We Built This City On….

No. It was not built on Rock N Roll. But we did build this city on “Fee Harvesting”. Google that sometime. Hours of insightful reading will await you.

Last week I suggested this in the Sioux City thread.

Just sayin…when you stop to think about WHAT built this town into a city larger than Sioux City…well the pieces all start to come together.

http://www.pbs.org/wgbh/pages/frontline/shows/credit/view/

http://marketplace.publicradio.org/display/web/2009/03/25/pm_sioux_falls_i/

The REAL reason SF surpassed SC in population back in the eighties lies right here in those two links. The PBS link is especially good. Watch it…especially the first installment called “Over a thousand miles away from Wallstreet”… then we can discuss.

firstpremierloanshark[1]



22 comments ↓

#1 l3wis on 01.18.10 at 7:14 am

Are you saying that instead of chopping up bacon in Sux Falls we were chopping up people’s credit ratings?

#2 Helga on 01.18.10 at 4:46 pm

It stinks but it is a whole different kind of stink.

#3 Costner on 01.18.10 at 7:34 pm

Yea it sucks – but it isn’t exactly the only thing Sioux Falls has going for it. As much as people like to pick on Denny’s other industry, we have to admit we have an incredible healthcare system here which employs thousands of people (and one which continues to grow and employ new people).

Frankly the credit card industry doesn’t really seem to be growing all that much anymore – so perhaps the golden era of credit card companies in Sioux Falls is over.

Besides – Sioux Falls didn’t just grow based upon predatory lenders… there are a lot of ‘good’ credit card companies here too you know. I don’t think Citibank or Wells Fargo has a card with a 79.9% APR.

#4 Helga on 01.18.10 at 8:35 pm

I read this story the other day.
Kathy Kristof on CBS Money Watch wrote that she got a Macy’s “instant credit” card while Christmas shopping and that card made the 79% (Sanford) interest rate look like a “bargain.” She said “Department Stores National Bank, which issues the card, charges a “minimum interest charge.” On my average daily balance of $3.41, that minimum charge worked out to “an actual annual percentage rate” of 703.80%. (Part of the impact of last year’s credit reform is that the issuer had to disclose that shocker on the statement, while also noting that the card’s normal APR is 24.5%.)”
“Such are sneaky new fees that are now springing up in response to the Credit Card Accountability, Responsibility and Disclosure Act passed last May, said Bill Hardekopf, president of LowCards.com, a rate-shopping web site.”
Department Stores National Bank issues Macy’s credit cards and Citibank is their parent company. Gee what a surprise.
http://moneywatch.bnet.com/saving-money/blog/devil-details/credit-reform-and-my-new-7038-card/1355/

#5 Poly43 on 01.19.10 at 4:18 am

there are a lot of ‘good’ credit card companies here too you know. I don’t think Citibank or Wells Fargo has a card with a 79.9% APR.

Can you say oxymoron cos? LMFAO

Wells Fargo??? Are you saying Wells Fargo does not have a predatory credit card division? Are you suggesting Wells Fargo is somehow above it all? Not even close. How bout these numbers cos?

From a Wells Fargo card offer preying on kids.

5.90% introductory APR for 6 months.

After that your APR will be 11.65% to 21.65%, based on your creditworthiness …another LMFAO

APR for Cash Advances and Overdraft Protection Advances?

23.49%

Default APR?

27.24%

Balance Transfers $5.00

Cash Advances $10.00

Overdraft protection or Tony Soprano protection money?

$10 if the total of overdraft protection advances for the day is $25.00 or less;
$12.50 if the total of overdraft protection advances for the day is $25.01 – $100;
$15 if the total of overdraft protection advances for the day is $100.01-$500;
$20 if the total of overdraft protection advances for the day is greater than $500

Late payment fee?

$20 for balances less than $250; $29 for balances of $250-$499.99; $39 for balances of $500 or more.

Over limit fee?

$35.

Even more good news. Compliments of the company cos apologizes for.

http://www.bloomberg.com/apps/news?pid=20601087&sid=awlcvwc.dpdM

#6 Poly43 on 01.19.10 at 4:41 am

there are a lot of ‘good’ credit card companies here

~cos

oxymoron cos

#7 Poly43 on 01.19.10 at 4:43 am

Wells Fargo??? Are you saying Wells Fargo does not have a predatory credit card division? Are you suggesting Wells Fargo is somehow above it all? Not even close. How bout these numbers cos?

From a Wells Fargo card offer preying on kids.

5.90% introductory APR for 6 months.

After that your APR will be 11.65% to 21.65%, based on your creditworthiness …another LMFAO

APR for Cash Advances and Overdraft Protection Advances?

23.49%

Default APR?

27.24%

Balance Transfers $5.00

Cash Advances $10.00

Overdraft protection or Tony Soprano protection money?

