The Robinhood Principle

pittbulll · May 21, 2009, 7:13pm

[quote]dk44 wrote:
I like you Pitbull, but I must disagree with your stance here;

Your son got what he signed up for, everyone knows the dangers of credit cards or should learn about the dangers before they sign, why should I have to subsidize your son’s credit problems?

If I want to take out a personal loan that says “if I pay 1 second late I owe a billion dollars” I would imagine that you would take the stance of, “if he is that stupid to accept that offer and if he is too stupid to not pay on time…oh well his problem.” Am I right or wrong? (By no means am I calling your child stupid, just making a different comparison)[/quote]

Thanks Dk I personally see it different, it is almost impossible to live with out a bank today that is why cash is called the poor mans currency. We disagree.

dk44 · May 21, 2009, 7:27pm

Cool, no prob at all Pitt.

Some more info, just as a FYI.

The bank I work at offers a “free checking” acct. It has no monthly service charge, no minimum balance to keep, and allows unlimited transactions. You have to pay for your checks (to order them) and that is it, free debit card.

You get $400 in overdraft coverage with a fee of $17 for everytime you use the overdraft. I work in collections and basically all day long I have to decide if a fee should be refunded due to bank error or if the fee should stand due to customer error/use. I hear customers complain all the time about fees, and I can’t feel sorry for them at all…they knew what the deal was when they signed the paper. I had a college age kid come in to see me (mostly to bitch) and she went to a gas station to get a soda for around a buck and it threw her acct. in the negative. So that dollar ended up costing her $17 and she was pissed off and was bound and determined to dog cuss me over it. So Pitt I can see how we have different perspectives on this, I literally deal with this all day everyday and I guess I have lost my sympathy for people regarding fees!

So yes, the way the bank makes money off “free” checking accts. is thru fees. But we don’t force the customer to use the service that would generate a fee. If you don’t go into the negative you 100% have a free checking acct. plus debit card from our bank. I don’t see it as preying on the customer if they are given a choice.

pittbulll · May 21, 2009, 7:30pm

[quote]LIFTICVSMAXIMVS wrote:
pittbulll wrote:
If the I overdraw my account it is covered by my credit card for a very minimal charge, if my son overdraws it is also covered by his credit card but it is no minimal charge and for example if he overdraws for $20 and he has ten two dollar charges and one twenty dollar charge they will take pay the $20 charge and ding him 10 overdraft fees. I think they should penalize him but charge him once to cover all the charges or do not cover them at all. The only reason they do this is because they can.

While I agree, my son will learn there are also poor people living from pay check to pay check that will never learn how to avoid these legal robberies… Do some research and you will find free checking and low interest rates are paid for by punitive fees? These fees are not intended to be a disincentive they are essential to the bottom line of checking and credit accounts. I am guilty of using my credit card to rack up points. And when the bank makes it so it is no benefit, I will quit. That is the free market. If you do not need credit do not use it.

Yes, it is called risk distribution. Your CC offers you a service because they find you to be a good risk – i.e., you most likely will not need the service too often and if you do so much the better for them.

I have to ask though, if one is living pay-check to pay-check is it smart to use a CC when it is obvious that the interest rates will make one have even less money to spend next month? Does that not just create a horrible spiral that will require one to keep using it?

This could all be alleviated if banks were expected to only lend money they actually have. Practically none would have CCs.[/quote]

All I hear is people squawking how their interest rate is going to go up and they pay off their credit card every month, I say “quit using your card” ,that is what I will do.

Banks have to stick to their agreements, treat people in a uniform fashion, meaning you penalize people equally for the same infraction

As far as living paycheck to pay check, maybe I would agree with you if there was no such thing as bankruptcy protection and if Banks sent out goons to bust your knees. But today people have to do what they have to do, and I can not condone the banks ripping off the poor because they can. They can not finance all their programs on the backs of the poor

As far as banks lending only money they have we agree on that %100, I think part of the problem is banks expect too much profit, they can loan out $10 for every dollar they have deposited, and they still can not make it go.

pittbulll · May 21, 2009, 7:43pm

[quote]Rockscar wrote:
Another policy that will come out of viewing people as “victims” of big corporations. I’m so tired of irresponsibile behaviors being classified as corporate oppression. Let the fuckers go down! I pay my cards on time, try not to carry balances etc.

