What happens after a bank closes all of your credit cards?
chadscira.com
chadscira.com
I tried getting her a card, but none of the local banks would do it, and even the prepaid cards that you buy at supermarkets will not allow you to activate in your name unless you are a certain age. I finally found a card with FamZoo that worked for her, but it was way more difficult than it should have been finding a way for her to legally buy ice cream from that store.
I am paying closer attention when I go to a brick and mortar store these days, and I am seeing more and more signs advising customers that their cash is no good there.
This is a scourge that is starting to get out of control. My HOA advised me that I would only be able to pay them using a money transfer app. When I tried using it, it rejected my bank account information for some reason. I sent them a check with a letter explaining that their required method of payment didn't work for me. They didn't deposit the check, and then they tried charging me late fees. I had to go out of my way to escalate to resolve that.
This is getting to the point that we will need some regulation to protect the right to pay for ordinary things like ice cream and HOA dues with cash and checks.
The store would need to require that you pay before the scooping began to avoid this, IMO.
Yes. And?
If enough people do this, perhaps they'll change their policy.
If you order the ice cream but don't take possession of it until you pay, the store is free to reject your cash payment and not give you the ice cream. End result: no ice cream. If this occurs frequently enough, the waste from the store having to prepare and throw out ice cream might prompt them to change their policy, but that's not an immediate solution.
https://wsvn.com/news/us-world/coinstar-helps-out-georgia-ma...
It should be illegal for any business to refuse cash payment, full stop.
I've heard some cities have already passed laws in this vein, it should be made universal. Homeless people or otherwise marginalized groups are often limited to cash only transactions, that shouldn't mean they can't participate in commerce. Hell even just victims of identity theft can find themselves unable to get a bank account or credit card, cash should always be an option.
No. We should just have legislation ensuring that anyone can go to any post office or bank and exchange cash for a prepaid card. The same way you've been able to exchange cash for a money order at the post office for... well, as long as I've been alive, that's for sure.
Managing physical cash and registers is a huge headache that costs businesses a lot of money (not to mention risk of violent crime), and just doesn't make any sense when less than 5% of your customers want to use it. Not to mention cash is unhygienic, takes energy and carbon to make, transport, and process, and constantly needs to be replenished.
Let's not impede the future. Instead, let's help it along but make sure it works for everyone.
cash is concrete. People can count how much they have. They know how much they spend. They can give it to someone in the middle of nowhere away from computers. If we had cards, all kinds of tracking and tracing would be added. Civil forfeiture could happen while the cash card was in your pocket.
There is just so much society would lose for the business convenience you're asking for.
places that do a lot of cash business will naturally continue to accept cash as long as it exists. several business I patronize only accept cash. it's not some colossal injustice if the fancy coffee shop is plastic-only.
"“Cash is contraband, but people have got cash,” the former prisoner explained, “but it is not cash like cash in hand. It is untraceable. It is all based on numbers. People pay each other with dots.”"
Economies and mediums of exchange will find a way where they are needed.
https://www.theguardian.com/us-news/2019/aug/30/prison-econo...
But to be clear, I never once suggested abolishing cash. And I'm not suggesting that now. I'm saying that cash continues to exist, we allow businesses that want to go card-only to do so, but make sure that everyone can easily get a card.
Have you noticed that the amount of middlemen is steadily increasing in every area of life?
Once cash is abolished, our oligarchy can finally implement negative interest rates for everyone.
All I said is to have a right to be able to exchange cash for prepaid cards, for places that only accept cards. And to be clear, that should be a right that doesn't require any third-party "blessing".
Obviously, if you can exchange cash for a card, then cash still exists as legal tender.
Obviously, if businesses refuse to accept cash to save themselves some hassle, they'll also refuse to pay salaries in cash, to save themselves further hassle.
The incentives are there, and it's clear to me that if you simulate it forward a couple cycles, cash will be all but gone - with the remaining few businesses and people using physical money automatically considered suspicious.
What businesses pay salaries in cash?
My entire life, I've gotten nearly all my cash from the bank, except for tips when I worked in the service industry.
Again, this isn't about abolishing cash. It's just about enabling businesses to go card-only if they so choose.
