Banks, Credit Cards and Kindle Downloads

[Zorrosuncle]

Greetings -- In a front-page article in the NY Times today, it was mentioned that the banks are planning to charge interest on credit card purchases from the time of purchase instead of giving the customer a free ride for several weeks.  In that Amazon lives on credit card purchases, how can one avoid this unhappy scenario when one purchases a Kindle book.  The only way in my opinion is for Amazon to start their own credit card service or perhaps bill customers, monthly.  These banks make it look like we are going for a free ride, but they fail to tell you that up to five percent of your purchase price is already assessed by the merchant and cardholder banks between them.  I don't feel like paying banks because I am a good customer who pays his bills on time.  Greed is greed!

I'd be interest in knowing how other readers would handle this.

Z U

[mwvickers]

I'm wondering if you use a debit card number instead of a credit card number if that would make a difference.  I would think it would, because it is basically the same as writing a check.  In other words, you aren't postponing paying, as the money comes right out of your account.

Do you have a link to an article on this?  Is it all companies?

[Zorrosuncle]

I do n't have a link; but I think the debit card idea is worth considering.

Z U

[mlewis78]

I need to find out if Chase Amazon Visa is going to do this.  Whenever I had a card in the past that did this, I stopped using it.  It's a ripoff.  I may just make the payment of the card online the same day to avoid interest, or just use my bank debit card.  There is also an option to pay directly from our checking accounts. 

We should all call our credit card companies to complain if this is what they're doing.  I just got a notice in the mail yesterday about an increase in interest on my Amazon Visa card from 8% to 14.5% (approximately).  I pay off my balance every month, but there may come a time when I won't, so I've got to be careful.  Life is expensive enough without credit card interest added on.

[LibbyD]

This is the pertinent statement:

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

Note that is says banks are expected to do those things, not that they are. 

Here is the link to the article:

http://www.nytimes.com/2009/05/19/business/19credit.html?scp=2&sq=credit%20card&st=cse

[mwvickers]

See, I can understand credit card companies being upset with those who get rewards but never actually pay anything (as you don't unless you either have an annual fee or pay interest), but my credit card does not have a rewards program.  Essentially, I just put gas on mine (plus a few other small things) and pay it off every month so that I can build credit.  I don't get anything for free from my company.  Because of this, I would be very upset if I either have to pay an annual fee or get charged interest immediately with my present card. 

I might think an annual fee is fair if I have a card that gives rewards, as that is the only way they could make money on me without my simply getting things from them, but that's the only reason. 

I refuse to pay interest on every purchase I make from the moment I make it. 

I'll switch to debit cards and cash if that happens.

[pidgeon92]

I use credit cards because they are convenient. None of mine charges any fees and I don't carry a balance. Were any of them to charge fees or rescind the grace period I would cancel it immediately.

[mlewis78]

I just called the number on the back of my card and talked with someone who had no say in bringing my interest rate back down to where it is right now.  I also asked her if they were planning on charging interest from date of purchase and the answer (as of today) was no.  This was for my card connected with Amazon that gives $25 rewards as I charge so much periodically.

[LibbyD]

Those who have concerns about credit cards should read two other articles in today's New York Times.

Senate Passes Bill to Restrict Credit Card Practices
http://www.nytimes.com/2009/05/20/us/politics/20web-credit.html?hp

A Consumer’s Guide to the New Credit Card Rules
http://www.nytimes.com/2009/05/20/your-money/20money.html?hp

[Shadowraven]

For money matters (and avoiding credit), might I also suggest Total Money Makeover (Kindle edition!)?  I'm not a "freak" about the ideas proposed in this book... but by following the basic first two steps, I've gone from $5,000 debt to about $2,000 debt since about February.  My hope is to be 100% off of credit cards once I get to 0.  Cash and debit only.

[Rasputina]

Pay with a debit card, that is what I do.

[Dori]

I just got a note from my credit card telling me that I had not used it in 12 months so they reduced my credit limit.  Suze Orman mentions this in her book that you should keep your credit cards intact as a reduction in available credit lowers your credit score.  I really don't care about my limit or my credit score however.  Just put this in here FYI.

[webhill]

Greetings -- In a front-page article in the NY Times today, it was mentioned that the banks are planning to charge interest on credit card purchases from the time of purchase instead of giving the customer a free ride for several weeks. 

Which article? I can't find any such article. I found several articles about credit in today's times, but none of them had such a statement within them. Thanks!

[LibbyD]

Which article? I can't find any such article. I found several articles about credit in today's times, but none of them had such a statement within them. Thanks!

See my first post.  I quoted the part that started this discussion, and I gave the link. 

[lynninva]

I have been using my debit card to buy Amazon gift cards for my book purchases.  I had been considering getting an Amazon credit card for the rewards option.

Now I am wondering if I should wait to see what changes the credit card company makes. 

ABC News Tonight mentioned that the banks are looking at charging annual fees, and charging interest from the point of purchase, as a reaction (retribution?) to the new credit card law enacted by Congress.  They have to find a way to make up the money they will be losing when they can't raise rates significantly whenever they want.

