An Opinion About Credit Cards

[ThomWV]

I do not have a good opinion of credit cards. I made my mistakes with them and only got around a likely bankruptcy by the skin of my now long-gone teeth. When I retired and we took savings to clear off all of our existing debt we only kept one card, issued by our Credit Union and devoid of the trickery all the major card issuers have contrived to fleece customers.

That said it should not surprise you that I advocate regulations who's effect would be to strictly limit the ability of banking institutions (you can use your own definition here) to issue the damnedable things. I don't do it in the same spirit that I advocate the destruction of one-armed-bandits though; its not because I wish to eliminate the moral hazard of your or my own over exuberances, its because I think it would in every way be beneficial to our economy if available credit was extended after review by the lender rather than on the whim of each borrower. We'd find ourselves buying a whole lot less worthless junk and applying our borrowing power to things of greater gravity in our lives.

Anecdote: One evening back when I was in my early 40's a similarly situated friend and I were walking down town and talking about the absurdity of credit. We are both of humble origin and raised by children of the Great Depression so for us this statement was quite striking. I recall saying to him something on the order of 'do you realize that at this very moment I have more available credit in my wallet than the cost of my first house?' Now I should mention to you that not too many years earlier I had lost that first home (located in Miami, FL) to foreclosure just to give this a little perspective. How ridiculous was that? That a young fool like me with a recent enough history of unsound financial management should be given that much leeway with spending the bank's money is patently absurd.

While as a general rule I prefer that people have more choices than fewer I have to say that in the case of credit cards fewer is by far better.

[Paula Sims]

1. Frankly, they're safer than debit cards

Federal regulation stipulates that you're covered up to $50 in questionable credit card charges but with debit cards the rules are quite convoluted. Yes, banks can say anything they want about how they'll cover you and they can change their minds as they wish as long as they're complying with the law. The laws regulating debit cards are quite weak; in fact, ATM cards (NOT debit cards or those linked with credit cards) have tighter enforcement policies than debit cards. Also, if someone gets into your account via debit transaction, that's actual cash being taken out and who knows when (or if) the bank will "make you whole". With credit cards, it's a paper transaction.

[tularetom]

2. We did the big credit card shred a few years back

Although I always paid off the balance every month, at one time we had a dozen or more cards. Seemed stupid because all retailers take any bank card. I kept one plus a debit/credit card from our CU.

I always wondered how easy it would be to cash out all our cards up to our credit limit and split.