MCViewPoint

Opinion from a Libertarian ViewPoint

Posts Tagged ‘credit card’

Credit Card Late Fees

Posted by M. C. on February 23, 2023

What about that present upper bound of $41? Was that given down to mankind on tablets of stone? No. That, too, originated from our friendly central planners in the booty-seeking capital of the country. How would this fee be determined under the free enterprise system? Simple:

Luis Rivera

By Walter E. Block

https://open.substack.com/pub/walterblock/p/credit-card-late-fees?utm_source=share&utm_medium=android

The U.S. Consumer Financial Protection Bureau, no bureaucrats they, rather public-spirited civil servants, are proposing a new regulation: credit card late fees, which can now reach a maximum of $41, will be capped at a mere $8.

One would think, based on this new initiative, that the reason we have late fees for credit card non or late payments in the first place is out of sheer meanness and profiteering. That would appear to be the level of understanding enjoyed by the promulgators of this new directive.

If you thought that, you’d be right. According to Rohit Chopra, CFPB director, excessive fees such as $41, serve “no purpose beyond padding the credit card companies’ profits.” And in the view of Aaron Klein, senior fellow in economic studies at the Brookings Institution: “The rule brings to the forefront the reality that credit card late fees are designed to be excessive to create incentives for consumer behavior. They are not in proportion to the cost to the lender…”

Let’s hold on for a second. Suppose, to take the extreme case (often, it is easier to see economics in action when you do so: it is easier to see the mountain rather than the molehill) the new dictat mandated no late fees at all. What would be the effect of that? Obviously, poor people and those without good credit ratings at all, would be charged very high rates of interest for the borrowing that they do, in effect, between the time of their purchases and when their credit card payments are due. But suppose, further, that our masters in Washington DC precluded that option (they would call it usury, ignoring the fact that the high rates of interest would emanate from their foreclosure of late fees in our hypothetical example). What, then, would be the result? Why, those who are presumed by the CFPB to be the beneficiaries of their largesse, the poor and those with bad credit ratings, would not be able to enjoy the benefits of credit cards at all (unless of course, the government granted these to them in an entirely new and very costly program).

Now that we have seen the effects of no penalties at all, it is easy to discern the results of reducing the upper limit from $41 to $8: moves in this malevolent direction. The impecunious will not be entirely bereft of credit cards, although some will. Most such people will either be charged higher rates of interest and/or find it more difficult to initially obtain and then retain their cards, and almost certainly be subject to lower limits on how much they may spend initially.

What about that present upper bound of $41? Was that given down to mankind on tablets of stone? No. That, too, originated from our friendly central planners in the booty-seeking capital of the country. How would this fee be determined under the free enterprise system? Simple: different credit card companies would charge different combinations of interest charges and late fees to their clients. The competitive process would tend to ensure that the amalgamation that came closest to maximizing consumer welfare would be approached. Too high, and the company would lose customers. Too low, and they would court bankruptcy.

Originally published here.

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Your Credit Card is at Risk because of this hacking device!

Posted by M. C. on December 10, 2022

This a real thing. It happened at our local fair.

I used to use sleeves. Now I use RFID blocking wallets.

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Your Credit Card is Spying on You!

Posted by M. C. on September 29, 2022

Each time we opt to pay with plastic, our data is shared by our banks, the card network, the store, the point of sale system, the retailer’s bank, our financial apps. And then all those entities share it with thousands more.

Do you think about that when the person in front of you at the wine shop uses card to pay for a full shopping cart? Don’t be fooled by PayPal style privacy claims.

Cash is king and that is why there is a war on cash.

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Pennsylvania’s Contribution to the Wars On Cash and Your Liberty

Posted by M. C. on July 30, 2020

OMG! There is a coin shortage in the PA Liquor Control Board system!
Yes, PA still has “state stores”.
The sign in my local state Wine and Spirits shop tells us due to the coin shortage the cashier will accept only exact change, credit or debit cards. Exact change is not likely, so we are limited to plastic.
Do you ever wonder what happens when you buy with plastic?
There is a digital record of that purchase that is potentially available to anyone. The credit card company certainly maintains a record. Probably the PA LCB also.
Who else might have access to your (liquor) purchasing history? The state insurance commissioner, police agencies, IRS (you betcha!)?
Who could possibly request or purchase this information? Your medical and auto insurance company, your local police, a prospective employer, your employer, the lawyer you are facing in a court case?
A credit card is like having On Star in your pocket. It tells everyone where you have been, whether you were with someone and how you spent your money.
You have no cash on hand and…ATM goes down. Bank had a run and went cafluey. A faceless bureaucrat doesn’t like what you are doing. You crossed a state line with a packet of Sudafed. Your digital money can be shut off with a flick of a switch.
It is all about control.
Think about that when you are putting that Pink Catawba or ammo purchase on a card.
Be seeing you…from Pennsylvania

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Banks, credit card companies explore ways to monitor gun purchases

Posted by M. C. on May 6, 2018

I can’t believe they aren’t already doing this. It would be hard for them not to.The government is already doing this but like anything else the government does, it does a lousy job.

The time has come where banksters have no reservation about making it public.

What else do they track, can they track? Everything purchased with plastic.

http://www.guns.com/2018/05/02/banks-credit-card-companies-explore-ways-to-monitor-gun-purchases/

Banks and credit card companies held informal discussions about identifying transactions involving firearms, The Wall Street Journal reported.

Although the discussions resulted in nothing tangible — and ideas may never come to fruition — ideas tossed would help companies monitor gun purchases, which includes information on buyers, from retailers, the newspaper reported…

 

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