You all know the drill – your mailbox is full of “pre-approved, no interest” credit card offers, your phone is smoking from all of the telemarketers who are eagerly telling you about their latest and greatest credit card offer, and the inbox to your e-mail program has more spam than the Hudson River has toxic waste.
More often than not, the claims are so ridiculous that you don’t even bother reading them, but every once in a while, you’ll get an offer for a credit card that actually sounds promising. Perhaps it’s a clever rewards program, or an enticing interest rate – but be forewarned, most of these special offers come with consequences.
“Read the fine print,” is often the popular tag line to most credit card ads, offers and commercials. But, there’s often so much to that fine print that consumers become confused, frustrated and eventually, complacent with the credit card company’s terms and conditions. And so begins the delicate dance that we often refer to as, “the charge card cha-cha”.
What Do Microsoft, Visa, MasterCard & Wal-Mart Have In Common?
Don’t think the credit card industry is crooked? Think they’re honestly interested in your well-being? Were you aware of the antitrust suit that exists against VISA and MasterCard, as brought on by the Department of Justice?
The DOJ introduced a case against credit card powerhouses VISA and MasterCard just a few years ago. The DOJ contends that VISA and MasterCard have knowingly and willingly created and maintained a “duopoly”, doing their best to prevent competition amongst themselves. In addition, the DOJ contends that the two have prevented thousands of banks and retailers from accepting the cards of competitors like American Express and Discover.
The DOJ further claims that efforts by Visa and MasterCard have caused the USA to fall more than 10 years behind Europe in the use of “smart cards”. Smart cards are computer chip enabled cards that store data, allowing users to make purchases and securely manage personal data in a variety of ways – all from a single card.
Attorneys from the DOJ allege that Visa and MasterCard had determined the smart cards would be too expensive to develop, and worked to stifle their development in the US market. Visa and MasterCard claim that no one in the US is interested in smart cards.
In addition to the antitrust suit that’s still pending against Visa and MasterCard, there is a second lawsuit pending from retail giant, Wal-Mart. Wal-Mart (and 18 other major retailers) claim Visa and MasterCard force them to accept debit cards. The debit cards often carry higher fees associated with processing the cards, and the retailers don’t like having to pay the higher fees. These costs, are in turn, passed on to consumers, which is why another lawsuit is in the works – this time from three individual New York residents who are claiming that it’s unfair to pass those costs on to consumers.
If it’s not yet obvious why we call all of this credit card nonsense “the charge card cha-cha,” you might want to go re-read the past few paragraphs again.
Visa & MasterCard: Looking forward to your interest.
Interest rates are how the credit card companies make their money, and according to recent figures, they’re making a lot of money…over $21 billion was earned in interest charges in the year 2000 alone.
Interest rates are often used to entice consumers into enrolling for a particular credit card – promises of “low introductory rates” that are often sub-prime (0%, 0.9%, 1.9%, 2.9%) get interest-laden credit card holders to quickly sign-up with a new card. However, those rates are often extremely temporary – some cards charge as much as 31.99% when the introductory interest schedule expires.
Consumers quickly became aware of this near-bait-and-switch routine, so credit card issuers went back to the drawing board in an effort to attract new customers (incidentally, the average cost for a credit card company to acquire a new customer is around $80 per cardholder).
The next logical step: credit card rewards! Use your card to buy everyday items, and they’ll give you something in return.
Credit card rewards programs are often more difficult to translate and comprehend than the interest rate debacle. The 30-second TV ad promises that within a few months, you and your loved ones will be vacationing at exotic locations – free of charge – just for using your VISA card. Other ads promise cash back, or rebates on big purchase items like cars; is it too good to be true? Usually.
Let’s take a look at a few of the more popular rewards programs – BMW Financial Services (BMWFS) offers rewards programs designed specifically for BMW drivers such as rebates on future loans or leases, additional mileage on lease allowances, or a variety of BMW merchandise.
General Motors offers the GM card, which promises rewards that are similar to the BMW card. Ford Motor Company, Subaru, and many other manufacturers also have programs similar to BMW and GM, but for this article, we’ll focus on BMW and GM’s programs.
Other credit card rewards programs such as the Shell MasterCard promise users free gasoline with every purchase, while other cards like the “Saturn Card” provide Saturn owners with the opportunity to finance Saturn goods and services under more favorable terms and conditions.
Let’s dive in to these cards and compare the pros and cons. Beware – we had to perform an exhaustive search, print hundreds of pages of paper and call all of the barely-legible phone numbers to get the skinny on these cards. We strongly suggest you do the same before jumping in to a credit card program. It pays to read the fine print, and it pays to do the research.
