Credit Card Companies Find New Ways To Rip You Off

[Meg 368]

Originally posted by: Patricius Maximus

Their coffers only contain a fraction of total deposits. The rest is all out tied up in risky debt. What if a bank goes bankrupt, and there is nothing in the vault to pay out? What if the state deposit insurance fund was empty?

Like it or not, banks are not safe. They are only as safe as that which backs them up, which is a fraction of total deposits in the bank's coffers, and even less than the total in the government insurance fund. quote>

Let's not forget how insurance companies work.  They charge higher premiums to customers who engage in riskier behavior. 

If you get a lot of speeding tickets, your car insurance company is going to raise your rates.

Bank insurance companies can now do the same thing.   (They couldn't back in the 80s but that's a whole 'nother story.)

FDIC is one of the few federal agencies that receives no Congressional funding.  It raises money the old fashioned way:  by charging the entities it insures.  which, in this case, happens to be banks.

[soltangris 42]

The american credit card system is getting more and more tangeld up with every passing year. Well, I guess that

[MattShizzle 11]

There've even been stories of people getting a credit card pre-approved in the mail for their cat!

[Duke87 1,070]

I suppose a lot depends on what you choose to be more worried about: the FDIC failing and being unable to pay up, or losing money stored in a "mattress" to theft or fire. Neither is 100% impossible.

However, the latter is considerably more likely.

Now, on the matter of getting a "pre-approved credit card offer" in the mail and stuff like that... the problem really is that you need to not be a sucker. If, with a credit card in your hands, you spend like crazy and end up in a hole of debt you can't possibly get out of... you are a fool and you get what you deserve.

If, on the other hand, credit card or no credit card, you avoid frivolously spending money you don't have, and only take on debt for good reason (e.g., a morgatge on a house) that is reasonably within your means to pay off (don't buy a fancy car that costs more than you make in a year)... then you're being smart about it and need not be too concerned.

[your_adress_here 11]

Originally posted by: Duke87

I suppose a lot depends on what you choose to be more worried about: the FDIC failing and being unable to pay up, or losing money stored in a "mattress" to theft or fire. Neither is 100% impossible.

However, the latter is considerably more likely.

quote>

These days? Hardly. Especially with a fireproof safe.

[Easy Bakes 253]

Originally posted by: soltangris

The american credit card system is getting more and more tangeld up with every passing year. Well, I guess that´s what happens when they start practiacally ´giving away cards´, as they did in the last 20 years.

I had just arrived as a student there, with a meagre fellowship just enough to pay tuition and the bills, and they offered me a credit card in the first 4 months! After I spend 2 years being a good payer, I used to get 2 - 3 offers per month with $4000 guaranteed starting credit line. And me still having only the puny university fellowship! Now, how ridiculous was that????

So, now they´re trying to fix the mess. Don´t be surprised to see how the credit card world turns into a prison! I predict that they´ll start sending people to prison for unpaid debts soon.... Makes me soooooooo gratefull I got out of there on time.....quote>

Debtors Prision? already enough poor  people i jail

The credit card companies play a little game called acceptable loses.

Of course they could stop the fraud, and run backgrounds on thier applicants to make sure they are employed or can afford the credit limit. But those  procedures cost money. If they are only loseing 4% to fraud and nonpayments but it cost them 8%  for those procedures what do they do?

[blade2k5 1,523]

Originally posted by: Duke87

Because of the FDIC, you don't need to worry about the bank losing your money - it's guaranteed.

The same cannot be said of storing cash in your home, even in a safe. Locks can be picked, safes can be broken, buildings can burn down or get inundated by floods... there are very plausible means by which you could lose your entire life's savings if you're keeping it in a safe. A bank account, on the other hand, is infallible so long as you don't store more than $100k in it. Besides, cash in a safe doesn't earn interest and loses value over time due to inflation. Precious metals and jewels are just commodity investments and can also potentially lose value over time. You also can't write checks based on them.

Now, I don't particularly care if bankers are padding their own pockets by investing with my money - that's how investing works, and it's not like it's in any way at my expense. Indeed, I get a cut of it (the interest).

I think I'll keep my money in the bank, thanks.

quote>

You think so huh?  You like to assume don't you?  I've said it once and I'll say it again, never assume anything about me or how I do things because you'll be wrong every single time.  I have a much, much better place to hide my stash and not worry about theft, fire or whatever.  It is a lot safer than a bank, but I don't think you'll ever be able to guess where and how because it is so simple that 99.9% of people overlook it or never think of it.  And don't expect me to tell you either because then it wouldn't be a good hiding place, now would it?

[MattShizzle 11]

I think I have an idea.

Arrgh! Ye never find it.

[Duke87 1,070]

Originally posted by: blade2k5

You think so huh?  You like to assume don't you?  I've said it once and I'll say it again, never assume anything about me or how I do things because you'll be wrong every single time.  I have a much, much better place to hide my stash and not worry about theft, fire or whatever.  It is a lot safer than a bank, but I don't think you'll ever be able to guess where and how because it is so simple that 99.9% of people overlook it or never think of it.  And don't expect me to tell you either because then it wouldn't be a good hiding place, now would it?quote>

Oh, I trust that you have a great hiding place for it. Talking about "putting it in a safe" is just an example. It doesn't have to literally be in a safe like the ones the Looney Toons love to drop on each other.

No matter where you hide it, though, it can be found. That 99.9% of people overlook it or never think of it is all well and good, but what about that other 0.1%...

I, for one, am not going to assume that any hiding place is good enough.

[Patricius Maximus 236]

Originally posted by: Duke87

I suppose a lot depends on what you choose to be more worried about: the FDIC failing and being unable to pay up, or losing money stored in a "mattress" to theft or fire. Neither is 100% impossible.

However, the latter is considerably more likely.

quote>

If any person stores money (or at least most of it) in a mattress, then they're fools. A mattress is quite a vulnerable place. A fireproof safe (as one user pointed out) is the safest place to put my money. There is no place you can put money that doesn't have risk associated with it, but there are places where risks are minimal, and a bank isn't one of them.

In the case of the FDIC, there are many banks that have more money in insured deposits than is in the insurance fund. Let's just say that one of these banks fail, and the FDIC can't pay up. It's going to happen someday, and that bank might be yours. If that bank fails, you lose everything, and you'll wish that you'd have kept it in your own possession in a safe in your house (but not all of your money; its wisest to not have all eggs in one basket).

Originally posted by: Easy Bakes

So, now they´re trying to fix the mess. Don´t be surprised to see how the credit card world turns into a prison! I predict that they´ll start sending people to prison for unpaid debts soon.... Makes me soooooooo gratefull I got out of there on time.....quote>

If they do they'll be stupid. All it is is a waste of money, since you can't squeeze money out of a broke person, no matter how you lock them up. Well, unless they're the Federal Reserve or a counterfeiter.

Originally posted by: Duke87

No matter where you hide it, though, it can be found. That 99.9% of people overlook it or never think of it is all well and good, but what about that other 0.1%...

I, for one, am not going to assume that any hiding place is good enough.

quote>

Neither should you assume that any bank is safe enough.

[Easy Bakes 253]

Patricius Maximus ^^^

that was not my statement you quoted.

debtors prisions will never return.