[Cindergayle]

I plan on using my debit card. No interest that way.

[Forster]

I use credit cards because they are convenient. None of mine charges any fees and I don't carry a balance. Were any of them to charge fees or rescind the grace period I would cancel it immediately.

^ This.

I use it for convenience and to rack up program points, period and it is paid off in full every month.  The CC companies assess a fee to the merchants up front so they are making money.  If they want to charge interest on top of it from the get go, I'll just switch to debit cards.

[MAGreen]

I always use a bank card for anything I buy. I don't like credit cards.
Kinda OT...the other day I was talking to a bank associate and he was telling me all the great reasons I should open an account with them. Yadda yadda yadda. SO I asked about the interest rate on their savings accounts, and he tells me that th saving account is really just a safe place to keep my money but I will get a whole .5%! I get twice that in my current checking, and by the way...my mattess is safe enough if I need a place to keep my money. It's as if they have become so complacent that they just expect me to hand them my money to fund their loans so they can make money without me getting anything in return.

[Karen]

I will just continue to use amazon gift cards from the coinstar machine, or my debit card.  I'm a retailer & pay enough fees to the banks & credit card companies so my customers can use their credit & debit cards.

[NYCKindleFan]

We use our debit card for everything as we are working to reduce our CC debt. Works great and keeps us from overspending!

[cheerio]

If you use a debit card they can not charg einterest on your own money that you have, but if you don't use your amazon card you will not get points to use towards new books. Just have to wait and see what the Amazon card does.

[L.Canton]

We use our debit card for everything as we are working to reduce our CC debt. Works great and keeps us from overspending!

I'm glad to hear this, as it's very important and I would love to see more people maintain this habit when possible. Credit cards have their place, but they have been heavily abused.

[MagicalWingLT]

I, as well use my debit card for everything... I will never use a credit card, as most companies will overcharge you with hidden fees... This has happened to my parents lots of times... And it's insane... So I play it safe

[Angela]

I use credit cards because they are convenient. None of mine charges any fees and I don't carry a balance. Were any of them to charge fees or rescind the grace period I would cancel it immediately.

I am with you, pidgeon. We use credit cards for everything and pay off each month. I can easily go back to cash or writing checks or using my debit card if need be.

[Kind]

I have not heard of this. I pay off my credit card bill fully as soon as the bill arrives. I don't know if this would be a good idea. 

[webhill]

See my first post.  I quoted the part that started this discussion, and I gave the link. 

I think we posted at the same time or something
Anyway thanks for the link, I checked it out. Seems like they are saying banks will consider doing that, not that they are definitely doing it, so I'm not going to worry about it unless or until it becomes reality (at which case all online purchases will be made with some kind of preloaded Visa debit card type of thing and the rest of my life will be cash only, since I refuse to pay interest on anything I don't *have* to, and convenience doesn't count).

-wh.

[webhill]

I, as well use my debit card for everything... I will never use a credit card, as most companies will overcharge you with hidden fees... This has happened to my parents lots of times... And it's insane... So I play it safe

On the other hand, I refuse to allow my bank to issue me a debit card, because of the inherent security risk. There is no cap on what can be taken out many times. There is no way to dispute charges. The card is linked to my bank account leading to more massive immediate losses in the event of loss of data by the merchant (which happens a lot these days) and again, I can't dispute charges.  So I play it safe and don't use a debit card!

[Pawz4me]

There is no way to dispute charges.

We've only had to dispute an incorrect charge to our debit card one time, but it was a very simple matter to get it removed.  One call to our bank, and it was removed in less than 24 hours.

[mlewis78]

I stopped using my debit card for online purchases a couple of years ago after reading that it was risky -- after all, it is my checking account.  I do use it for in-store purchases, groceries etc. unless I'm carrying a lot of cash.

[webhill]

We've only had to dispute an incorrect charge to our debit card one time, but it was a very simple matter to get it removed.  One call to our bank, and it was removed in less than 24 hours.

I am so glad that you were lucky! I prefer credit cards, where I am limited *by law* to a responsibility maximum of $50 in the event of fraudulent use. See:
http://www.pirg.org/consumer/banks/debit/debitcards1.htm for more information if this topic is of interest! I don't even have a bank-issued debit card anymore because of these issues. I've had problems in the past.

-h.

[marianneg]

Here is an article from The Motley Fool about why this shouldn't happen:
http://www.fool.com/personal-finance/credit/2009/05/20/dream-on-credit-card-companies.aspx

[MAGreen]

This would be really stupid, for them to charge interest right away, anyone who has the money will just start using bank cards and anyone who doesn't have the money upfront, isn't going to be able to pay the interest and is just going to get themselves in futher debt. I thought the ew laws were supposed to sto this kind of stuff?

[Ann in Arlington]

Well, both houses passed the credit bill, and the President is expected to sign it, probably tomorrow.  Slated to go into effect next February.