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Gerry Clinchy
10-16-2009, 05:42 PM
At least they are up-front about their motives.

I just got one of those fine-print "Change of Terms" notices from Chase. At the very end under "Other Notices" it clearly states:
"The principal factor we considered in amending your account is maintaining profitability on your account.";-)

Among the reasons they can choose to close my account is "account inactivity".

I guess the name of the game is not how responsibly you use credit anymore. It's more a matter of how much profit they can make on you. They make the most money when you take cash advances; and even more if you then make a late payment. Since I don't do that, I'm not a very profitable customer, so they'd rather not have me as a customer at all.

In the end, they end up with a lot of high-profit customers ... but maybe also a lot of high-risk customers. They make a nice profit until the house of cards collapses. Is there something about this "business plan" that sounds famililar?

subroc
10-16-2009, 05:55 PM
Outrageous!

A business that wants to make money.

dnf777
10-16-2009, 06:00 PM
Outrageous!

A business that wants to make money.

No problem with that premise......but what about when they screw the pooch because they cut people like Gerry, and extend credit to manic shoppers to get a short term blip on their books....and come to me and you with their hat in their hands, asking for our tax dollars?

Capitalism is a double edged sword. They want capitalist profits, then socialized losses. BS if you ask me.

Gerry Clinchy
10-16-2009, 06:28 PM
They want capitalist profits, then socialized losses

Yes, Subroc, this is what I object to: a business practice designed to have more high-risk customers, then crashing under the load if the economy gets tough,going back to the responsible people (the low-risk customers they didn't want) for tax money to solve their problems.

I always thought it was good for business to have customers whom you knew would pay their bills. But in this case, they'd rather make the quick buck on the high-risk customer, much like the bad loans they wrote ... then whine if the gamble goes bad.

There is another problem ... I started out with one Chase credit card. I ended up with 3 of them as Chase bought out smaller banks. Citibank and Bank of America followed a similar path. What I really don't like is that these large banks are getting so powerful that if you don't like their practices, the choices of taking your business elsewhere are becoming more limited.

subroc
10-16-2009, 06:32 PM
I am not an advocate of them coming with hat in hand and the nation giving them anything.

I don't believe they cut Gerry (hopefully he will clear it up) they just explained their terms.

luvmylabs23139
10-16-2009, 06:59 PM
This is actually a predicted result of OBUMMA'S new consumer credit protection crap.
They took away CC companies ability to instantly increase interest rates and fees on a client when they become a higher risk.
CC companies are closing inactive accounts to eliminate the cost of maintaining the accounts, they are either increasing or adding annual fees to people who pay their accounts off every month.
Bottom line, BUMMA screwed the good customer in order to pamper the deadbeat.

Gerry Clinchy
10-16-2009, 07:12 PM
I don't believe they cut Gerry (hopefully he will clear it up) they just explained their terms.

You are correct, Subroc, it was just one of those "boiler-plate" notices that they send out periodically.

Ultimately, they probably will close my account, because I don't use it much. I went through that with Bank of America. They sent me a letter saying that they were going to close my account for non-use. Just had to make one purchase with the card before a certain date to avoid having that happen.

It really makes no difference to me if they close the account or not. But I was really struck by the statement about profit being their primary consideration WRT to my account. Whenever they send out those balance transfer offers or cash advance offers, it's always about how I'm a preferred customer. Nope.

They are relying on people for their profit who grab the "bait and switch" low interest rates on those offers, and fail to notice that those gimmick rates only last 6 or 12 months before they revert to the 14% and 19% rates! The people who will fall for that are probably either desperate or irresponsible. In either case, not a great risk. The lender will make some bucks for a while, then lose quite a bunch. Just takes a few years for the gimmick to run full-circle.

Gerry Clinchy
10-16-2009, 07:20 PM
http://news.yahoo.com/s/ap/20091016/ap_on_bi_ge/us_earns_bank_of_america

Guess this is part of the story as well.

K G
10-16-2009, 07:21 PM
So the banks are sitting on millions/billions of bailout money from this administration, paying less than 1% interest for it, loaning it out at 4.5% and up (WAAAAY up in the case of credit cards), and paying it back every-so-slowly....and giving bonuses to their executives like they did before this financial mess started....and credit is harder to find than ever....:rolleyes:

I thought the BHO administration was all about "change?" We're taking another long walk down a short pier with our economy while the emperor fiddles....him and his congressional majority....

Hang on folks...this next flight is gonna be a LOT bumpier than the first one...:cool:

kg

Raymond Little
10-16-2009, 07:51 PM
Barak Housein Obama,,,MMM!:rolleyes:

Gerry Clinchy
10-17-2009, 08:50 AM
http://www.nytimes.com/2009/10/17/business/economy/17wall.html?_r=1&th&emc=th

Yup, reported in the NY Times today, it seems this discussion was quite timely.