$10 if the total of overdraft protection advances for the day is $25.00 or less;
$12.50 if the total of overdraft protection advances for the day is $25.01 – $100;
$15 if the total of overdraft protection advances for the day is $100.01-$500;
$20 if the total of overdraft protection advances for the day is greater than $500

Late payment fee?

$20 for balances less than $250; $29 for balances of $250-$499.99; $39 for balances of $500 or more.

Over limit fee?

$35.

Even more good news. Compliments of the company cos apologizes for.

http://www.bloomberg.com/apps/news?pid=20601087&sid=awlcvwc.dpdM

#8 Poly43 on 01.19.10 at 4:45 am

From a Wells Fargo card offer preying on kids.

5.90% introductory APR for 6 months.

After that your APR will be 11.65% to 21.65%, based on your creditworthiness …another LMFAO

APR for Cash Advances and Overdraft Protection Advances?

23.49%

Default APR?

27.24%

Balance Transfers $5.00

Cash Advances $10.00

Overdraft protection or Tony Soprano protection money?

$10 if the total of overdraft protection advances for the day is $25.00 or less;
$12.50 if the total of overdraft protection advances for the day is $25.01 – $100;
$15 if the total of overdraft protection advances for the day is $100.01-$500;
$20 if the total of overdraft protection advances for the day is greater than $500

Late payment fee?

$20 for balances less than $250; $29 for balances of $250-$499.99; $39 for balances of $500 or more.

Over limit fee?

$35.

#9 l3wis on 01.19.10 at 6:58 am

“we have to admit we have an incredible healthcare system here which employs thousands of people”

And it costs a fortune. I recently had a relative spend one night at the Heart Hospital for an angigram and to have two stents put in.

The cost; $42,000.

#10 Costner on 01.19.10 at 7:59 am

You’re right Poly – there are no good credit card companies, and therefore surely nobody should use them.

No financial institution should ever turn a profit, none of them should ever bother to give credit to anyone who is a risk (which is everyone) and they should never be allowed to charge any fees or tier interest rates towards those who are most likely to default on their bills. Instead those banks should actually lose money with every credit card to show everyone how much they care!

Yes, in a perfect world where unicorns frolic in daisy filled meadows and where rainbows cover our fair city each and every day, there would be no such thing as a credit card company.

Then again…why is it we never discuss the people who sign up for these cards in the first place? I’m all for disclosure, but clearly if the disclosure form says 79.9% interest and someone still signs up for it… we should blame the bank right?

Poly: From a Wells Fargo card offer preying on kids.

Wrong again poly. “Kids” cannot legally obtain credit cards… even you know that. Besides – those terms are obviously clearly published (since you had no problem finding them) so what is the problem? Are you suggesting Wells Fargo should simply allow anyone and everyone with no credit history to have a card with a 6% APR? I notice there is no annual fee listed… but I guess fees that apply to everyone you don’t seem to have any issues with – you only whine about fees which are related to overlimit, overdraft or late payments.

That makes perfect sense… to someone who has zero sense of personal responsibility and who constantly blames companies rather than individuals.

#11 randall on 01.19.10 at 12:47 pm

Costner – that’s quite a leap from predatory lending and fee harvesting to “No financial institution should ever turn a profit, none of them should ever bother to give credit to anyone who is a risk…”

There exists some middle ground, and I think you know it.

#12 Costner on 01.19.10 at 2:40 pm

randall: There exists some middle ground, and I think you know it.

The terms that poly posted for the Wells Fargo card seem to me very much the middle ground. A card that is primarily marketed to young college age students and young adults with little or no credit history with an APR ranging from 11.65% to 21.65% and no annual fee seems like a fair agreement if you ask me.

However for some – clearly that isn’t good enough. Obviously poly feels those terms are a joke otherwise he wouldn’t have posted it here with the reference to “preying on kids”. Apparently there is no middle ground for people who have zero belief in the concept of personal responsibility.

Heck – if everyone always paid their bills and nobody ever defaulted on a credit card, we could all get credit cards with 4% interest rates, but this is the real world – and no financial institution can afford to pass out credit without factoring in the associated risk… thus we have things like variable rates and fees targeted at those who create the biggest risk to the issuer.

If this isn’t middle ground I don’t know what is.

#13 Poly43 on 01.19.10 at 6:05 pm

Poly: From a Wells Fargo card offer preying on kids.

cos: Wrong again poly. “Kids” cannot legally obtain credit cards…

…The terms that poly posted for the Wells Fargo card seem to me very much the middle ground.

Eighteen year old kids leaving the comforts of home for the first time, most with no job, AND a credit card from a predator, are just that cos…..KIDS. And if you for even ONE second think the terms listed in post number 6 of this thread are “MIDDLE GROUND”, then I only have one question for you.

Is your stagecoach cubicle wall 42 inches high or 54?

