bankers Association:

Offline SirJohn

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Re: How the poor get screwed
« Reply #3 on: November 16, 2017, 03:37:33 pm »
per CreditCards Canada: "Our mission is to empower people with the information they need to choose and use credit responsibly, without the burdens of excessive debt. We make it easy to compare and apply for the best credit cards while providing current information to help guide you along the way." --- Why Are Credit Card Interest Rates So High?  https://www.creditcardscanada.ca/education-centre/credit-card-basics/credit-card-interest-rates-high/

per Canadian Bankers Association:
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Now I've seen it all. Waldo eagerly trotting out the Banks' justification for why credit card rates are so good for people.
"When liberals insist that only fascists will defend borders then voters will hire fascists to do the job liberals won't do." David Frum

Offline SirJohn

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Re: How the poor get screwed
« Reply #4 on: November 16, 2017, 03:43:55 pm »
No one has to get a credit card or if you routinely can't pay them off you should not have one.

No one has to smoke crack, but we make crack illegal anyway. Why is that? Is it because we've determined that it's not good for our society to have people smoking crack?

And as for not needing a credit card. You can't shop online without a credit card. You can't check into a hotel or motel without a credit card. There are a lot of ways in which you will find life much more difficult if you don't have a credit card.

Quote
More importantly, the market for credit cards is reasonably competitive.

Uh, yeah, the banks are so competitive with each other. Seriously? This is an oligopoly. They have no need to compete on rates.

Quote
If people can't get a lower interest card that is likely because they are in a demographic that is higher risk and costs the bank more to provide.

In point of fact, the banks prefer poor people who will run a balance. They eagerly recruit them, in fact.

https://www.theatlantic.com/business/archive/2016/01/credit-cards-subprime-cfpb/424458/

https://financiallyfit.com/path-poverty-credit-cards-debt/
"When liberals insist that only fascists will defend borders then voters will hire fascists to do the job liberals won't do." David Frum

Offline waldo

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Re: How the poor get screwed
« Reply #5 on: November 16, 2017, 03:45:40 pm »
Now I've seen it all. Waldo eagerly trotting out the Banks' justification for why credit card rates are so good for people.

I guess as eager as... you accepting interest free credit on your credit-card purchases, hey!

your fake-outrage can only be tempered when you cut-up your credit cards and revert to debit cards - yes? Let us know when that happens, right?

Offline SirJohn

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Re: How the poor get screwed
« Reply #6 on: November 16, 2017, 08:41:02 pm »
I guess as eager as... you accepting interest free credit on your credit-card purchases, hey!

your fake-outrage can only be tempered when you cut-up your credit cards and revert to debit cards - yes? Let us know when that happens, right?

I didn't express outrage. I pointed out one of the ways in which money is transfered from the poor to the rich. You didn't deny it. Instead you seem to treasure it and appear angry anyone is mentioning it. If you don't watch out someone's going to take away your prog credentials, boy.
"When liberals insist that only fascists will defend borders then voters will hire fascists to do the job liberals won't do." David Frum

Offline MH

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Re: How the poor get screwed
« Reply #7 on: November 16, 2017, 09:13:01 pm »
I think the CPP also owns bank stocks.  I pay it off every month.  My co-worker confided in me she had $100K in credit card debt.

Jesus.

Offline Gorgeous Graham

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Re: How the poor get screwed
« Reply #8 on: November 16, 2017, 11:33:40 pm »
If you don't pay off your credit card monthly on a consistent basis you're an idiot and you deserve to be poor.  If you don't read the fine print when you sign a contract, you're an idiot and deserve to be poor.

I know people who are normally intelligent but knowingly rack up debt on credit cards because they want stuff they can't afford.  They're stupid & I don't feel bad for them.
I can tell how good of a person you are by how you treat the people you disagree with.

Offline waldo

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Re: How the poor get screwed
« Reply #9 on: November 16, 2017, 11:56:15 pm »
I pointed out one of the ways in which money is transfered from the poor to the rich. You didn't deny it. Instead you seem to treasure it and appear angry anyone is mentioning it. If you don't watch out someone's going to take away your prog credentials, boy.

you shouldn't be afraid of and resistant to information and/or facts... both of which I provided without adding any personal comment to my post. It is quite telling to see your reaction and the attachments you feverishly assigned to me. As expressed, there are lower interest cards available... significantly lower... by as much as less than half the prevailing highest rates. There was also an informative series of statements that provide a CBA perspective on a rationale for higher interest rate cards. It is your prerogative not to accept them/that rationale... but you simply ignored the information/facts as it didn't fit your fake outrage and trumped up narrative.

