Why I Feel That Debit Cards Are Evil
Posted by admin on Mar 28, 2008
The widely popular Debit card/check cards offered by almost all banks have become the standard way to pay for everything from itunes music to rental cars. Where the government states that debit card transactions have grown more than 20 percent a year and have out grown more than all credit card transactions.
As there appeal is very understandable. As Debit cards are quick and easy to use. But using a debit card can cost you hundreds and even thousands of dollars a year, no really. So I will show you why you should never carry the evil debit card.
More Risky than Carrying Cash
First you must understand that all U.S. banking institutions lost an estimated $662 million to debit card fraud in 2005. So guess what these banks trying to do? They are trying to recover this money that is being lost. You would probably be safer to just carry cash.
Although you don’t have much support if your card is lost or stolen, but at least your loss is limited to the amount of the missing money. With having a debit card you will put your entire bank balance this is in your bank account at a high risk. If you link your checking account to your savings account to avoid overdrafts, you put the balance in both accounts at risk, as you will face ridiculous overdraft charges.
Now think about this, where if a thief gets a hold of your credit card, the federal Truth in Lending Act will limit your liability for any fraudulent credit card charges to only $50 yeah that’s right only $50. You may not even have to pay that much, as many credit card companies or banks will not impose any charge on their defrauded customers. And while the case of fraud is being investigated, you can refuse to pay any part of these unauthorized charges.
But the evil Debit cards fall under a very different set of laws, known as the Electronic Fund Transfer Act. To limit your liability to $50, you have to notify your bank within two business days after discovering that you’re debit card has been lost or stolen. And if you wait longer than that, but if you wait to give your bank notice of the fraudulent transactions within 60 days of when your bank statement is mailed to you, then your maximum liability jumps to $500. Now if you miss that deadline and you could lose all the money in your account.
Because the debit card accesses the fund directly out of your bank account, you can be left without your grocery money while the fraud claim is being investigated.
Now this is stupid!
A single trip to Burger King was enough to send Tom Martin’s checking account into absolute freefall. Where Tom had made the mistake of paying for some fast food with his debit card. He thinks he spent only about $3 more than he had in his bank account. But unfortunately, by the time he had realized that there was a problem, the bank had hit him for about $350 in overdraft fees. So at $35 per charge, it’s easy to rack up hundreds of dollars in needless NSF fees.
The Center for Responsible Lending, a consumer group, estimates that overdraft charges from debit cards cost people about $8 billion each year. I still remember when banks used to refuse any debit card transaction that would overdraw a depositor’s account. But not any more. As banks could warn depositors when their accounts are close to being overdrawn. But they don’t.
Instead most of these financial institutions will automatically enroll their depositors in a program that loans their customers the amount of the overdraft—but at a steep price. The Center for Responsible Lending estimates that Banks that offer these lending programs can expect an drastic increase in overdraft revenues, as much as 200 to 400 percent per year.
With it being calculated as an interest rate, rather than a fee, the cost of these loans is ridiculous. The average amount of a point-of-sale purchase that overdraws an account is $14.75. But the average over draft fee is more than double that amount. According to the agency, most consumers only use these loans for a few days. So on an overdraft loan, the annual percentage rate can be as high as a WOPING 20,000 percent.
In defense of this practice, I consider to be financial rape, the bankers like to point out that it’s the responsibility of the account holders to monitor their account balances and avoid overdrafts. Which is ridiculous but, of course, that requires the account holder to know how much money is in their account. Which is the reason why we trust banks to hold our money for us but instead the choose to take us for every hard earned dollar that we have. I think that I will just stick to carrying cash
Export author Keishon Martin is the owner of KeyWorldWide Inc. which owns and operates http://www.GetRichinMusic.com http://www.NewMoneyCredit.com and http://www.getmoneymoney.com visit their websites for more info
Stumble it! Bookmark: 
You can try to pay your way out of debt, but the result is inevitable. The system is deliberately designed to make you fail. It uses the credit reporting system to manipulate you into paying, then your ego, and fear of being sued.
Let me tell you this, if you are not paying the balance every month, you will inevitably fail, lose all of your cash, have very bad credit, etc.
A. As if you didn’t already know, the consumer credit system is rigged in favor of its investors, not its customers. By changing your perception “debt†you will see your way out and new opportunities.
