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Services that prey on the poor


Chris...

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4 minutes ago, Dirtyhip said:

Banks.  Unless you keep at least a grand in your account, you pay high service fees.  It costs to bank, unless you are flush with cash.  

I have a credit line that I pay an annual fee but my other accounts have no fees. They couldn’t stay in business long if they depended on me.

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30 minutes ago, late said:

Payday loans are loan sharks in suits. No civilised country lets a business exploit people that badly.

I was looking up Brighthouse lenders the other day. They are UK based. Typical loan rate is 149% per annum. Ouchie

Once in my 20's i took out a loan from something similar. Not payday but just a no doc loan. It was painful in paying it off. Never again. Also did the rent to own furniiture. The selling point was you own it at the end of the payments. I was slow in the maths

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1 hour ago, Chris... said:

Get paid 2 days early. I wonder how much it costs to get paid early 

And these people evidently don't realize that they will probably be broke two day's earlier by the next payday.

I had a buddy who worked for a rent to own place for a short while. He quit once he realized that he couldn't morally rip off the idiots who 'rented' things there.

As far as title and payday loan places, without them real loan sharks would fill the void. We are talking the knee-breaking types. Both are very bad, but one is worse. Pick your poison, or better yet, don't take the poison. 

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14 minutes ago, JerrySTL said:

As far as title and payday loan places, without them real loan sharks would fill the void. We are talking the knee-breaking types.

Nope.

We allowed banks to leave poor areas, letting various kinds of thieves  take their place. Crooks will always be there, but this is still basic economics, reduce demand, and things get better.

The large banks owe us a debt that will never be repaid. They owe us, and asking them to do what they used to do is a trivial request. More importantly, we need to work on income inequality which is the underlying cancer.

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1 hour ago, Dirtyhip said:

Banks.  Unless you keep at least a grand in your account, you pay high service fees.  It costs to bank, unless you are flush with cash.  

That’s why we switched to a credit union.  We got sick of the fees even with the balances we keep. They were nickel & diming  us on various different fees every month.

My wife also kept catching statement “errors” where the math just didn’t quiet add up to the tune of maybe $1.18 or some random number generally less than $3.  Every time she called them on it they admitted the mistake and credited us the money.  

After yet another accounting “error” we said F it and dumped B of A and moved everything to the credit union.

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As you go up the wealth ladder there are more and more things that cost less than it does for those below you.

There are so many tax shelters for the wealthy that Warren Buffett said his secretary pays a higher percentage of income in taxes than him and he couldn't find any other highly paid CEO where it was different.  If you make a $1,000,000 profit on a stock you hold for 10 years, that avg. $100,000/year in income is taxed at a 2% per year rate!

Some of it makes sense: those with solid incomes and assets should get lower interest rates when borrowing for homes, cars, etc. because of the higher probability they'll pay-off the loan.

But I don't understand why I sometimes get a better price due to a high credit rating for things that don't involve credit and are paid upfront.

Things like zero fees for stock investing (no margin investing) at DRIPs that require a high minimum to join to Mutual Funds that have lower percentage fees for $10,000 investments vs the min. $2500 investments, make it harder for people to get started with automated savings - the best way to begin achieving wealth.

Before computerization greatly lowered banks accounting, transfer, calculation, etc. costs, and the banks acted as if you were doing them the favor by letting them hold YOUR money, people would get a free toaster for opening a $100 account.  Now, unless you've got $10,000, you don't get the full range of benefits and often have to pay more in fees than you get in interest even if you don't make any transactions.

My Credit Union CD's are paying 2.85% interest, and even checking pays 0.10% and I have no monthly fee, free ATM use at over 70,000 ATMs in America and over 20,000 ATMs in other countries, no debit card swipe fees, and more.  But someone trying to save a few hundred gets a 0% savings account interest rate and, if he/she includes a checking account is charged several dollars/month if their total deposits are less than $1000.

With more and more being paid through credit cards, it has become THE major way the poor are charged more. All my credit cards have no-annual-fee, give give 2%-5% cash-back and sometimes up to 20% online (Flowers.com, etc. that you can link to on the Discover website for things like funeral flowers for out-of-state relatives, etc.).

Up until May 15th, when Walmart did away with it's Savings Catcher program, I was averaging 4% in grocery savings with it plus another 2% cash-back by charging with my Citi Double Cash Mastercard.  So I paid an avg. $94 for $100 worth of stuff.  If you don't qualify for a good cash-back credit card and can't afford a smartphone expensive enough to run the Savings Catcher app, you paid $100 for what Walmart charged me $94.  Now I'm paying $98 without the Savings Catcher, but that's still a break.

Note that when people use credit cards, the business has to slightly raise prices to pay for credit card company processing fees which have grown due to so much cash-back occurring now.  So the poor who have to pay with cash are effectively subsidizing the rest of us by paying higher prices than would exist without credit cards.

