Activism: Credit Card Boycott

(Note, 5/27/2011: Sorry that I have scarcely updated this page since June 16, 2008. Hopefully someday I will get around to thoroughly updating it. Sorry about any information below that is out of date.)

Until the credit card industry stops inflicting horrendous, oppressive, usurious policies on people, especially the poor, unfortunate and desperate, I will not willingly give them any support, and I will not continue to be a customer from whom they can profit. They will only regain my support if they adopt moral, ethical, compassionate, and honest policies.

I strongly object to such policies as:

Huge late fees, huge over-the-limit fees, and jacked up interest rates if you're late. If you're late or over the limit to begin with, in all likelihood it's because you literally can't afford to pay, so all these penalties do is cruelly kick struggling, impoverished people when they're down. These are the people who can least afford an increase of the burden that's already upon them.

Then there's the penalty of "universal default" - where if you're late paying one creditor, many of your other creditors jack up your interest rates as well, even if you were always on time paying the other creditors. This policy is particularly egregious, since, especially in the long term, it can lead to literally thousands or tens of thousands of additional dollars supposedly being "owed".

Being battered with all these penalties can also lead to what is termed "negative amortization" - where, even despite paying your bill, your balance keeps going up as a result of all the interest and fees, and you end up sinking deeper and deeper into the hole at a greatly accelerated rate.

Sources for this info:

My own experiences, and some legalese on my own bills.
Washington Post: Credit Card Penalties, Fees Bury Debtors
AARP Bulletin: The Credit Card Sinkhole
What to do if you're 30 days late on a credit card bill
Reading a credit card statement (Page 2 of 2)
A long USA Today article describing many
of the standard dirty tricks:
Credit card fees can suck you in

Unreasonably high interest rates. There used to be laws, called usury laws, which prevented this - but the U.S. federal government repealed them, and some states never replaced them, and the credit card companies flocked to these havens of immorality.

Sources for this info: Credit card companies sidestep usury laws
Loan Rangers (focuses on payday loans,
which are even more worth avoiding)
Eight things a credit card user should know
Gigantic annual fees, start-up fees, participation fees, and the like. As if anyone should have to pay for all this disservice. As if it's such a privilege to constantly have the threat of huge and unfair penalties hanging over your head.

Source: My reading the legalese terms of various cards.
A good summary of many of the fees imposed:
10 Common Sneaky Fees Credit Card Companies Charge
Finance charges applied after you thought you paid off your balance. This bit me once - as you can read below.

I recommend a credit card boycott - cancelling your credit cards if at all possible, or at the very least, just paying off your entire balance in full every month. However, I've heard that the credit card companies also make money by charging merchants fees, so, it might be best to just get rid of the cards entirely.

Another possibility might be to just keep balance transferring your debts whenever possible so as to avoid paying high interest rates - except they'll be making money from the fees they impose on you for doing a balance transfer. Still, if you would pay much less in balance transfer fees compared to interest over time, it's worth considering.

In my experience, though, cutting credit cards out of your life entirely is the most satisfying approach, and safest at least in terms of avoiding the possibility of being the victim of the credit card companies' crooked, immoral fees and arbitrary rate hikes. Getting rid of your credit cards is not so safe if credit cards are your only source of emergency funds, however - and I don't know how it will impact your credit report.

I recommend sending them letters telling them what you're doing, and why. That it is in protest of their cruel policies and excessive fees, which line the credit card companies' pockets by kicking impoverished, struggling people when they're down.

I recommend demanding that credit card companies stop universal default, unreasonable interest rates, jacked up interest rates for late payment, and get rid of late fees, over-the-limit fees, finance charges, annual fees, start-up fees, enrollment fees, participation fees, and all other nonsense, altogether.

The credit card companies should be able to make enough profit by allowing people to carry a balance for as long as they like, paying at their own pace, without fees or penalties - with the interest unchangeably fixed at a reasonable rate, such as 5 to 12%.

The Power of Consumer Choice

The credit card companies have bitten the hand that feeds them - me and likely millions of other customers - far too many times already.

I think the credit card companies are totally undermining themselves by making it ever more difficult for their most impoverished customers to become truly prosperous. How can helping to ruin the lives of your customers be good business, at least in the long run?

But these companies probably won't listen to reason - nor will they relent, most likely, for compassionate, humanitarian reasons. Otherwise, they wouldn't be doing what they're doing.

However, money talks, and in the case of a business, that's probably the only thing they're going to listen to.