#14 Poly43 on 01.19.10 at 6:27 pm

And it costs a fortune.

~l3wis

That is an understatement l3wis. Someone I know has/had cancer. Agressive chemo followed for several months. One pill that was absolutely needed, EACH DAY, was an anti nausea pill. About the size of an Aleeve Gel tablet. Cost? $500.

Chemo is extremely hard on the immune system. Every two weeks a cocktail, about two ounces worth, was needed to rebolster the white blood cell count. The cost of that two ounce cocktail? $5000.

#15 Costner on 01.20.10 at 7:05 am

Poly: Is your stagecoach cubicle wall 42 inches high or 54?

Wrong again poly – but don’t let that stop you from resorting to the continual straw man argument.

I tell you what – if you think you can do a better job of offering credit to those who have zero credit history, but all means start your own credit card company and offer 5% APR cards to anyone and everyone who applies. Don’t charge any fees if they go over their limits and don’t charge anything for cash advances or late payments.

Unfortunately for you – the real world will result in your new company going broke in about 12 days.

Of course don’t bother to ask yourself why these ADULTS (yes that is the term for anyone who is 18 years old or older) are legally allowed to die for their nation, can enter into legally binding agreements and contracts, can make their own decisions without having to seek a second approval from anyone else, and who can do things like play the lottery… should not be able to obtain credit if THEY make the decision to seek it.

I haven’t heard any stories about Citibank, Wells Fargo, US Bank, BOA, or even First Premier every forcing ANYONE to sign up for much less use one of their cards. It is still a free country – and if you don’t want to use a product, nobody is telling you otherwise. Why should you get to decide what is best for the other 330,000,000 Americans?

I remember getting my first credit card years ago when I was at SDSU my freshmen year of college. I can’t tell you the terms but I’m sure they weren’t stellar… but I can tell you the world did not end, and the bank who issued me the card allowed me to start building a credit history which to this day remains flawless. I consider what they did for me a favor – and they never put a gun to my head to make me sign up for or use their card.

I guess that is the difference between you and me poly. I can take care of myself and make my own decisions whereas you feel others are incapable of taking care of themselves (once again showing your disregard for the concept of personal responsibility).

#16 Poly43 on 01.20.10 at 10:39 am

Don’t need a lecture from you about personal responsibility cos. Personal responsibility has put me where I am right now. Posting from my personal computer on my personal time at my personal convenience. How bout you cos?

#17 Costner on 01.20.10 at 11:52 am

poly: How bout you cos?

Oh back to that old playbook huh? Yet another red herring and ad hominem arugment because you can’t debate the points at hand.

First you accuse me of being an employee of a bank, and now you are suggesting I’m posting from a work computer on work time? Whats next poly – are you going to accuse me of being a city employee (oh wait – you’ve done that before too).

Nice try poly, but as I’ve told you in the past what I do and how I do it is none of your damn business. No matter what I say you have some lame excuse why that somehow invalidates my viewpoint… even though I’ve told you in the past you seem to disregard it. That is the utter definition of a logical fallacy, and until you determine how to construct a meaningful retort – you are adding nothing to the discussion.

That’s what I thought.

#18 Poly43 on 01.20.10 at 12:33 pm

Geez cos. Don’t get your panties in such a wad. I say the terms outlined in post six are predatory. You say they are middle ground. I say you’re posting on your employers time and ‘puter while barking about PERSONAL RESPONSIBILTY. You say otherwise. We both know better on that one….much better.

That’s what I thought.

#19 Costner on 01.20.10 at 1:35 pm

Actaully you would be wrong… again. Just as your latest round of assumptions were wrong, your assumptions before that were as equally wrong. Keep banging that logical fallacy drum though – it never gets old.

You have a lot to learn about personal responsibility however.

But don’t let that derail the actual issue here. You seem to think a credit card with no annual fee and a APR ranging from 11.65% to 21.65% which is available to those with little to no credit history is predatory. So what isn’t predatory in your world poly? Should all banks issues cards to anyone and everyone at 10% APR and no fees? 8%? 6%? Should they allow people to pay whenever they wish with no penalty for late payments? Should they allow people to charge as much as they wish with no penalty for over the limit transactions?

What is the magical formula that in your eyes makes a card acceptable to issue to those persons who have little to no credit history to determine their ability to pay?

You seem to have all the answers… so lets hear it.

#20 Poly43 on 01.20.10 at 3:01 pm

You seem to have all the answers… so lets hear it.

~cos

Well…here’s a good place to start cos. Make issuers, like WELLS FARGO, offer credit the old fashioned way. What’s wrong with using sound underwriting principles based on the ability of college kids to be able to pay back? In other words, make sure that 18 year old kid is not overextended financially by taking on more debt. Your goal is to maximize profits, regardless of the social and environmental costs. That is just wrong on so many levels cos. Why not a business model like this one: Turn a profit by creating a sustainable relationship between YOU, the issuer, and that college kid. Not a damned thing wrong with SERVING THE PUBLIC INTEREST.