If one did not already know online payments originated and was perfected from adult content consumption just as many technologies were but history shuns the stigma - the stories I have. Worth the watch > en.wikipedia.org/wiki/Middle_Men_(film)
Maybe we just go back to trading farm animals? j/k
This thing you're proposing is an end to transaction privacy.
It should be illegal to not accept into your possession a physical object that people will use violence to get from you? Do you know the fear a shift manager has when having to manage an onsite safe? You've seen the armored trucks rolling around transporting the stuff right?
Businesses don't want to accept cash because its a liability and the burden of a card's surcharge just isn't enough of a pain anymore.
I can easily imagine there are some businesses in some areas where the clientele almost always uses electronic forms of payment, where it doesn’t make business sense to deal with the minority using cash.
In this way they can avoid people paying in cash by never taking orders that might use cash.
You can also just get a second credit card and give it to your kid and have your kid make purchases in your name since the ice cream shop isn’t likely to care.
You could also load a card onto her phone and have her pay with that.
Every 11 year old in my neighborhood in the US solved this problem, so I wish you the best of luck with your struggle.
My bank doesn't issue cards to anyone under the age of 18, but in terms of customer service my bank is 1000% better than any of the ilk of Wells Fargo/BofA/etc., so I'm not going to change my bank just because the ice cream shop requires a bank card.
Rather, she can use a FamZoo or Greenlight card if we feel like paying a monthly fee for the privilege of being able to buy ice cream from that one shop. But I'm starting to think it's not worth it, since there's a Trader Joe's around the corner that sells a better product and accepts cash.
Sorry your bank is so feature poor but glad you like it. USAA is an awesome bank so would love to learn more about a bank that’s 10x better. Also, my local credit unions offer this common feature.
But it seems like you’re blaming your the ice cream store for your own and your bank’s shortcomings.
Even in Europe there is progress over the USA. Chip and Pin is all some people have known, the idea that you should have a signature or a cheque is just unimaginable, only old people could remember that.
Cash is not without its costs. Bitcoin isn't the answer. The credit cards take a slice of everything, what we really need is a government that can make a payment system work for everyone, the customer and the retailer, with nobody taking their slice or selling your data. It just needs will.
I was almost about to empathize but this is hilariously poor problem solving skills
Sorry your experience leads you to this path
The common denominator is your crappy bank
For the record, I know how to get her plastic. There's literally one store right now where this is an issue for her, and I'm not going to jump through any hoops at all (like continuing to pay the monthly fee for a FamZoo card or switch banks) just to accommodate that store.
And said "crappy bank" is a well-known investment bank. Supporting minor accounts isn't profitable for them.
Opening a retail bank account isn’t much of a hoop to me
Europe is also pretty good about cash, at least the parts that aren't the uk and fennoscandia.
I know this comment doesn't address your absolutely legit larger concerns, but for anyone else in this situation: I'm having a good experience using Greenlight (https://www.greenlightcard.com/) as a solution for my pre-teen kids.
The numeric value known as a “credit score” is simply a number that someone calculated based on your history of re-paying debts. It can exist in the Netherlands or anywhere, I can even make up my own formula. It’s probably more popular in the US than elsewhere due to its efficiency to evaluate someone’s credit worthiness for a credit card and the US using more credit for regular purchases than elsewhere, but it really isn’t something devious or magical or legislated.
For example, a small retailer wants to offer it’s customers credit (i.e. lend them money), but they don’t have the underwriting staff or capability to analyze everyone’s credit history (from their credit reports). Then the small retailer may choose to simply purchase credit scores from a company that does analyze people’s credit history, such as the popular FICO score from the Fair Isaac Corportaion.
For any large items, such as home mortgages and business loans, I don’t think scores are even used. There’s a person evaluating the applicant to determine if they meet underwriting standards.
Either way, a score is just a heuristic to avoid wasting underwriter’s time combing through someone’s finances. Once you pass whatever score hurdle a mortgage lender has set, you still have to pass the manual review.
Car loans, though, I think are almost entire driven by scores.
Edit: the Dutch bkr, for instance, has recently been sued for charging users to access their database of payment histories. This is important because that record is provided to companies wishing to make credit decisions about an individual. It's also noteworthy that the Dutch in general don't really go in for credit cards the way Americans do, so they interact with that part of the financial system less. That in turn makes for much less interesting "credit reports".
