I guess I always knew we were being watched but it gave me the shivers nonetheless when I read in the New York Times Sunday Magazine that the evil ones -- that would be the credit card companies -- had taken up spying on us. We already know that years ago they started scurrying around like panicked rats, worried that they were only making money off things like standard interest rates on unpaid balances, annual fees, and the usual rate hikes on the delinquent. Never mind that they were already laughing all the way to the bank a/k/a home sweet home; they wanted more. No one ever said that sustained effort, focus and determination don't work. Pair these things with endless funds, and success is virtually guaranteed. In any case, all that mad scurrying and racing to the bottom of the greed barrel resulted in two aha! moments for the demon executives of Visa, MasterCard and American Express, just to name the top three. 1) They figured out that they made more money off people who defaulted, and, 2) they devised a way to identify those most likely to default. How? By scouring and analyzing the spending habits of their customers -- information provided to them on a daily basis by us, their unwilling victims.
In the good old days, before the economy melted like a giant pat of butter in a frying pan, they were able to gorge on the excesses of green college students, shopaholics and the working poor -- all of whom they seduced with low introductory rates then waited, like vultures, for them to screw up with late or missed payments. But after the meltdown, when far too many of their customers started going down that road, they realized they had to revamp their model. They now take all our private information, and use it against us in a brand new way.
Did you know that if you buy a no-name brand of motor oil for your car, you are more likely to default on your credit card payments? And I bet you didn't know that if you pay your dentist with a credit card, you are less likely to default. Enjoy a good game of pool? Deadbeat! Like to feed your feathered friend premium birdseed? That means you're a stand-up kind of guy. Visit a pawn shop lately? Uh oh. Sure indicator of despair. Seeing a marriage counselor? No doubt about it, you're going to break up soon, end up with half your income and, bingo! default on your credit card payments. Expect to get your rate hiked so they can collect as much as possible from you before that happens. Do you check your online balance in the middle of the night? That indicates anxiety. Call the credit card company during the day? Shouldn't you be at work? That must mean you're unemployed. Don't be surprised if they suddenly tell you that your card is canceled.
The problem with this tactic is its arbitrariness. I'm one of those good customers who try to pay their balance off every month. I don't always succeed -- especially when my business goes through its annual slow season -- but I'm always on time, and make substantial monthly payments. Yet, I've paid my dentist plenty of times with a credit card; I've purchased no-name brand motor oil for my car because I believe in using generic brands whenever I can; and I'm self-employed, so when I call my credit card company in the middle of the day with a question, that does not mean I'm out of a job.
There have been untold accounts in recent months of perfectly good customers being flummoxed at having their rates hiked or cards canceled. Ever notice how those customer representatives are at a loss to tell you why? Because, according to the article, "...they worried that customers would revolt if they found out they were being studied so closely." You bet your ass, buddy. Can we get going with that revolt, please?
As Congress gets ready to vote on a bill that will limit the damage the credit card rats can inflict on customers, let me tell you they are scurrying even more now. Reports say they're getting ready to target their best customers (with sudden rate hikes, etc.) in order to minimize the "damage" being inflicted on them -- that damage being their inability to continue gouging the most vulnerable among us.
For years I've wondered out loud why the US government seemed hellbent on allowing banks to bankrupt its citizens. Could it really just be for the purpose of enriching its corporate fat cat friends? I thought that was just too shortsighted, but silly me! As Obama tries to address this issue, there is plenty of griping about him being too tentative and not going far enough. I, for one, would like to see a slash and burn approach to the rodent problem. But I fear this thing -- so deeply entrenched in the corridors of power as it is -- may have to take a slower road. I think Obama is like a chess player, whose every move, which may not seem to make any sense at first, builds toward a specific end goal. I certainly hope so, anyway.
In the meantime, although we've been set up to depend on credit cards to navigate the lives we live (try renting a car without one), I think the thing we can do as individuals is to start using them less. For starters, let's start using debit cards and cash as much as we can. F*#@! these guys.