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Thursday, November 23, 2017

Sorry America, Your Card Is Declined

Credit:

The looming consumer credit crisis and why I'm happy Citibank cut me off.

“I’m sorry sir, the card is declined”, said the middle aged Arab looking man with a twinkle in his eye I didn’t quite appreciate. I was at Thanasi’s, my former favorite liquor store, trying to put a $20 bottle of vodka on my credit card. I knew it wasn’t overdrawn because I’d happened to check the balance that morning. “There should be plenty on that card….”, I said. He ran the card again. “Still declined. We have an ATM right there”, he said, pointing to a machine that will mug me for $2.50, in addition to the $2 Bank of America will charge me. He was still staring at me with that damn twinkle in his eye and a barely contained smile. It was a standoff. I assumed he was one of the owners and just didn’t want to pay the credit card fees. That or he was just fucking with me, which was unlikely. “I would, but I don’t have the cash. Sorry”, I said, and walked out.

On the sidewalk outside I called Citibank. They had no record of the card being declined, or run for that matter. Fuck! You!

Not long ago this incident would’ve surprised me. But lately, strapped for cash, I’ve been trying to put everything on my credit card. And it’s amazing how much attitude I’ve gotten over it. The zombies at Walgreens don’t care. But at the small independent stores I frequent here in the Mission (the ones really feeling the pinch of the escalating credit card fees), hand them a credit card and they act like you’re plopping a steaming pile of dung on the counter.

Credit is blocked at every turn. A surprising number of places simply don’t take credit cards (like ALL the good dive bars). And the ones that do all have minimum fees that seem to go up every day ($20 at bars, $10 at convenience stores, $5 at coffee shops). The rule, it seems, is that the limit be just more than I want to spend. Order a two dollar coffee and I have to sit there trying to figure out which pastry to buy even if I don’t want one. Consume more!

In a way, I find it sickly fascinating. If only because it’s the first time in my life a story in the business section has directly touched my life; the credit crisis. Yesterday it touched me quite inappropriately.

I was trying to buy a pizza (I do consume things other than pizza and vodka, btw), and my card was declined. There was no twinkle in the clerk’s eye this time though, and I’d had no problem with the card since the liquor store incident. I began to get worried. Had someone spent the nearly $1,000 I still had left on the card? I rushed home with my pizza (thanks Discover!), and looked at my account online. It took me a while to figure it out. There were no unauthorized transactions. Citibank had simply lowered my limit by $1,000. The credit card company had cut me off.

Confused as to why they’d do that (I always pay on time!), I started doing a little research. The results were sobering. Apparently the banks writing down billions from the subprime mortgage crisis are also some of the biggest owners of credit card debt. This is potentially very bad. As home prices continue to plummet, and food and gas prices continue to rise, people are turning to their already stretched credit cards. This is spawning speculation of another debt crisis, this time in the consumer credit market. Citibank, it appears, it especially fucked. In April it posted a net quarterly loss of $5.1 billion, and was recently ranked by Standard and Poor as #2 in exposure to risky credit card debt. Analysts predict it could write down another $17 billion in the next quarter.

Fortunately for Citibank, it has the ability (as do all credit card companies) to change your contract at will. They can lower your limit, increase your APR (as they did to me a couple months back), or recalculate your minimum payment. It doesn’t matter how much you’ve forked over in on-time payments.

For a good, detailed look at the credit card game check out this Frontline documentary you can watch online for free.

I have to say though, my recent anger at credit card companies has been short lived. Because honestly, I’m glad they cut me off. Credit cards are just. So. Evil….. Deceptive, predatory, Evil. They enable us live beyond our means, which of course most of us do—Americans are drowning in credit card debt. And before we know it, they’ve got us. We resign ourselves to a life of debt and spend the rest of our lives working off interest. And it’s the worse deal you’ll ever have. Buy a $12 pizza and in the long run it ends up costing $112. Oh, and if the credit card company happens to sell a bundle of predatory mortgages to people with no understanding of how they work and no means to pay, triggering a worldwide financial crisis, it’s on you buddy. Up with the interest rates and nothing you can do about it.

I’m choosing to view my credit card situation as a good thing. Just like it took a quadrupling of gas prices for people to start giving a shit about the environment, maybe cutting off people’s credit is the only way they (me included) will start living within their means.



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travelingseth is a writer for BrooWaha. For more information, visit the writer's website.
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10 comments on Sorry America, Your Card Is Declined

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By Gerard Barberi on July 20, 2008 at 10:58 am

I think I'm going to try what Julian did.  I need to ween myself off that addiction as well.

I started not using them.  But, then somewhere along the line, I got really strapped for cash and started using them more often.  And, I even started charging things for the "instant gratification."  Now, I have too much debt, I have to pay it off. 

The interest is killer.

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By travelingseth on July 20, 2008 at 08:13 pm

Wow.  Great comments. 

I'd definitely like to just get rid of the cards someday as Julian has.  Props to you for finally doing it!  Working as a freelance writer though, it's been really hard not to lean on them durning lean times <-- (excuses, excuses....)

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By D. E. Carson on July 20, 2008 at 11:44 pm

Citibank just plain sucks as a financial institution.  I keep hoping they will go tits up and then just go away.  As an FYI, if you have a credit card from Lowe's, Home Depot, Sears or several other national store chains, check your card very carefully as you may find that the account is actually serviced by Citibank.  The three I listed are for sure Citibank puppets.

I agree that people need to stop living beyong their means.  This whole credit debacle may be just the thing we need to get people to stop living on credit and start living on CASH again.  Credit cards are the worst example of predatory lending in the world and the time has come that the people (not the government -- they had a chance to bitch-slap the credit card industry and instead passed the bankruptcy modification bill that made it impossible to declare bankruptcy and get rid of your debt and start over) reach out and slap the industry.

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By travelingseth on July 21, 2008 at 03:24 am

I totally agree that the people need to deliver the slap.  Idealistically, we could deliver the slap via the democratic system, but unfortunately nobody can seem to be bothered with that.  Instead, I think the battle will be fought person by person. 

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By sanjanakumar on July 22, 2008 at 10:58 pm

great article.  even the taxicabs take credit cards but alot of times the drivers will telll you the machine is broken so they don't incur the surcharge. 

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By travelingseth on July 23, 2008 at 05:55 pm

Yeah, I've run into that one too.  Kinda hard not to sympathize.  Especially now with the high gas prices.

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By Lila M. on July 25, 2008 at 10:40 pm

I condensed everything to one credit card for emergencies and a debit card.  I remember in college all the credit card companies used to line up with "free gifts" which was usually a stupid t-shirt or mouse pad or something trying to claw students into signing up.   I know alot of people who got sucked in and in trouble for using it like it was free money. 

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By Steven Lane on July 28, 2008 at 12:15 am

I used a Band of America debit card in Mexico in May. I took out $40 for a lunch. I got charged $2 by the Mexican Bank, $2 by BofA and later $5 bucks by BofA for a "foreign transaction fee".

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By Steven Lane on July 28, 2008 at 12:15 am

Bank of America even

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By travelingseth on July 28, 2008 at 02:32 pm

Yeah, the fees are where they get you these days.  I have B of A and for checking and a credit card and they've feed me to death.  It's almost enough to make me start shopping around for another bank.

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