End of Credit Card Rewards? [The Credit Card Competition Act]

[Rothman]

Well, this escalated quickly.

[gonealookin]

There was a warning early on not to make it a partisan political issue.  I don't see it that way anyway.  Nevada's Congressional delegation is five Democrats and one Republican, and the Democrats have indicated skepticism because of how often travel rewards are used on trips to Las Vegas.  I saw a statistic somewhere (don't remember where and have no idea about the validity) that several hundred thousand airline trips to Vegas each year are paid for with rewards points/miles.

[formulanone]

That's not what a bill of attainder is.

Whew, I was suddenly thinking that 99% of our laws over the last 240 years were going to get scrapped because someone might get inconvenienced.

[SectorZ]

I hope this gets challenged in court and gets Durbin expelled from office with a lifetime ban from ever holding any other position in office.

Which part of the bill is challengeable, and how is contributing to a bill that gets rejected by the courts (which happens all the time) worthy of expulsion?

This bill is a blatant violation of the Bill of Attainder clause, since it specifically targets the credit card companies.

[rm rant about individual politician -S.]

It would be a bill of attainder if they targeted a SINGLE credit card company.

[SP Cook]

No, no it wouldn't.  A "bill of attainder" is a part of the criminal law.  It is where a legislature, in this case the Congress, declares that some past act was criminal and then retroactively punishes the individual for the act that was legal at the time he committed it.

This is a discussion of banking regulations, which are a part of the civil law. 

The clause has no application whatsoever to this discussion.

Basic civics.  What a concept.

[CtrlAltDel]

Basic civics.  What a concept.

Have you ever found anyone, besides yourself of course, to be wrong or mistaken about something without meriting some degree of derision?

[HighwayStar]

strictly speaking, if you get a problem with  a credit (not a debit) card, you don't loose anything. You may loose an option for easy purchase, but ...

This is the fact that seems to be escaping people.

For example, let's say you're on a road trip and relying on your credit card.  Unbeknownst to you, the Phillips 66 pump you fill up at in Lubbock has a card skimmer.  Four days later, you're checking your account while waiting for your lunch order at a Love's/Wendy's truck stop in Cheyenne, and you notice two fraudulent gas purchases at the Lubbock Phillips 66 station;  you weren't even in Texas anymore when you supposedly purchased those tanks of gas.  So you contact your credit card company to report the fraud, and they lock your card so they can investigate.  You finish your Baconator, go back outside, and pull up to the pump.  Now how do you pay?

I just pull out another credit card 

Let me pose an alternate quandary to you. You are on a road trip, and have serious transmission issues. You find a shop that can do the work, but its $3k. You are carrying $1k in cash for this trip because that should have been enough. Now what do you do? Hope you have a branch bank to get more cash? Possible, but you better have accounts with the top 5 largest banks and keep a total of $15k in them to be sure you have that branch nearby.
Or.
Just put it on the card?

[kkt]

You seem to have mixed up a "bill of attainder" with an "ex post facto law".

Bills of Attainder declares a person or group of persons' life and property forfeit without benefit of trial: from https://constitution.congress.gov/browse/essay/artI-S9-C3-1/ALDE_00013186/

The bill of attainder, a parliamentary act sentencing to death one or more specific persons, was a device often resorted to in sixteenth, seventeenth and eighteenth century England for dealing with persons who had attempted, or threatened to attempt, to overthrow the government.

A bill of attainder also resulted in forfeiture of the target's property, including the right of the person's heirs to inherit it. Id. (In addition to the death sentence, attainder generally carried with it a 'corruption of blood,' which meant that the attainted party's heirs could not inherit his property.).

An Ex Post Facto Law would make a law against actions that were legal at the time they were done illegal, but does not convict them without a trial:
from https://constitution.congress.gov/browse/essay/artI-S9-C3-3-3/ALDE_00013193/['ex',%20'post',%20'facto',%20'law']

As the phrase ex post facto (after the fact) suggests, the Ex Post Facto Clauses apply only to legislation that imposes or increases a punishment retroactively.

