Can You REALLY Win with Credit Cards?

Welcome to the third day of the Great Credit Card Debate!  Madison wakes up much earlier than I do, and has already addressed the points I made yesterday in her post this morning And the Credit Card Debate Continues…this may end up as a long-term ongoing thing! LOL  Madison contends that most of my points against credit cards all involve carrying a balance and paying interest, which she says she does not do.  Then she says she makes about $11,000 a year on her credit card arbitrage.

Credit card arbitrage sounds like a major hassle to me!  It takes a huge amount of organization and vigilance, and TIME when mistakes happen.  I don’t know about y’all, but nothing will put me in a bad mood like being on hold for 20 minutes or more while listening to inane commercials instead of hold music to talk to an alleged “customer service” representative who may or may not be able to fix the problem…and if not you get put on hold again to wait for someone who is supposed to be higher up on the food chain to finally answer the line who again may or may not be able to fix the problem.  Even when you have TWO of them say it’s fixed, Lynnae has discovered it still might not be fixed (read about her continuing war with the evil Citibank here).  In general I detest the automated menus and long wait times on hold, but today I am particularly cranky after getting my cell phone bill straightened out.

The thing Madison and many others who “love” their credit cards keep saying is that they love their rewards.  I view rewards as a fishing lure for people: it looks great and often you don’t see the hooks on it.  I can honestly say I have not seen any credit card reward that is enticing enough for my to put up with credit card companies’ games. 

I’m one of these bothersome consumers who will not sign anything until I have both read and understand the fine print, because “What the large print giveth, the small print taketh.”  (If anyone knows who originally said that quip, let me know so I can give proper credit, because I love that saying!)  And I cannot understand those user agreements because they have so many “gotchas” written into them.  Professor Elizabeth Warren of Harvard Law School says she isn’t even sure what they say (watch the movie Maxed Out to see her interview) and she has a PhD.

Along with the technicalities of the intentionally ambiguous user agreements, let’s step back and take a look at the big picture.  In a contest of You vs. the Multi-Billion Dollar credit card companies who each have a team of business lawyers on staff, who is more likely to win?  The occasional lucky or super-smart person will triumph from time to time, but the majority of people will lose against odds like that.  It’s like trying to win in a casino, where the odds are always in favor of the house.  Credit card user agreements are written to stack the odds in the company’s favor, not yours.

Finally, Madison says she doesn’t think credit card companies are like venomous snakes (as I likened them to yesterday) but asks:

What I’d really like you to consider is if you only use a credit card for what you can afford, you don’t carry a balance and don’t pay interest aren’t credit cards more like soft cuddly teddy bears?

Not TEDDY bears, Madison…real bears.  Big, impressive, massive teeth and claws!  They are wonderful subjects for works of art, but I sure don’t want one in my house.  In fact, I’ll even skip on the opportunity to simply pet one.  And my beef isn’t with the little plastic rectangles themselves, but the behemoth corporations behind them.  Credit card companies are out to get you financially, although they put a little spin on it to say their goal is corporate profitability.