My Visa Loves Me
I received some really great Christmas presents this year.
They were unexpected, thoughtful, personal…things that make a gift special, that make you feel valued and loved. And even though December is long gone, I just received another unexpected gift. From my credit card, of all people.
I feel a bit badly about this, because I didn’t even send them a card. Honestly, I didn’t know that I meant so much to them. But I must, because they wrote me a “message” on my bill – a far more intimate form of communication than, say, an edict or an announcement.
They just wanted me to know that I was a valued customer. Which is quite touching, actually, because they don’t make much money off of me anymore. I’m one of those annoying people who try really hard to not carry a balance, so I don’t accrue finance charges. We’re called “deadbeats” in the credit industry. I’m pretty sure it’s a term of endearment.
I haven’t always been a deadbeat. I can remember quite clearly my starving student days, the panicky feeling when the credit card bill (or any bill, for that matter) arrived in the mail, wondering how close I was to being maxed out, wondering how I was going to buy food for the next month. I remember years using those credit cards to make ends meet and paying only the minimum payment as I struggled to get on my feet and figure out how to do this thing called life. I remember years of having finances only loosely under control, getting drawn into sign-up schemes and carelessly missing payments.
It’s a costly lesson and one I hope to not ever repeat.
Anyway, they value me so much that they are giving me a gift!
I can skip this month’s payment!
I think that shows how sensitive they really are. They know that the common person probably went a little overboard during the holiday season, and is now maybe a little strapped, and could use a gift like this. See, they really are for the common folk. And here I thought that credit companies were just prowling rabid dogs, frothing at the mouth with an insatiable appetite to prey on the weak, desperate and financially illiterate for the sole purpose of making money and lots of it. Guess I was wrong (again).
One little thing, though. Finance charges will continue to accrue.
Huh.
Guess I missed that redefinition of the word "gift", because I thought a gift was when you gave something to someone without getting anything yourself other than warm fuzzy feelings.
They must mean they want to have a gift exchange, a somewhat different holiday tradition…I give you a little something, you give me a little something.
The all-knowing internet tells me that the average American spent $859.00 on gifts this last year. Add in extra food and drink for entertaining, the new strand of Christmas lights, wrapping paper, cards and stamps and let’s just call it an even grand to make it easier, because I’m not very good at math. So my very rudimentary calculations tell me that with my APR of 11.25% I would pay them about $10.00 for my gift.
Let’s bring this example more in line with reality.
Let’s put the average American who has a credit card with a balance of $5,000 (somewhere in between the $2,000 - $8,000 that I read about) with an APR of 17.59. If she chooses to skip a payment, then she gets to pay $75.00 for the “gift”. If she makes a $250.00 payment to pay down her balance, she’ll pay $70.00. So if she takes advantage of the gift, and skips a payment, the credit card company makes $5.00 extra dollars off of her.
Not bad if you multiply it by oh, let’s say a million people.
So when is a gift not really a gift?
When it’s from your credit card company. Sure, go ahead, miss a payment -but we get to calculate your finance charges on the higher balance you’ll have for the next 31 days. And make 5 million dollars from our generosity.
Well, at least my bank really loves me. I’ll tell you about that tomorrow.