[ZLoth]

Let me pose an alternate quandary to you. You are on a road trip, and have serious transmission issues. You find a shop that can do the work, but its $3k. You are carrying $1k in cash for this trip because that should have been enough. Now what do you do? Hope you have a branch bank to get more cash? Possible, but you better have accounts with the top 5 largest banks and keep a total of $15k in them to be sure you have that branch nearby.
Or.
Just put it on the card?

Actually, many credit unions have CO-OP Shared Branch Network which allows you to conduct banking services outside of your home area. But, that may not be possible if you break down in some small towns. Of course, at that point, I may be pulling out my auto membership for that free 200 mile tow to a more populated area with better repair selections.

[kphoger]

Let me pose an alternate quandary to you. You are on a road trip, and have serious transmission issues. You find a shop that can do the work, but its $3k. You are carrying $1k in cash for this trip because that should have been enough. Now what do you do? Hope you have a branch bank to get more cash? Possible, but you better have accounts with the top 5 largest banks and keep a total of $15k in them to be sure you have that branch nearby.
Or.
Just put it on the card?

I'm not suggesting that it's wise to not carry a credit card at all.  (My wife and I got rid of our only credit card a few years ago, but that was for other reasons not pertinent to the argument.)  I'm suggesting that I prefer using cash as primary currency and plastic as backup, not the other way around.

So, in your scenario, I would use the credit card to pay for repairs.  But I would have used cash for the 65 other transactions conducted on that road trip.

FYI, your hypothetical scenario was actually a real-life situation for me several years ago.  When my friend's front wheel bearing broke in the middle of the Mexican desert one year, some of our group went to the AutoZone in Saltillo to buy a new one.  On our mission trips to Mexico, I use cash exclusively for the entire trip, and I did not have enough MXN$ on hand to cover the cost of a new wheel bearing.  So we called our bank's customer service department while driving to Saltillo, to make sure the international purchase wouldn't red-flag our card, then we paid for the part on plastic.

The only other time I've had a breakdown on a road trip—north of Naturita, CO—we were actually using plastic for travel expenses to begin with (not my preferred way of doing things, but we decided to try it out on that trip.)  In that case, we not only had to pay a mechanic, but a couple of nights in a hotel as well.

[hbelkins]

You seem to have mixed up a "bill of attainder" with an "ex post facto law".

Bills of Attainder declares a person or group of persons' life and property forfeit without benefit of trial: from https://constitution.congress.gov/browse/essay/artI-S9-C3-1/ALDE_00013186/

The bill of attainder, a parliamentary act sentencing to death one or more specific persons, was a device often resorted to in sixteenth, seventeenth and eighteenth century England for dealing with persons who had attempted, or threatened to attempt, to overthrow the government.

A bill of attainder also resulted in forfeiture of the target's property, including the right of the person's heirs to inherit it. Id. (In addition to the death sentence, attainder generally carried with it a 'corruption of blood,' which meant that the attainted party's heirs could not inherit his property.).

An Ex Post Facto Law would make a law against actions that were legal at the time they were done illegal, but does not convict them without a trial:
from https://constitution.congress.gov/browse/essay/artI-S9-C3-3-3/ALDE_00013193/['ex',%20'post',%20'facto',%20'law']

As the phrase ex post facto (after the fact) suggests, the Ex Post Facto Clauses apply only to legislation that imposes or increases a punishment retroactively.

That was my thought; that Pink Jazz was confusing Bill of Attainder with Ex Post Facto.

Or maybe he thinks that ending credit card rewards programs would be a type of bill of attainder because it would take away any accumulated rewards points.

[Rothman]

Let me pose an alternate quandary to you. You are on a road trip, and have serious transmission issues. You find a shop that can do the work, but its $3k. You are carrying $1k in cash for this trip because that should have been enough. Now what do you do? Hope you have a branch bank to get more cash? Possible, but you better have accounts with the top 5 largest banks and keep a total of $15k in them to be sure you have that branch nearby.
Or.
Just put it on the card?

Actually, many credit unions have CO-OP Shared Branch Network which allows you to conduct banking services outside of your home area. But, that may not be possible if you break down in some small towns. Of course, at that point, I may be pulling out my auto membership for that free 200 mile tow to a more populated area with better repair selections.

Heh.  That reminds me of my old credit union which boasted that it was part of a national ATM network that meant it could be used for free...