Offline MH

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Re: How the poor get screwed
« Reply #10 on: November 17, 2017, 05:49:57 am »
hey want stuff they can't afford.  They're stupid & I don't feel bad for them.

Are you a libertarian ?

Because the principle of not protecting poor people (at all) leans that way.  Liberals want to protect people to an absurd degree, from the fright du jour.  Conservatives want to protect people from brown folks and socialism.  NDP is afraid of everything.

But Libertarians love the guy who is trying to steal my parents' retirement funds.

Offline SirJohn

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Re: How the poor get screwed
« Reply #11 on: November 17, 2017, 10:03:02 am »
If you don't pay off your credit card monthly on a consistent basis you're an idiot and you deserve to be poor.  If you don't read the fine print when you sign a contract, you're an idiot and deserve to be poor.

I know people who are normally intelligent but knowingly rack up debt on credit cards because they want stuff they can't afford.  They're stupid & I don't feel bad for them.

There is an aspect of this I sympathize with, which is personal responsibility. I agree with all you've written above, and yet I also disagree. I think we have to recognize that not everyone was created with equal cognitive abilities, nor intellectual advantages, and that even those who are can be changed due to circumstances as they are raised. Then, too, our education system provides virtually no information to young people about finances and the long-term implications of taking on debt. Hell, even our prime minister doesn't understand it. Or at least, doesn't care. So it's easy to understand how people can fall into the trap of 'the minimum monthly payment', and see it gradually get bigger and bigger and take more and more of their salary every month. By the time you realize you're in trouble it can be hard to get out. I'm generally not in favour of the state trying to involve itself in the market, but I do think that some action needs to be taken here simply because it would be in society's interests to do so. And, frankly, because it offends my sense of fairness and justice to see large and wealthy institutions taking advantage of the poor and ignorant.
« Last Edit: November 17, 2017, 10:09:30 am by SirJohn »
"When liberals insist that only fascists will defend borders then voters will hire fascists to do the job liberals won't do." David Frum

Offline SirJohn

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Re: How the poor get screwed
« Reply #12 on: November 17, 2017, 10:07:24 am »
you shouldn't be afraid of and resistant to information and/or facts... both of which I provided without adding any personal comment to my post. It is quite telling to see your reaction and the attachments you feverishly assigned to me.

Your determination to personalize every discussion and mock and sneer at anyone who disagrees with you is one of the reasons I so rarely bothered to have much to do with you on the other site. I merely found it odd that here I am taking what one might normally be suggested is more liberal/progressive side on this issue, which is where you come from. Yet it seems that you must take the opposite side because.. I assume, you see me as a conservative, and therefore must violently oppose anything I support. It's an interesting study in the ideological zealotry of the desperate internet flame warrior.
"When liberals insist that only fascists will defend borders then voters will hire fascists to do the job liberals won't do." David Frum

Offline waldo

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Re: How the poor get screwed
« Reply #13 on: November 17, 2017, 10:54:23 am »
Your determination to personalize every discussion and mock and sneer at anyone who disagrees with you is one of the reasons I so rarely bothered to have much to do with you on the other site. I merely found it odd that here I am taking what one might normally be suggested is more liberal/progressive side on this issue, which is where you come from. Yet it seems that you must take the opposite side because.. I assume, you see me as a conservative, and therefore must violently oppose anything I support. It's an interesting study in the ideological zealotry of the desperate internet flame warrior.

buddy Argus, the personalization was yours! Again, as I stated once already, I provided the information/facts sans any personal comment... your strong aversion to information/facts has you predisposed to make shyte up. I didn't take any side and haven't yet. I am simply the information conduit to help provide information/facts to YOUR one-sided and incomplete thread... and for that helpful service you presume to whine, play silly-buggar and cast aspersion toward the waldo! Please sir, grow a pair, hey!

Offline SirJohn

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Re: How the poor get screwed
« Reply #14 on: November 17, 2017, 11:43:22 am »
buddy Argus, the personalization was yours! Again, as I stated once already, I provided the information/facts sans any personal comment... your strong aversion to information/facts has you predisposed to make shyte up. I didn't take any side and haven't yet. I am simply the information conduit to help provide information/facts to YOUR one-sided and incomplete thread.

No one of any intelligence would suggest that a bank PR sheet would be any sort of adequate response to the question about high interest rates. And pretending you haven't 'taken a side' is dishonest given you wouldn't have posted the thing did you not agree with them. So stop relying on the bank. Come out and tell us how the banks are good for us and high rates are a wonderful thing. Let's hear your justification rather than sneers and snottiness. Show us the true intellectual giant that is Waldo.
"When liberals insist that only fascists will defend borders then voters will hire fascists to do the job liberals won't do." David Frum