Saying No to Credit Cards in a Tangible Way

Credit cards. We’re awash in them as a society, and our exposure to them often starts in college (if not sooner). The day you get your first credit card, you join a system of credit and debt that can financially eat you alive if you’re not careful. I have nothing against the idea of credit cards – I use one constantly myself, paying it off every payday. And recently we used our card points to book a trip (more on that later). What I object to though is how credit card companies market their products: they send out those “you’re approved” letters, tempting people with credit problems.

Credit cards are a tool in your financial toolbox, but they’re a little like juggling a chainsaw. One or two are manageable, but if you try more than that, odds are you’re going to lose a hand (financially speaking).

Credit card companies are data-driven. They know that for every 1000 applications they send out, they’ll get a certain percentage of completions. Of the ones that get approved, most of them will turn into incredible profit generators for the company; most people don’t pay them off every cycle, and only accumulate more debt over time. But what if it became significantly more expensive for credit card companies to gain new customers this way?

My solution is simple and shown in the image above: rip up the credit card application and send it back to them. They have to pay for postage, so this costs you nothing.

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Credit cards are financial tools that should be available for financially mature adults who can use them responsibly. They should not be dangled in front of every like debt-candy.

If we all make it more expensive for credit cards companies to run unsolicited marketing campaigns like this, they might do it less often. Yes, I know it would take huge numbers of these going back to them to change their behaviour, but you have to start someplace. 🙂

 

PayPal: The New Credit Pimp on the Block?

I don’t use PayPal as much as I used to – maybe a couple times a month – but I noticed something earlier this year that struck me as odd. Every time I logged into my PayPal account, rather than taking me to my home screen showing my balance and transactions, PayPal would show me a page promoting their credit card, or promoting their “pay later” service.

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Recently, in this holiday season of buy-buy-buy, I used PayPal a couple of times and in every instance the default was “Pay After Delivery” and it was set to withdraw money from my bank account.  You have to dig a layer down to find what should be the logical default: PayPal Balance.

PayPal has been spun off from eBay, and there’s clearly maneuvering afoot to re-invent PayPal as more than just a digital payment tool. They want to finance your purchased, and touch your bank account more often – they don’t want to be an isolated island like many of us (myself included) use them.

We have enough credit cards companies in the world destroying the financial lives of average people – we don’t need more of them. PayPal shouldn’t be going down this road…

Elizabeth Warren: “You Didn’t Build That”

I’m a believer in capitalism and working hard to make profit and succeed – but I find myself feeling almost like a left-wing socialist when put in the context of the American political system. The raw, unchecked power American corporations have over the political process – and thus over the laws the regulate their behaviour – is truly terrifying. Things are just broken, and they’ve largely remained broken since the financial meltdown of 2008. Not much has changed.

Elizabeth Warren is playing a vital role in power-checking the big banks and corporations that have, for the most part, completely abdicated their socially-responsible role in our society. Here’s a great article about Warren, and a great quote that sums up part of the problem:

“You built a factory out there? Good for you. But I want to be clear: You moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.” – Elizabeth Warren