Also, it's my impression that people in the US often overestimate the importance of the credit score, as opposed to the detailed credit report. Major lenders tend to use private scoring systems anyway. Far too many people know how credit scores work and how to game the system, making public credit scores less useful than secret scoring systems.
The US credit score while it has its problems at least as well known rules of what impacts it. I know that if I have a good high credit score I can get a mortgage with a decent interest rate whereas, in other countries, there's no score I can check to know what my chances are and no public way to evaluate how banks see me and if they are likely to approve me or not.
In this person’s case, they should’ve reported Chase’s actions to their state’s attorney general, their state’s financial services regulatory body, the CFPB, the OCC, and the Federal Reserve, in order to generate a robust and and comprehensive paper trail. Sometimes, this resolves an issue when compliance becomes aware a paper trail has been started. Failing that, it’s easier to hand over reference and case tracking numbers to legislators to reference and obtain documentation directly versus your own complaint package.
Also, just don’t use Chase. They’re a garbage too big to fail institution. Lots of better banks out there, but also don’t report security vulnerabilities yourself for your banking relationships. Provide them to an arms length third party to report them who can’t be impacted by retaliatory behavior.
(advice provided from personal experiences)
I don't see how having more of them really helps; nor how having (say) the government operate the service would help.
I used to lend on Prosper specifically to help people avoid this system - but it's important to remember that the whole thing is opt-in.
Per my understanding, these sort of rewards program dont really exist in other countries though.
Obviously, if you’re a lender and someone comes up to you and you know nothing about their history of repaying debts, you would ascribe them a higher risk than someone who does have a history of repaying debts.
There are a few other factors that could cause you to look riskier, so it also makes sense to not go out and get an auto loan and sign up for a few credit cards before applying for a home loan, since now that you just borrowed a bunch of money, you’re a higher risk, and hence will pay a higher interest rate.
at my level of income, I am not really concerned, I have enough buffer that all my transactions can shake out no problem. At lower incomes, consumers are very sensitive to transactions settling too fast or too slow. A bill is due on the same day as payroll? Probably a 50% chance to collect either an overdraft fee or a late bill fee and you have no control over it. Get enough of those and your only resort will be fee-laden prepaid cards or cash-only.
Almost 2/3rds of Americans are 'paycheck to paycheck'. Do not scoff at this. Access to simple electronic payments needs to be equitable.
I was for the first half of my adult life a renter and never once had a problem getting a lease; I bought a condo in Chicago, then later a house in Ann Arbor, and then a house in Chicagoland where I am now; again, no credit-score-related problems. I've been able to rent cars. Buying things on credit has been the only sticking point --- and I don't understand why people do that.
Not even a secured card?
That the consumer bureaus get to decide who gets access to these benefits is something we all should be concerned with.
I'm not litigating whether unequal access to financial products is a bad thing. Inequity is a bad thing. We're on the same page there.
But when discussions like this come up and people imply that a bad credit score is somehow life-changing --- that just doesn't connect with my life experience? Like I definitely didn't come up rough or anything, but I feel like to the extent that there's value in access to these particular financial products, I'm well within the cohort of people who would perceive that value. And... I just don't get it? Like: a debit card from a good bank has actually pretty solid fraud protection? And lack of access to 2% rewards doesn't seem life changing?
I have never understood credit cards.
I don't support paying interest on credit card bills either, but some cards come with a "0% on balances for ~12 months" welcome offer [1], which might help a little if cash flow is tight, but the borrower knows that some income will be guaranteed in the coming months.
[1] https://www.cnbc.com/select/best-zero-interest-credit-cards/
Yes, there are 3 companies that aggregate your credit information. However, the scores used by lenders are generated by 1 company, FICO. All TransUnion, Equifax, and Experian do is receive your credit information from lenders (lenders can choose which bureaus they report to) and make FICO scores available for lenders to purchase. As some else mentioned the lenders chose this. Lenders decided that they wanted to know what people’s lending history was with other lenders before they would be willing to lend. Obviously if a lender looks at your full credit report they get more info but plenty of lenders have decided to set internal rules were if your score doesn’t meet a certain threshold they don’t bother looking at the rest of your report. There are states that have started proposing legislation limiting what credit checks can be used for (such as not being able to use them as a requirement for renting an apartment). But honestly unless lenders either stop caring about your credit history or they are told they can’t check it there isn’t really anything to be done.