B. Understand that credit card payments are cash flows to creditors, and in many cases, securities that are purchased everyday. That is, you can buy them via the stock exchange.
C. If you have debt, let’s say credit card debt, you got that money legally. The longer you keep it, the more it benefits you. There are laws that make this easy once you have the knowledge.
D. The interest rates charged by creditors tell you when to stop paying, when your risk is too high. We’ll discuss something creditors refer to as “universal default†and how it can be used to lower your risk to creditors.
E. The same habits of borrowing and spending that got you into debt will not get you out of debt. Getting out of debt requires new thinking and new habits.
Settlement is a creditor’s scheme
You pay an outrageous 15% of your total debt, they “manage†your money then you pay imputed income taxes for the forgiven balances.
The settlement companies never tell you that there is a growing trend of creditors who have written policies to refuse all settlement offers. So let’s say you have $60,000 in credit card debt, the settlement companies promises to settle all accounts for 60%, and you pay them 15%, so really you are “settling†for 75% of your total debt.
Then, depending upon your income tax bracket when you factor the windfall imputed income of 40% of your total debt, you could really be paying 85% of your total debt. What if you factor in just one creditor who would not settle? Wow, what a scheme!
And this doesn’t stop harassing phone calls or lawsuits and guarantees you bad credit and no cash left even IF you are able to complete the three year program. It is no wonder why at least seven states have already outlawed debt settlement.
More Debt is Inevitable
The banking system has created a deliberate economic cycle with consumer credit cards. They profit at each stage, it goes like this: They originate (counterfeit) “money†for your credit account.
This is based on your credit history, and the better your credit history, and the longer you continue paying, the more credit accounts you can have. This cycle continues until you are not able to continue paying on their terms. Then your credit score goes down and your interest rates and payments increase.
Eventually you no longer benefit from the use of these credit cards, are unable to use them, will have no more available credit and then find yourself in a collection process. Unless you pay your credit card balance in full each month, you are inevitably caught in this cycle and it will take its course.
Settlement, bankruptcy, counseling and consolidation are all part of the same system, to induce you to continue paying in some way. The more payments that the system can get from you, the more valuable are their cash flows (receivables) and the more dividends they can pay to shareholders.
The statistics show that if these methods help you get out of debt, in nearly every example, you will need to give up all of your cash and you will still lose your credit history or borrowing power. The alternative is that the bank simply obtains a judgment lien and then begins taking your income, property and assets involuntarily.
The bank profits from day one, they sell an interest in your credit account to investors, they have it insured and if you don’t pay, they claim it as a loss and the tax payers pay for it (us) and then sell the value of the account to a third party collection firm who tacks on huge fines, penalties and attorney fees.
Remember that all of these systems, programs or services that people believe will get them out of debt were created over many years by many thousands of attorneys working only for the benefit of the credit and banking system. Your financial well being has never been in their plan.
Many people will tell me or believe that they don’t have debt problems, even if they are not paying their balances in full each month. They say they have a job, or two jobs and can easily make the minimum payments, oh, and that their interest rates are very low.
A business practice known as “universal default†changes all of this, because if this person is late on one payment, for any reason, maybe he forgot, was out of town, didn’t tell the bank about his new account number, whatever, the credit reporting services notify all creditors that there was a late or missed payment and immediately, all interest rates jump to usually 29% and 39%. Almost always, this is a disaster and that’s party why I say that “more debt is inevitableâ€. The system is designed for you to lose, and this is just one way of insuring that.
During and following my experience with debt, I learned some very important lessons that I would like to share with you:
1. The “debt†I thought I had was actually tax free money that I legally received from my creditors.
2. My creditors already factored into the “loan†the chance that I would not pay the balance in full someday.
3. My creditors were very sneaky, they didn’t tell me that they had a license to create money from nothing and call it a loan, as if they lent their own money when they really did no such thing.
4. Instead of paying creditors first with my available cash, I could invest my cash into assets that could later be used to pay creditors, either my current creditors or future ones.
5. After my creditors were paid, I would still have my cash and assets working for me.
6. After six years of applying my new knowledge
I became a millionaire and just a couple of years after that, I had acquired a net worth of over five million dollars!
The most powerful message I can give you about my experience and what I’ve observed with tens of thousands of success stories is captured in my new dialogue, What Would Your Attorney Say?
John Gliha
john@johngliha.com
http://www.johngliha.com
Blowing the Whistle on Credit Card Debt