If they won't stop their unfair policies for logical reasons (such as it will be good for society, and thus themselves, in the long run), and if they won't stop them for compassionate, humanitarian reasons...

...Then they'll stop them because it's far worse for business and their bottom line, even in the short term, for them not to stop them - because their customers just won't stand for it.

People who are already enslaved to debt may have a hard time participating in this boycott. It might even be rather risky, since you'll be cutting off potential sources of funds to tide you over. Still, it might be worthwhile if you can manage it. But perhaps you shouldn't do it if you can't afford the risk.

Then there might be people who are well-off enough to be somewhat lackadaisacal about money, who are capable of paying off their balances, but who perhaps just let it roll over month after month because they have so much money that not wasting money is a minor issue to them.

And then there are people who use credit heavily to buy things, but who pay off their entire balances every month with ease. Even despite not paying interest, they still help the credit card companies get money, because of the fees credit card companies impose on merchants.

These people could easily make a powerful statement on behalf of the poor and unfortunate, merely by paying off their entire balances, and preferably also then cancelling their credit cards, along with sending a letter to their credit card companies expressing why they are doing so.

Debit Cards

Although debit cards might seem like a decent substitute for credit, debit cards are potentially problematic as well. The credit card companies can still make money off of them - merchants are charged fees when you use them. And, there might be fees for you too upon each use. So, debit cards would probably be a good thing to avoid and/or boycott as well.

Debit card facts - U.S. PIRG (Public Interest Research Group) Consumer Fact Sheet.
MSN Money: Debit card fees sneak up on shoppers

The Clear Card from American Express

I heard of this card on 4/27/2007 at about 11:28 PM EST or so, thanks to a television ad I saw about it. I was quite stunned by how reasonable the offer seemed to be - this is a card which purports to have:

[...] "absolutely no fees. No annual fee, no late fees, no over-limit fees, no balance transfer fees, no cash advance fees. No fees of any kind."
Source: Applyclear.com
on 4/28/2007
at 6:25 PM EST

I had to check this out. Anyhow, to cut a long story short, I was rejected for this card, which was quite disappointing. However, nonetheless, I think this card may be a herald of substantial progress for the cause of fair treatment of credit card customers.

If American Express's success with this card is drastic enough - and if the other credit card companies lose enough customers to the Clear Card - perhaps the other credit card companies may even follow suit and adopt far more reasonable terms just in order to be able to compete.

As of 4/28/2007 at 6:29 PM EST, the terms aren't ideal, in my opinion, but they are an improvement on every other credit card terms I know of, and American Express deserves kudos for that.

For a critique of the Clear Card's terms, go here:

Critique of the Terms of American Express's Clear Card

If you would like to read or post any comments regarding that critique, and/or your own experiences with the Clear Card, you can do so at this blog post in my blog.

Prosper.com

Prosper.com calls itself "The online marketplace for people-to-people lending."

I am quite dubious about Prosper.com, and I am not a Prosper customer, and don't think I'm going to become one in the near future - but I just thought I'd mention this site, because it seems like another possibility for shifting your debt around to some other lender and away from credit card companies. Of course, as always, I recommend being very cautious.

As for what to do with your credit cards if you get them paid off - see this section of my Clear Card Critique page for my thoughts, where I briefly weigh various of the drawbacks and merits of either cancelling, or keeping, your cards. Naturally I'm partial toward the idea of cancelling them, but if you desperately need them in order to survive, well, I understand you've got to do what you've got to do. Take care of yourself, folks.

Judging by this page, how good of a loan offer you can get from Prosper depends on your credit score, so, it looks like if you're in financial trouble, then unfortunately you may get screwed with high interest rates with Prosper too.

I recommend opting out of having Prosper deduct your monthly loan payment automatically from your checking account, even though they charge extra (according to this page) if you don't use their electronic payment "service".

I recommend opting out of automatic payments because, based on first-hand experience, I know that if you're financially struggling, automatic payments are very dangerous, due to the fees that could be incurred from someone trying to make an automatic deduction at a time when your account contains insufficient funds.

Once again, I recommend being very cautious. Though I registered at their site, I haven't used their services at all, so I have no idea what they're like or what to expect.

If you would like to read or post any comments regarding Prosper.com, and/or your experiences with Prosper.com, you can do so at this blog post in my blog.