When issuing credit cards to an 18 year old college kid, issuers, like WELLS FARGO, should have to obtain the signature of the kids parent or guardian. YOU can also MAKE A HALF ASS EFFORT to see if that kid has a job to pay credit card charges.

But there’s no real profit in that is there cos.

That’s what I thought.

Meanwhile, for WELLS FARGO, it’s business as usual.

http://www.bloomberg.com/apps/news?pid=20601087&sid=awlcvwc.dpdM

http://www.nypost.com/p/news/business/wells_ceo_gets_stock_bonus_lPkCUWhh5HoJ3Ktp6aSKuL

#21 Costner on 01.21.10 at 8:12 am

Poly: What’s wrong with using sound underwriting principles based on the ability of college kids to be able to pay back?

Banks already do that poly. I know you would have us believe otherwise, but a bank doesn’t want a customer who can’t pay back their debts. Sure they might make a few bucks from fees in the beginning when that person misses a payment here or there, but soon that person will default on their debt and that means a writeoff for the bank. They might make $100 on fees and lose $6000 on bad debt… that doesn’t make financial sense.

Perhaps in your fantasy world companies are just evil, but in the real world companies exist to make money and to turn a profit. No publicly traded company can afford to lose money or even break even as nobody would ever be willing to buy that stock and they would be bankrupt.

You might not like it, but thats how it works and nobody is forcing anyone to use their products or services, so get over it. It isn’t like there isn’t competition in the credit card marketplace… there are literally thousands of banks issuing cards – so why do you think none of them follow your magical business model? Answer: because they would be broke within weeks!

Poly: When issuing credit cards to an 18 year old college kid, issuers, like WELLS FARGO, should have to obtain the signature of the kids parent or guardian.

That is the dumbest thing you have said yet… and you’ve said some pretty dumb crap. You want an ADULT (again I remind you an 18 year old is an adult) to have to seek signatures of his or her parent or guardian?

Why draw the line at 18 – maybe there are some 22 year olds who can’t make their own decisions. Maybe some 40 year olds need some help too. Heck, maybe some retired folks who claim to have all the answers but have never owned or ran their own business should have to have somenoe else sign for them to allow them to obtain credit. Would that work out ok for you poly?

Talk about big brother and hand holding. That isn’t the world I want to live in.

If you want to start a bank or credit card company that doesn’t earn a profit by all means have at it. However, back here on planet Earth and in the good old USA we operate on capitalism and a free market… so people can and do make their own decisions without you or big brother having to micro-manage every little decision for them. At least so far – it seems to be changing recently.

I remind you again that no bank forces anyone to use their products or services….especially a credit card. Why do you have all this hatred for banks when they are merely offering what is desired? Do they force people to obtain or use their cards? Nope. Do they force people to spend too much? Nope. Do they force people to skip a bill or two? Nope.

As to your links… so what? I imagine Wells Fargo (and other banks) are probably going to raise rates because that legislation that was passed is forcing them to. I said a long time ago that if you restrict how a bank operates they will find other ways to make revenue – and that appears to be the case. I don’t know specifics about how that legislation has impacted the credit card industry but I imagine it made a lot of politicians happy and a lot of consumer advocates happy but in reality won’t do much. Banks aren’t going to issue low APRs and offer low or no fee cards to those who are a credit risk, and if the government tells them they have no options – they will simply not offer credit to those people at all. Who wins then?

Again if you have a card and you don’t like the rate or the bank who issued it…cut the thing up and find a better one. Better yet be like me and never carry a balance – I could care less if my rate is 8% or 50%…since I never carry a balance I never pay one dime in interest. In fact I have a card from Chase in my wallet and I don’t even know what the rate is nor do I care… because I NEVER carry a balance on it.

Wait….is this the part where you accuse me of working for Chase now? I have a Menards card too… so I probably work for them on the weekends right?

For a guy who does so much complaining, you sure don’t have any legitimate solutions. But hey – surely you know all there is about running a business based upon a charity business model because of your vast years of experience operating a business and making payroll right?

That’s what I thought.

#22 owk on 01.21.10 at 4:19 pm

Excellent reply Costner. I’ve talked with a person who was mad as hell that her 18 yr old daughter who has no credit history was denied for a credit card. I suggested she put her daughter on her card to help build credit. She completely refused the idea and remained upset over the fact her daughter was denied. I tried to explain the risk of giving an unsecured line of credit to someone w/no credit history. She still did not get it, so for some there is no help no matter how much logic you have on your side.

I’ve already tried to get Poly to start his own business, even gave him an idea, and he refuses. It’s easier to be an armchair quarterback and tell others how it should be.