Overall, cash-back is little more than a scheme.  If cash-back didn't exist, credit card company fees would drop and stores would lower prices.  But since not everyone is using cash-back cards, those of us who do - those not at the bottom of the financial ladder - benefit at the expense of those who don't.

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12 minutes ago, Chris... said:

Another one that gets me is the commercial that shows a person living in squalor or driving a crappy car but only if they check their credit score they would be much better off

Day time TV mid week is brutal to watch. The fast cash commercials & attorneys trying to drum up cases are in heavy rotation.

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4 hours ago, Kzoo said:

Now there's a real capitalistic attitude.  We ALLOWED banks to decide where to do business? 

I don’t always  agree with Kzoo, but when I do it’s because he’s right. 

Most efforts to reduce inequality result in misery. 

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1 hour ago, BuffJim said:

Most efforts to reduce inequality result in misery. 

I suppose it depends on the effort and sustaining it.  

Education seems to help folks open doors, but do you favor poor folks at the expense of good students if you are talking about scholarships?  That seems wrong, mostly.  Do you give jobs to crippled lesbian transgender eskimo chicks instead of better qualified candidates?  That seems wrong, too.  Do you bus kids an hour and half away from your good neighborhood school so other people can take their place?  Seems wrong again.  

I don't know the answer there, but I do know poor folks are often situationally poor, or they are poor from growing up in sustained generations of poverty.  A leg up can be most helpful, but again it seems there isn't enough to go around.  

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28 minutes ago, Randomguy said:

I suppose it depends on the effort and sustaining it.  

Education seems to help folks open doors, but do you favor poor folks at the expense of good students if you are talking about scholarships?  That seems wrong, mostly.  Do you give jobs to crippled lesbian transgender eskimo chicks instead of better qualified candidates?  That seems wrong, too.  Do you bus kids an hour and half away from your good neighborhood school so other people can take their place?  Seems wrong again.  

I don't know the answer there, but I do know poor folks are often situationally poor, or they are poor from growing up in sustained generations of poverty.  A leg up can be most helpful, but again it seems there isn't enough to go around.  

You've given examples from non-profit organizations --school boards of education hire the bus companies (at least in CAnada they do), etc.  Some scholarships are deliberately targeted for certain groups....it gives it in the scholarship criteria for applicants.  It depends on the original donor/philanthropist for the scholarship/bursary to the educational institution or Canadian community at large.  It is not a terrible thing, several family members have applied for scholarships/bursaries from different institutions.  These are family member students are scoring over 90% total for all their courses. 

I challenge the assertion about minority students....some of them are incredibly driven and academically strong (as well as just decent people). :) 

A lot of financial institutions are to make money.  Certain credit unions may be the exception...depending on the banking law in a country.  (Canada has 2 separate pieces of legislation for banks vs. credit unions. )

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None of you have even scratched the surface. The book was good enough that I bought it.

"It is not uncontrollable technological and social change that has produced a two-tier society, Stiglitz argues, but the exercise of political power by moneyed interests over legislative and regulatory processes. “While there may be underlying economic forces at play,” he writes, “politics have shaped the market, and shaped it in ways that advantage the top at the expense of the rest.”

https://www.nytimes.com/2012/08/05/books/review/the-price-of-inequality-by-joseph-e-stiglitz.html

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Lately on the TV stations my wife watches they are constantly advertising appliance insurance for your home and extended warranty insurance for your car. Who buys this stuff? You are talking about stuff that you want to last but if you get a washing machine or fridge that doesn’t last as long as you hoped it would, bite the bullet and get it repaired or buy a new one. It’s not like home owner’s insurance where a catastrophic loss could cost you hundreds of thousands of dollars.

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9 hours ago, BuffJim said:

I don’t always  agree with Kzoo, but when I do it’s because he’s right. 

Most efforts to reduce inequality result in misery. 

Have you given any thought about why this should be...if true?

In my view the answer would be to reduce inequality over society as a whole, and this should start by imposing a redistributive system upon every level of society. In Scandinavian countries the low level of income inequality would appear to lead to an increase in the happiness of their citizens.

Heresy I know.......blood reds with their anti-capitalist ideals. 

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22 hours ago, late said:

Sigh.

the-price-of-inequality-how-today-s-divi

This is a straw-man.  The conversation was your comment about ALLOWING the banks or a bank to move.  Who tells you where you are allowed to live or locate your business.  ALLOW a business to relocate?

Late, your bathrooms must be pink because someone said so. Yeah that's stupid...

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Just now, Kzoo said:

This is a straw-man.

Nope, the comments on inequality told me you guys did not know the hows and whys of income inequality.

About banks, the thing to remember about progressive reforms is that it's always a moving target. Forbidding usury, and requiring big banks to offer services to poor areas is reasonable.

 

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1 hour ago, late said:

Nope, the comments on inequality told me you guys did not know the hows and whys of income inequality.

About banks, the thing to remember about progressive reforms is that it's always a moving target. Forbidding usury, and requiring big banks to offer services to poor areas is reasonable.

 

Speaking of moving targets, mirror meet Late.

 

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