BMW VISA: Sinfully confusing and unrewarding.
BMWFS claims that by signing up for their “No Annual Fee BMW Platinum Visa Card” users will be able to easily accumulate rewards points. They further claim that there’s “no annual fee” and that with your points, you’ll be driving a new BMW for pennies on the dollar thanks to your smart shopping and charging habits.
Now for the fine print:
– Yes, the card is truly “annual fee free”, however, if you want to claim your BMW rewards points, you have to PAY an annual fee of $50 for the BMW Rewards Package.
– Yes, you do earn rewards points good toward the purchase of a new BMW vehicle, however, in order to claim the maximum $5,000 rebate, you’d need to spend $500,000 on your BMW card first. Points are earned at a rate of approximately 1% – spend $10,000 on your card, earn $100 in rebates. Not the best rate of return on an investment. $10,000 in a modest savings account would net four times the return.
– Yes, you can earn mileage credit, but in order to get an extra $1,000 worth of mileage credit, you’d need to spend $25,000 to earn the 25,000 points. For $25,000, chances are you could pay off the remaining lease monies.
– Spend $15,000 and BMWFS will give you a $100 credit toward their BMW merchandise including apparel and accessories. If you’ve ever seen “The Jerk” with Steve Martin, you’ll know that this is “a profit deal” – they “take in $15 and give away 50 cents worth of crap” (quoting Frosty from The Jerk).
– Spend $12,500 and BMWFS will send you a check for $100 worth of maintenance work. Now, you’re earning less than 1% for each dollar you spend, just like if you were to use your points to buy their merchandise (see above).
– BMWFS goes to great lengths to list 10 “benefits” of their Travel and Emergency Assistance program, but here’s where the fine print really becomes important. The services are nothing more than “concierge” services. In other words, if you thought that the bold-faced title “MEDICAL REFERRAL ASSISTANCE” would help you with your medical problems while on vacation, you guessed wrong. BMWFS will simply give you a list of medical facilities in the surrounding area.
– In fact, most of the 10 “services” could easily be obtained with a 30-second search of the yellow pages or the internet.
What about the stuff that really matters – the late fees, the service charges, and so on? Well, things don’t get much better. Here’s the skinny on what happens once the honeymoon is over and BMWFS has you in their clutches:
– Maximum reward rate: 1% of each dollar spent (1 point for every dollar). Winner: GM by 400%.
– 10.25% APR (this is a best case rate; your rate may be higher contingent upon your credit rating, history, risk, etc). Winner: GM
– Cash advances: 12.25% APR (as of 12/3/02) plus a 2.5% or $5.00 advance fee, whichever is greater. Winner: Tie – depends on the APR you receive from GM.
– Annual fee: No annual fee, UNLESS you want to use the rewards. Enrolling in the rewards program carries an annual fee of $50. Winner: GM.
– Late payment: $29, over-the-limit-fee: $29, returned payment: $29, copies of old receipts/slips: $5 each + $15 document delivery fee. Winner: Tie.
So, as you can see, the card isn’t all that it’s made out to be. Earning less than 1% in rewards for every dollar spent is not what we’d consider to be a smart financial move. And, these few pages of information only scratch the surface of what is and what isn’t covered or provided as a part of the BMWFS Visa – we printed more than 30 pages of “fine print” associated with the card and its programs. Hope you like reading legal disclaimers!
GM MASTERCARD: Satan’s slightly less-evil cousin.
GM’s program isn’t much better, but it is more forthcoming with its pros and cons. It clearly outlines the program benefits with only a few pages of information, and the rewards program is much more advantageous. Let’s take a quick look:
– 5% reward earned on every dollar spent with the GM credit card; rewards expire after 8 years. Winner: GM
– 5% reward on the first two balance transfers from another card; rewards do not accrue on cash advances. Winner: GM
– Annual Membership fee: $0, no fee to redeem awards. Winner: GM
– 9.99%, 13.49%, 15.49% (as of 4/1/03) APR, depending on your credit rating, history, risk and limit. Winner: GM, slightly.
– Cash advances: Normal APR applies, plus 3% advance fee. Winner: Tie – depends on the APR you get.
– Late payment: $29, over-the-limit-fee: $29, returned payment: $29. Winner: Tie.
GM rewards are redeemable in varying amounts; some vehicle lines are eligible for up to $3500 worth of rewards, while others are only redeemable for $1000.