...except they didn't bother to tell me that just pertained to the credit union not charging an additional fee.  Other banks and the other ATM owners?  Yep.

[HighwayStar]

I'm not suggesting that it's wise to not carry a credit card at all.  (My wife and I got rid of our only credit card a few years ago, but that was for other reasons not pertinent to the argument.)  I'm suggesting that I prefer using cash as primary currency and plastic as backup, not the other way around.

So, in your scenario, I would use the credit card to pay for repairs.  But I would have used cash for the 65 other transactions conducted on that road trip.

FYI, your hypothetical scenario was actually a real-life situation for me several years ago.  When my friend's front wheel bearing broke in the middle of the Mexican desert one year, some of our group went to the AutoZone in Saltillo to buy a new one.  On our mission trips to Mexico, I use cash exclusively for the entire trip, and I did not have enough MXN$ on hand to cover the cost of a new wheel bearing.  So we called our bank's customer service department while driving to Saltillo, to make sure the international purchase wouldn't red-flag our card, then we paid for the part on plastic.

The only other time I've had a breakdown on a road trip—north of Naturita, CO—we were actually using plastic for travel expenses to begin with (not my preferred way of doing things, but we decided to try it out on that trip.)  In that case, we not only had to pay a mechanic, but a couple of nights in a hotel as well.

So make the other 65 transactions less convenient, significantly harder to track, and pay an additional 3-4% over what you otherwise would? To each their own, but if I am already carrying the card I would do that in a heartbeat. I reverse the setup and carry the cash as an emergency fund in case some place cannot take the credit card.

[Scott5114]

It's pretty easy to track your cash transactions. You look in your wallet and when the money isn't there that means you spent it.

If you're trying to keep a catalog of all of the transactions and categorize them and find out exactly how much you spent on each category, you're a nerd.

[Rothman]

It's pretty easy to track your cash transactions. You look in your wallet and when the money isn't there that means you spent it.

...or someone took it.

If you're trying to keep a catalog of all of the transactions and categorize them and find out exactly how much you spent on each category, you're a nerd.

Yeah, tedious categorization is overkill, but keeping track of what you're spending and on what is just sound personal financial management.

[SectorZ]

If you're trying to keep a catalog of all of the transactions and categorize them and find out exactly how much you spent on each category, you're a nerd.

You would consider me the King of the nerds if you knew how I kept track of stuff.

Besides, don't you run a small biz? Don't tell me you don't micromanage every little transaction out of necessity as well.

[gonealookin]

If you're trying to keep a catalog of all of the transactions and categorize them and find out exactly how much you spent on each category, you're a nerd.

Yeah, tedious categorization is overkill, but keeping track of what you're spending and on what is just sound personal financial management.

I'm probably similar to SectorZ.  Personal finance software makes this pretty easy.  I use Moneydance, and every transaction gets categorized.  I don't take a supermarket receipt and try to separate the laundry detergent from the food, it's all categorized as "groceries", but I do have a good handle on how much I'm spending, and on what; a couple clicks in Moneydance at the end of the month produces a nice list.

On the cash vs. cards debate:  some people just should not use credit cards at all, if they have issues with self-discipline on spending.  Buying things one can't quite afford, and then digging themselves a further hole by having to pay 19.99% interest on those purchases, is just a terrible way to manage one's financial life.  For them, telling them they would be better off using a credit card is like offering drinks to a recovering alcoholic.

Fortunately I've never had that issue.  I just got back from a 12-day road trip, and the only cash I used the entire time was the $5 bills I leave on the bed for the housekeeper when I'm staying multiple nights in a hotel.

[HighwayStar]

If you're trying to keep a catalog of all of the transactions and categorize them and find out exactly how much you spent on each category, you're a nerd.

You would consider me the King of the nerds if you knew how I kept track of stuff.

Besides, don't you run a small biz? Don't tell me you don't micromanage every little transaction out of necessity as well.

It was nerdy to do it when it required tediously entering every receipt. Now that it can be done virtually automatically its simply good financial management.
Also for certain things, like say trips, costs might be shared by several people. I did a trip a couple years ago like that. With everything on the card it was easy to split it after the trip was over.