Other Links Regarding Credit Cards

Congress-Related

Thank you to: (in alphabetical order by first name)

Senator Bernie Sanders, Senator Carl Levin, Senator Claire McCaskill, Senator Norm Coleman, and Senator Robert Menendez

for speaking out and/or taking action against the credit card industry's corruption!

There may be other Congresspeople who have done so and deserve thanks as well - I haven't researched this topic thoroughly. I'll add more Congresspeople and their links to this section as I discover or am informed of them.

Credit Card Companies Should Protect, Not Prey On Consumers - March 9, 2007.
By Senator Claire McCaskill.
Sen. Levin Holds Hearing on Credit Card Practices - March 7, 2007 news release.
Of Senator Carl Levin.
Senator Coleman Opening Statement at Psi Credit Card Hearing - March 7, 2007.
By Senator Norm Coleman.
Statement on the Introduction of the Credit Card Bill of Rights - April 26, 2006.
By Senator Robert Menendez.
Menendez Proposes Credit Card �Bill of Rights� To Protect American Consumers - April 24, 2006 press release.
Of Senator Robert Menendez.
Statement of Congressman Bernie Sanders on 4/4/2005 regarding: The Loan Shark Prevention Act - archived copy of this page from Archive.org.
Original, no longer functioning URL: http://bernie.house.gov/statements/20050404153834.asp
Tell Congress to Crack Down on Predatory Credit Card Companies Petition - this petition was closed in February 2007 after receiving 13,934 signatures, many with comments and pleas for help from Congress.
Senators grill bank execs on 'unfair' credit card fees - March 2007, USA Today. Some of the user comments on the article are interesting too, although due to a glitch, it may take a very long time for them to even load and be visible.

Consumer Complaints

The Federal Reserve Board - Complaints involving credit cards - In addition to various other useful info, this page has some nice, handy tips:

Quote: "If you have a problem involving your credit card, first try to resolve it directly with the store or the credit card company. If that doesn�t work, you may want to file a complaint with your state�s attorney general or banking agency. You may also file a complaint with the federal agency responsible for enforcing consumer credit laws for your credit card company."
The Federal Reserve Board - How to File a Consumer Complaint About a Bank - Quote: "If you think a bank has been unfair or misleading, discriminated against you in lending, or violated a law or regulation, you have the right to file a complaint".

Credit Report-Related

You're Hired... If Your Credit's Good - archived copy of this page from Archive.org. Apparently, now you can be denied jobs simply for having bad credit. This link was contributed by an anonymous commenter in this comment - thanks!
Original, no longer functioning URL: http://www.tbo.com/news/money/MGBKOD797ZE.html
Your Credit Report - Excuse for Discrimination? - 7/3/2007 - My own blog post.

Educational

Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders - a documentary, which came out in theaters in March 2007. I haven't seen anything besides the trailer (and a few of the clips), but it looks good.
- Trailer | About | Director's Statement | Quotes
- The Book - featuring an audio book clip, length 00:03:27.
  The book is available here, not that I'd necessarily recommend Amazon as the cheapest place to buy it (but maybe it is, I don't know). I'm just linking there because Amazon's page is informative.
PBS Documentary: The Secret History of the Credit Card - The entire show is legally viewable online at this website.
Credit card interest calculator
Wikipedia article: Credit card - direct link to Controversy section. Of course, Wikipedia isn't really a completely trustworthy source, given how it can be edited by anyone at any time.
Young & In Debt - January 9, 2007. A USA Today/ABC News feature. "Follow five twentysomethings as we explore how young people are struggling with high levels of debt just as they are starting out on their own. In our six-week series, learn how to meet your expenses, reduce your debt and start saving."
I think it's deplorable that carrying so much debt is even accepted as a "normal" way of life in our society. No one should have to go into lifelong indentured servitude just to be able to get a house, go to school, pay for health care, and so forth.
How To Escape Card Debt - Dec. 15, 2006. One of the articles from Week 4 of the USA Today/ABC News feature Young & In Debt. Basic but mostly useful tips.
However, I think setting up any automatic transfers from your checking and savings account is an extremely bad idea, because if you ever have insufficient funds in your bank account, the bounced check fees and so forth can really hurt you, and if you can't pay them, you might end up without a bank account.

Legal Actions and Law-Related

Credit Card Late Fees May Be Illegal - posted March 28, 2007 to The Bullshit Observer blog.
Merchants Sue Credit Card Issuers Seeking Lower Fees - September 27, 2005. Even merchants are unhappy with the credit card companies. Because credit card companies charge fees to merchants, you can do merchants a favor by paying in cash or some other way that doesn't involve credit or debit cards.