There is one alternative that might help from a credit score standpoint in Canada the CreditVision scoring algorithm is used instead of the FICO score. From what I understand CreditVision is a more sophisticated algorithm that weights trending data more so it helps people who are improving their credit have a higher score sooner. From what I understand Canada moved to it because it is supposed to be more fair than what they were using previously.
I’m pretty sure all the big financial institutions also calculate their own scores. I can see it when I login to BoA, Chase, Citi, etc.
https://www.consumerfinance.gov/ask-cfpb/what-is-a-credit-sc...
> Keep in mind there is no “one” credit score. It is important to know that you do not have just “one” credit score and there are many credit scores available to you as well as to lenders. Any credit score depends on the data used to calculate it, and may differ depending on the scoring model, the source of your credit history, the type of loan product, and even the day when it was calculated.
Edit: It looks like the government might mandate FICO scores for taxpayer funded home mortgages:
https://www.experian.com/blogs/ask-experian/which-credit-sco...
> When you apply for a mortgage, lenders will generally request all three of your credit reports (one from each credit bureau) and a FICO® Score based on each report. However, the type of FICO® Scores they request are often older versions, due to guidelines set by government-backed mortgage companies Fannie Mae or Freddie Mac.
> There are exceptions, though. Mortgage lenders could use different credit scoring models for loans that aren't secured or bought by Fannie Mae or Freddie Mac. You might even be able to get a mortgage if you don't have a credit history or score at all.
The scores you see when you log into those institutions is whatever is written into the contract with whichever bureau they pay to provide consumer credit monitoring. For Mint, Amex, CapitalOne and others it is a VantageScore 3 score provided by TransUnion. I thought I had previously seen a warning on a site that provided VantageScore 3 scores that they were just for educational purposes, but currently I’m just seeing disclosures similar to the one you quoted above. So yes you are right there are other scoring algorithms, but I believe FICO is still the one used by most lenders. Even if large financial institutions don’t generate their own scores they still have a copy of your credit report to use to make more detailed decisions. That is how you can have an incredibly high credit score and have a bank or a car dealership tell you that you don’t have enough lines of credit to qualify for the loan you want.
When I log into my Wells Fargo account, I get a FICO 9 Score from Experian data. When I log into my Citibank account, I get a FICO Bankcard 8 Score from Equifax data. When I log into my PenFed account I get a FICO 9 Score from Equifax data.
The single common denominator is FICO.
It was around 620 by the time I got around to opening new cards.
I think the crash was mainly due to the length of my average active credit history going from 10 years to 0 years, as I really did only use Chase credit cards.
If I remember correctly all hard inquiries that happen within a 30 day window get bundled together on your credit report. This allows people to shop around for credit cards when opening a new one without killing your credit score. So opening all of the new cards would have added a hard inquiry but it would have caused the number of lines of credit and average age of credit to start increasing thereby causing the credit score to start rising from the score when all of the accounts were terminated.
Can't we architect an asset-based economy, rather than debt-based? It would be more resiliant, and the trifecta of credit reporting agencies wouldn't hold any particular power over our economy.
So we can reduce risk of default and get lower interest rates. Mortgages sucked a lot before credit scores.
Credit scores have many problems, but are pretty useful for getting credit.
In such an economy, debt would be as relevant if not more so, due to the fact that as asset prices rise the only way for many to buy in is to borrow.
[0] https://en.wikipedia.org/wiki/Asset-based_economy#:~:text=Th....
One might argue that one of the most important factors contributing to the US’ economic power is the existence of a reliable credit (and court) system for lending money, enabling it to grow far quicker than others.
I'm doing this with Amex now, ever since one of their customer service reps gave me wrong information about a benefit, I relied on it (it was multiple transactions totalling $300), and Amex (after much investigation) closed the issue by citing their terms and conditions and not having my back, despite customer service saying that they'll always make good on the promise since chats are logged.
I used to be a huge fan of Amex and their customer service, but they treat customers like numbers all the same, like every other large financial organization.