THE FINAL WORD
While no one should start using their credit card with the hope of driving a free vehicle or “earning” enough rewards to buy gasoline for a number of months, the cards can be advantageous if you use them (and pay them off) on a regular basis. However, at the rate that they dole out points, we believe you’d be better off investing a few bucks here and there in a savings account or a short-term fund.
Finally, have you ever wondered where all of that spam comes from in your e-mail box? You might want to call your credit card company and request that they stop sharing your personal information with others, including:
– shopping and buying habits
– personal identifiers such as: credit history, address, phone number(s), e-mail address, occupation, and household income
– hobbies and interests (as gauged from purchases)
There’s big money in selling and renting information about you and your spending habits, and the credit card companies make certain they’re reaping the benefits of your personal data.
Not only do the financial institutions make money from your spending volume (2002 charge volume was $1.4 trillion), they also make money by sharing your personal details with anyone willing to write them a check. Big brother has nothing on the credit card companies – perhaps the popular “What’s in your wallet?” slogan should be changed to, “Who’s in your wallet?”
A Quick Note From Our Founder –
Over the past few years I’ve taken a very special interest in helping people reduce the amount of inflammation in their bodies. Please take a moment to read Thomas DeLauer’s incredible story and how he was able to completely rid his body of dangerous inflammation.
Proline Expert Thomas DeLauer’s 7-Day
Inflammation is holding us back in so many ways, and no one is really explaining it to us. All we know is that it’s “bad,” but no one wants to tell us about how it’s keeping us from losing weight and how it’s making us feel like garbage. Mainly because the food lobbyists don’t want us to dip into their profits when we find out that inflammation is caused by most of the so-called healthy foods that we are eating now!
IMPORTANT: My results are not typical. As with any weight loss program, your results may vary greatly.
When I was 275lbs and struggling with my weight, the last thing that I thought about was inflammation causing my problems… I had always resorted to the basics… simple calories in vs. calories out to lose weight, BUT that was NOT the case here. There was something bigger at play because I was literally doing everything that I was ‘supposed’ to do.
Meanwhile, my wife was diagnosed with an auto-immune disease that effected her thyroid (hashimoto’s) and later, Lyme disease. It was the serendipitous timing of this that made me realize that inflammation might be playing a larger role then I had thought. I’m sure many of you have heard of these diseases, and the scary thing is that they can be affecting you and you might not even know it!
To make a very long story short, I began learning about inflammation, using my resources within the healthcare industry to dive into some heavy research on how inflammation works and how it could be holding my wife and I (and others) from living the lives that we wanted to live. Like so many others, it’s easy to not even realize you’re being held back.
I found that inflammation can cause all kinds of issues in the digestive tract making it so that you’re not absorbing nutrients. This was a HUGE step, because I WAS eating healthy, but I couldn’t lose weight at all! So when I realized that there were specific “health foods” that I was eating that were causing this to happen, it all made sense….
read more: Learn what these health foods are
If you’re not absorbing nutrients, then you body goes into starvation mode and that means that you will store fat! It’s a simple survival mechanism! This was the code that needed to be cracked! I needed to find a way to reduce the activity of the COX-1 enzyme and the production of prostaglandins (a fancy way of saying ‘how inflammation is caused”)
But the difficulty was finding a way to rid my body of the inflammation so that I could begin absorbing nutrients again. And back then, this was a long drawn out process, simply because the science wasn’t really there at the time. Most of us don’t really have the time or the energy to devote to experimenting with different foods to find what works for them.
Well, I did reduce my inflammation, and I was able to get back on track and ultimately become on author on this very topic, but it took a lot of time.
So over the past six months, using my experiences and my research I have developed a way to reduce inflammation within the body and to help the body absorb nutrients again, all with a WHOLE FOODS approach. As someone that has been in the healthcare industry before, I wanted to make sure this was a down-to-earth way to reduce inflammation.
Anyhow, it has been awesome to see how many people have been having success and not just reducing inflammation, but truly losing weight and kick starting their new lives feeling utterly amazing!
I want to invite you to take a look at the full protocol and the actual program and steps that you need to take right here
Just seeing some of the pain being lifted from people and seeing them realize what had been causing them so much grief before…
IMPORTANT: Results are not typical. As with any weight loss program, your results may vary greatly.
IMPORTANT: Results are not typical. As with any weight loss program, your results may vary greatly.
Anyhow, you’ve all been so good to me by watching my videos and reading my articles, I thought that this would be a great special opportunity for you to get this reboot system, so head on over and check it out here.