[kalvado]

Not on a nerdy level, but Chase gives you some spending breakdown for a credit card at the end of the year. Doesn't take any effort beyond clicking "here is your breakdown" link.
Of course it doesn't separate fruit and veggies from household items or unhealthy stuff in grocery recipes.

[kphoger]

and pay an additional 3-4% over what you otherwise would?

Huh?  How do I pay 3–4% extra when paying with cash?

It's pretty easy to track your cash transactions. You look in your wallet and when the money isn't there that means you spent it.

Actually, it's like this:  take out $650 in cash before the trip, get home, count what's left, and do subtraction.  It's pretty easy.

If you're trying to keep a catalog of all of the transactions and categorize them and find out exactly how much you spent on each category, you're a nerd.

I do.  Here's how it works:  write the amounts down on a piece of paper.  Or, what about this:  keep the receipts.

On our church mission trips, I itemize the entire budget expense-by-expense and get exactly that amount of USD$ and MXN$ from the bank before the trip.  Then, as the trip goes along, I write down the actual amount spent on each line item and how much I went over/under budget.  I then balance those sheets against the remaining cash when I return home.  Each expense category gets its own plastic baggie full of cash during the trip, into which I also put any receipts.  My goal is to balance it down to the penny.  I was less than a dollar off on this last trip—and it frustrated me that it wasn't zero—which I suspect was due to either miscounted change by a cashier or rounding at the register that I didn't make note of.  Then I turn in an expense report, which I prepare in Excel in chronological order by transaction date and time, to turn in to church staff along with the remaining cash.  The remaining USD$ goes back in the bank, and the remaining MXN$ goes in the safe till next trip.

[GaryV]

and then digging themselves a further hole by having to pay 19.99% interest on those purchases

That's a bargain these days. I've seen a recent story reporting over 30% interest for a credit card balance.

[gonealookin]

and pay an additional 3-4% over what you otherwise would?

Huh?  How do I pay 3–4% extra when paying with cash?

Excluding the places discussed above that tack on the extra charge for using a credit card, you're not getting the rebate that comes in the form of the credit card's rewards program.

Most people with acceptable credit can get, at minimum, a no-fee card that gives a 1.5% cashback rebate on all charges.  Further, if you have several cards, each giving double points on different categories of spending, you can increase the effective rate by dedicating each card to those categories.  Example:  I have an American Airlines-branded card with Citi, with no annual fee, that gives me double miles on grocery purchases.  The Points Guy values American Advantage Miles at 1.5 cents each, so that's a 3% rebate.  (In fact, American sometimes has Web specials; for one future flight I've booked they only charged 6,000 miles when the cash airfare was around $250, making each mile worth 4 cents and making my grocery rebate an effective 8%).

Also, with interest rates now non-zero on many places where one holds cash, and assuming you pay your credit card bill in full each month, by taking advantage of the "float" (at least 20 days from the day your monthly statement comes out to the date payment is due, plus the time between the date of the charge and the issuance of that statement) you are collecting interest for a period from 20 to 50 days on the amount of each charge.

[HighwayStar]

Huh?  How do I pay 3–4% extra when paying with cash?

You would be getting cash back with a card, you get none of that with cash. Therefore you are paying more.

Actually, it's like this:  take out $650 in cash before the trip, get home, count what's left, and do subtraction.  It's pretty easy.

That tells me nothing about how much went to gas vs food vs entertainment or anything else. It also requires me to go to a bank and get money, which I don't bother with when using a card.

I do.  Here's how it works:  write the amounts down on a piece of paper.  Or, what about this:  keep the receipts.

That is significantly more effort than it happening automatically in the background.
Back in the day I did write things, and keep receipts, it was a far more time consuming process than using the card has ever been.

[HighwayStar]

and then digging themselves a further hole by having to pay 19.99% interest on those purchases

That's a bargain these days. I've seen a recent story reporting over 30% interest for a credit card balance.

If you are paying any interest on a credit card you are using it wrong.

[mgk920]

No, no it wouldn't.  A "bill of attainder" is a part of the criminal law.  It is where a legislature, in this case the Congress, declares that some past act was criminal and then retroactively punishes the individual for the act that was legal at the time he committed.

That is a 'ex post facto' ('After the Fact') law.

Mike