Saturday, September 5, 2009
Not a Holiday Topic
Don't let the image fool you. I haven't written today about the joys of life Up North. There's nothing here about books or reading, either. Sorry, summer is over, it's time for a rant, and here's mine:
There was a time, not so long ago, when a late credit card payment resulted in a $10 late fee: ten dollars added to what was owed, ten dollars that would not reduce one’s balance a cent and for which one had acquired no new product. I don’t know about most people, but I found that penalty a sufficient deterrent. It happened to me once, and I vowed it would never happen again. Lesson learned.
Well, now that doesn’t matter. It doesn’t matter how good your payment record is or whether you pay off your balance each month or how small that balance may be, because usury laws are a thing of the past, and credit card companies have realized that, sooner or later, everyone slips up. Reality and the freedom of the market thus open the door to unlimited opportunities.
The other day I received, as a “valued customer,” a letter from my credit card company. It was not congratulating me on my good payment record, let alone announcing a reward for that good record. Far from it. This was merely a “timely communication” (the anonymous letter writer patted the company on the back for their commitment to “timely communications” to customers) of changes to my account. There were several, but one stood out. The fee for any late payment, i.e., any payment received after the due date on my monthly statement, I was informed, will now be $39.95. Slip up by a day? Gotcha!
Forty dollars, however, is only the beginning, because—read the writing on the wall--the consequences for a slip-up are no longer aimed at merely encouraging timely payments. The companies have discovered a gold mine in punishment. So now a customer making a late payments is punished as severely as one writing a payment check that gets returned for insufficient funds: your interest rate goes up! How much? As a “valued customer,” I am informed by this “timely communication” that in the event of a late payment “the current penalty APR would be up to 30.24%.”
The card I hold is the State Democratic Party MasterCard. These days it is possible to hold credit cards to benefit any number of organizations. I could have taken out a card bearing the name of Western Michigan University or the University of Illinois or any number of organizations looking for revenue from supporters. The bottom line, however, is that the ultimate organization supported with the financing of credit card debt is the credit card company. This is reasonable, given that the company is the lender. Their terms, fees and punitive interest rates, should I falter on the path in the months ahead, are not reasonable but usurious. Unfortunately, usury is no longer against the law, and those individuals making company policy are no longer held in check by either ethics or civility. It’s a jungle out there.
The letter includes a brilliant final touch: “You have options.” Basically, I have two options, the first of which is to accept the new terms, the second of which is to have my account closed.
Where did this strange and perverted notion of contract arise, and what in contract law makes it possible, or is money-lending outside of contract law altogether? I have not studied law and ask the question out of genuine perplexity. How is it possible that an “agreement” may be changed, at any time, by one party and never by the other?
In defense of the company, I should recognize that no one has threatened to break my kneecaps if I’m late with a payment. Perhaps that will come in a future communication. What, after all, should one expect for a good credit record but threats?
--There, that's off my chest. Now to enjoy the holiday weekend, which for me will be the last "summer" weekend in Dog Ears Books. Autumn will be good, though, with some interesting events coming up in September and October, so keep reading, and I promise not to crank like this every day.