I have less (consumer financial) accounts than that spread across multiple institutions, never mind credit cards.
Also chase incentivizes you to open up more than one card with their signup bonuses.
My main credit card has all sorts of incentives to open more lines that I don't pay any attention to.
Is this a real thing? I've always had 1 card and highest credit score.
Having multiple cards seems like a risk of taking on excess debt.
it's only a moderate impact factor though. having an extremely long history of on-time payments and low overall utilization can still get you an excellent credit score. it just takes longer.
I had two credit cards with Chase (and an Amex with BoA) when Chase decided that I had died.
If it wasn't for the Amex, I would have had some big problems!
I don't do anything that complicated myself, but I do have several cashback cards with different rewards categories to maximize my overall cashback rate. I don't particularly care which bank issues the card; I just decide based on signup bonus + rewards. I don't actually have any use for credit (lol) so I sign up for at least one new card every year. I just keep my credit score high enough that I don't get denied for new cards.
There's been some talk over the years that The Points Guy (who's often considered a shill in credit card churning communities) pushes Chase cards so hard because they offer him the best kickbacks.
Their various products (Freedom, Freedom Unlimited, Sapphire, Sapphire Preserved, Sapphire Reserve, Business Ink, and maybe a few others) all generate the same currency (Ultimate Rewards) but do so in different ways:
* The Freedom offers 5% (5 points per dollar) on a rotating set of categories that change each quarter. For instance, right now the categories are Gas Stations and Home Improvement stores, so put those purchases on that card (there's no annual fee), and 1% on everything else
* The Sapphire Reserve offers 3% on dining, travel and 1% on everything else. It ALSO allows you to redeem Ultimate Rewards points at 1.5x the value. It has plenty of other perks and a significant annual fee, so whether it's worth it depends on your lifestyle, but for many people it is.
* The Freedom Unlimited offers 1.5% on all other purchases, so it's a good fallback. No annual fee so no problem keeping it around.
The other cards have their own quirks as well. The point is that you can accumulate reward points on the various cards depending on the category of the purchase and them consolidate them all into one card (the Sapphire Reserve) for maximum value.
People who are truly dedicated will go even further and point out that technically, for optimum value, you shouldn't just redeem the UR points for cash/travel purchases and should instead transfer them as airline miles to various partners, but I've never found it worth it personally, as while I enjoy travelling my tier of travel is strictly coach to a variety of locations, not trying to save up 3 years of points for a first class flight to Dubai.
What are the spending requirements for the game to be worth it in money terms? And then there is the part where the game turns into work (I see keeping track of the several accounts mentioned above as a chore).
It all depends on what you want to get out of it. I don't make a living off points, but it's certainly been profitable for me as someone who pays off my cards in full every month. For reference, the signing bonus that was offered when I got the Sapphire Reserve (100K points, though it's been dropped since) was more than high enough to pay for my annual fee for the entire time I've had it so far, so everything I've paid for with points (which is thousands of dollars) has been pure profit.
as to whether it's worth it, depends how you value your time. I'm a fairly modest spender; I get about $150 in cashback rewards and $200+ from signup bonuses each year. I don't travel much, so it would be hard for me to break even on any points card with an annual fee. not a huge chunk of change, but a decent return on ~2 hours spent each year with an excel spreadsheet. there's not much month-to-month overhead if you use autopay and something like personal capital to track your finances.
The only one with an annual fee generally provides benefits of value beyond the fee, the others at least provided some value when I got them, and there's not much negative to having them, so I only close accounts if the bank is annoying (like Chase; not doing business with them again if I have a choice). Although I did close one last year because I was tired of remembering to use it once a year to keep it active.
2. Just open a new one. If you really can't get one, try here: https://myfirstcenturybank.com/ They open Bank Accounts for Russian criminals. Hence, should be hard to open one yourself.
ABSOLUTELY.
There is an old saying "Never stay with with the same Bank, Insurance Company, or lawyer for more than two years. Otherwise they think they own you."
While I think that 'two years' is a little paranoid, I like the overall gist of the saying.
Just some food for thought.
Bank accounts are guilty until proven innocent in the USA.
"It's a tax warrant, we process them entirely uncritically, steal the money" is not worth $150.