Lists of Credit Cards

In an ideal world, everyone would be in a position to be able to easily boycott all credit cards entirely, but for many people, it may not be realistically feasible yet. But, it may be possible, and perhaps a good idea, to take advantage of the wide range of credit cards available from various different providers, and keep shuffling your debt along to the next card if one company screws you.

Credit card companies hate this, and they have a name for people who do this - "rate surfers" or "gamers". (Source for this info: Secret History of the Credit Card: Introduction).

The more cards you have, then, perhaps, the more you can keep shuffling your debt around from card to card and perhaps avoid late and over-the-limit fees, and ridiculously high interest rates - as long as the cards don't get filled up completely. However, if some emergency arises, the temptation to put the expense on your credit cards may be irresistible - that's why I think the surest method not to keep building up credit card debt is to get rid of your credit cards.

I guess I can't recommend a single course of action that will universally work the best for everyone. Depending on your exact situation and tendencies, having multiple cards might good, or it might be very bad. For me, though, I'm guessing I would be in worse shape if I still had as many cards as I used to, because if I hadn't cancelled them, the constant financial strain my family is under would probably have pressured me into filling up those cards too, and my total balances might currently be around $13,000, instead of just $10,000.

So, all I can recommend is to just do your best in deciding what's best for you, be careful, and good luck.

Personal experiences

Tell Congress to Crack Down on Predatory Credit Card Companies Petition - this petition was closed in February 2007 after receiving 13,934 signatures, many with comments and pleas for help from Congress.
Communications from Elsewhere > Blog Archive > Predatory credit card companies suck

Protests, Boycotts, Etc.

Bank of America Boycott - a boycott of only Bank of America. My only complaint is that they're only boycotting Bank of America, and not all credit card companies.
In my opinion, every credit card company which has exorbitant late and over-the-limit fees, usurious interest rates, and jacked up penalty interest rates, penalizing the poor for being poor, is doing something very wrong - and as far as I know, the credit card companies pretty much all have those policies, like some kind of despicable cartel.
As for the issue of illegal immigration - I don't know enough about that to have an opinion on it. But any boycott of credit cards is a good idea, in my opinion.
Boycott Chase Bank and Learn What Not to Do In Customer Service - April 19, 2007. A blog article about another worthy cause. I myself have been boycotting Chase since April 2006, due to the late fees and jacked up interest rates they gave me.
If you want to help promote this Chase boycott, you might want to visit that article's Digg page and give it a Digg.

Finance Charge Warning

By the way, be cautious if or when you pay off your balance. One month, sometime in the first half of 2006, I thought I had my Sears Gold Mastercard paid down to $0, but unbeknownst to me, they unexpectedly tacked on a finance charge.

I thought it was totally paid off, so I neglected to check my statement for a few months - and thus didn't find out about the measly one dollar I supposedly owed. Admittedly, it was partly my fault - I should never have trusted a credit card company not to try to mess with me.

Anyhow, the next thing I knew, I found out that my account was "in collections", and they had given me a couple months of $15 late charges. I tried to get them removed, but, no one could do anything since it was in collections.

(I will give them a bit of credit - ha, ha, no pun intended - and point out that their customer service people were nice and polite, even though they couldn't really help. However, none of them did me the favor of telling me that these late charges would mess up my credit report).

That was the last straw, after all these years of BS from credit card companies. I paid them their !@%^&*!ed late fees, but I also cancelled my card, and I'm very glad I did.

As for the stain on my credit report the supposed "delinquency" has left (since I wasn't well-informed enough to know to try to get it removed) - I don't care, because I loathe debt and I loathe credit card companies, so if this prevents them from extending me any more offers to be enslaved to them, good riddance!

The moral of this story is, watch your credit card companies like a hawk, and don't even use credit cards at all, if you can possibly avoid it.

Your Comments

If you would like to read or post any comments regarding this page, you can do so at this blog post in my blog.

If you want to suggest ideas or links, please do - I might add some of them to this page. If you're participating in this boycott, I'd love to hear about it. Feel free to announce which cards you've cancelled and go into detail about why and how, if you want.

Or, even if you're not yet participating in the boycott - if you just want to vent your spleen regarding credit card companies, feel free. Or, if you want to criticize this boycott, feel free to go ahead and do that. You're also welcome to discuss things with other commenters if you want, even though blog comments aren't really the best medium for a discussion.