It’s not the companies fault, it’s the card users fault.

Credit cards are for emergencies and to build credit. They are not a tool to spend shitloads of money you don’t have, and if you use it as such, it’s just as bad as taking a knife and slitting your own throught.

I’m sorry but These people are not Victims, they are just fiscally irresponsible!!
[/quote]

What I hear is the wealthy and the Banks are claiming the poor are fucking them, I would be more inclined to take your Corp. can do no evil if we didnâ??t have to bail the majority of them out.
If some one is credit worthy, loan them the money. If they are not , donâ??t lend them the money. All money paid that is not principle should be considered interest their should be no fees (with the exception of reasonable late fees). For Debit overdraft one fee for all sequential overdrafts (Bank has option to not cover any, if they want) . The banking system needs to simplify all they do. You should not need a law degree to navigate life.

jawara · May 21, 2009, 8:27pm

[quote]MaximusB wrote:
The banks will always find a way to make their money, regardless of the laws. Basically, you will want to pay cash for everything at this point so you don’t get your ass handed to you in interest. [/quote]

Banks won’t be able to make any money at all if nobody banks with them. I’ve got credit cards and I pay my bills on time but if thet start jacking the rates people like me will start cutting up their cards. The banks will then have no customers.

LIFTICVSMAXIMVS · May 21, 2009, 8:27pm

Pitbull, it sounds to be like to have a moral obligation to quit using the services provided by a bank.

After all, they are evil and fucking poor people over by making too much profit. What other option do you have?

That is a free market solution right there.

jawara · May 21, 2009, 8:38pm

[quote]Rockscar wrote:
Another policy that will come out of viewing people as “victims” of big corporations. I’m so tired of irresponsibile behaviors being classified as corporate oppression. Let the fuckers go down! I pay my cards on time, try not to carry balances etc.

It’s not the companies fault, it’s the card users fault.

Credit cards are for emergencies and to build credit. They are not a tool to spend shitloads of money you don’t have, and if you use it as such, it’s just as bad as taking a knife and slitting your own throught.

I’m sorry but These people are not Victims, they are just fiscally irresponsible!!

[/quote]

You reminded me of the term “predatory lending”. I’m so sick of that crap. Most of the peole who get involved in it buy stupid shit they don’t need from place like Rent-a-Center. Why the hell would you buy a whole living room set up from a place like this? It makes no sense and then when the people that bought the crap can’t pay the claim predatory lending. Here’s a fine example of what I’m talking about: - YouTube

pittbulll · May 21, 2009, 10:45pm

[quote]LIFTICVSMAXIMVS wrote:
Pitbull, it sounds to be like to have a moral obligation to quit using the services provided by a bank.

After all, they are evil and fucking poor people over by making too much profit. What other option do you have?

That is a free market solution right there.[/quote]

If I understand you, it is not a moral obligation; it is a prudent business move for people with good credit. That way the banks will compete with each other for people that need loans, not all people.

Banks are not evil in that sense, but they are fucking over the poor right now to finance an overly competitive market

eric_lacrosse · May 22, 2009, 2:55am

[quote]Beowolf wrote:
LIFTICVSMAXIMVS wrote:
Beowolf wrote:
FYI: Robin Hood stole from the government, not the rich, and gave to the over taxed citizenry, not the poor.

Hmmm…now this is an interesting proposition.

The lines were quite blurred between government and private citizen back then. Only the king was the government…and if you remember the king was away killing Muslims in the ME.

If you remember they all celebrated when the king came home and “restored order”.

I’m going by the story. In the story, the Sheriff of Nottingham taxes the citizens of England into poverty. Robin Hood then steals from the Sheriff and returns the money to the people from which it came.[/quote]

FTW, you no doubt know your Robinhood. It was probably 30 years ago that I read it. I still think my analogy is fairly valid though.

eric_lacrosse · May 22, 2009, 2:49am

[quote]Rockscar wrote:
Another policy that will come out of viewing people as “victims” of big corporations. I’m so tired of irresponsibile behaviors being classified as corporate oppression. Let the fuckers go down! I pay my cards on time, try not to carry balances etc.

It’s not the companies fault, it’s the card users fault.

Credit cards are for emergencies and to build credit. They are not a tool to spend shitloads of money you don’t have, and if you use it as such, it’s just as bad as taking a knife and slitting your own throught.

I’m sorry but These people are not Victims, they are just fiscally irresponsible!!

[/quote]

This is exactly my point. Those of us who are responsible with our finances will now be subsidizing those who are not by the imposition of annual fees that the credit card companies will charge because the government is restricting their ability to penalize those who are irresponsible.

eric_lacrosse · May 22, 2009, 2:54am

[quote]jawara wrote:

You reminded me of the term “predatory lending”. I’m so sick of that crap. Most of the peole who get involved in it buy stupid shit they don’t need from place like Rent-a-Center. Why the hell would you buy a whole living room set up from a place like this? It makes no sense and then when the people that bought the crap can’t pay the claim predatory lending. Here’s a fine example of what I’m talking about: - YouTube

Amen. Unfortunately the current administration was voted into office by people with this victim mentality. No one can be held responsible for the consequences of their own actions, you know, because someone else is always to blame.

Oleena · May 22, 2009, 3:41am

I think everyone missed something important that was mentioned a couple times in the article- this act will force credit to dry up, which will in turn force people to make more responsible money decisions because they wont be able to borrow as much. Also, those who have made irresponsible decisions in the past simply WONT be able to make the same type of decisions in the future because credit card companies are not going to be as likely to loan to high risk buyers.

Making someone pay a high interest rate for their irresponsible spending is only ONE way of dealing with the problem. Simply not lending them any more money solves the problem for good.

You can argue that this slows spending, but that completely misses the point that it slows spending that shouldn’t be happening in the first place because the person really can’t afford it.

This isn’t a take from the rich and give to the poor- it’s a stop giving to the irresponsible in the first place!

Think about it- if you knew that if you missed a payment they would jack up your interest rates, would that be as effect a deterent for not missing it as knowing that they would take away the rest of your line or that you wouldn’t be able to get any other company to loan to you?

tGunslinger · May 22, 2009, 12:59am

[quote]Oleena wrote:
I think everyone missed something important that was mentioned a couple times in the article- this act will force credit to dry up, which will in turn force people to make more responsible money decisions because they wont be able to borrow as much. Also, those who have made irresponsible decisions in the past simply WONT be able to make the same type of decisions in the future because credit card companies are not going to be as likely to loan to high risk buyers.

Making someone pay a high interest rate for their irresponsible spending is only ONE way of dealing with the problem. Simply not lending them any more money solves the problem for good.[/quote]

Drying up credit won’t teach anybody anything. A boy raised in a plastic bubble may be safe, but he hasn’t learned anything about being responsible for himself.

Restricting credit may prevent irresponsible spenders from spending themselves into debt, but it fails to turn irresponsible borrowers into responsible borrowers through experience. In addition, it also punishes responsible spenders by increasing the cost of borrowing.

Finally, it’s as given as the morning’s sun-rise that overall efficiency of the industry will be knocked down a bit whenever the government steps in. Rarely, regulations are worth the loss of efficiency. Usually, they’re not.

Whenever the government tries to protect us from ourselves, we all pay dearly. The “victim mentality” assumes we are all reactive, brainless automatons, and regulations stemming from such a perspective will treat us as such.

[quote]You can argue that this slows spending, but that completely misses the point that it slows spending that shouldn’t be happening in the first place because the person really can’t afford it.

This isn’t a take from the rich and give to the poor- it’s a stop giving to the irresponsible in the first place!

Think about it- if you knew that if you missed a payment they would jack up your interest rates, would that be as effect a deterent for not missing it as knowing that they would take away the rest of your line or that you wouldn’t be able to get any other company to loan to you?[/quote]

Oleena · May 22, 2009, 6:29am

[quote]tGunslinger wrote:
Oleena wrote:
I think everyone missed something important that was mentioned a couple times in the article- this act will force credit to dry up, which will in turn force people to make more responsible money decisions because they wont be able to borrow as much. Also, those who have made irresponsible decisions in the past simply WONT be able to make the same type of decisions in the future because credit card companies are not going to be as likely to loan to high risk buyers.