I just experienced something that many poor people and lower middle-class miss out on. It’s something that ought to be available to everyone. Instant Credit Card Replacement.
I have a credit card from a major, retail bank that I use for misc sundry things when my cash is running low. Things like getting Trinity groomed, or gasoline, or something else like that. I never use it for big-ticket items.
Well, my card was compromised sometime today and a couple of charges I didn’t make wound up on it. I called the service line of the bank and they made it right. No fuss at all. Most “high-risk” credit cards make you jump through thousands of hoops to be made whole after your card is compromised.
One other thing that you usually have to wait on is the new card to be sent to you. I’ll still have to wait 4 to 6 business days to get a new card, but here’s where my bank meets me where I am. The ability to be issued a NEW card electronically now exists. In 10 minutes, I had a new, active card number tied to my Apple Pay. Pretty neat, huh?
As little as 10 years ago, I would not have been able to do this. Not only because of the technological limitations of the time, but primarily because of my standing in the world of what I call “average, every day people finance.” Because my credit was not great, I didn’t have a major credit card when. I had a high interest one that I used ONLY if I was bleeding. It had a low limit and high interest rate, no online management and it sure as hell had no fraud protection. If that one had been compromised, I’d have been screwed.
Those of us that have never been poor after 1992 don’t know what it’s like these days. For most of us, if we had to pay what poor people have to pay in order just to exist, we’d flip our shit and complain to the Consumer Protection Agency. We’d make a stink and refuse to pay whatever unreasonable thing we were told to pay. Poor people don’t have that option.
If you’re poor, chances are you can’t get a checking account, much less a savings account. If you can’t, you’re using “refillable debit cards” and money orders to pay bills and buy things you need. Adding cash to refill cards costs, on average, five bucks each time you add money to it. Think of that as being charged for the pleasure of making a deposit to your checking account. Moreover, you can’t have more than $1,000 in most of them. Some only allow you to have $500 or less. That five bucks winds up adding up. If you have to withdraw from an ATM, that’s another two or three bucks charged by the ATM provider and then another two or three bucks by the card issuer. So if I deposit $100, then a couple days later have to withdraw $25, I’ve just paid ELEVEN DOLLARS to service that deposit and that withdrawal. That’s more than I pay in service fees for my checking after a whole month of transactions. Oh… BTW… There’s also a $25.00 per year service fee for the pleasure of having the thing.
When you pay bills, like power, water, phone, rent, etc., and you don’t have a checking account, you have to use money orders. Money orders, depending on where you buy them, cost anywhere from $1.50 to $3.00 a piece. Let’s say that I am a single father with one kid making $25,000 per year. I’m probably paying rent, power, water, phone, internet, and car insurance, at a minimum. After buying one money order for each of those, I’m into Western Union for $9.00. If I use a convenience store because I live in a small town without Western Union, I’m into them for $18.00.
So let’s add it all up. I’ve made 4 loads of my cash card at 5 bucks each. Then I needed cash for a few things and withdrew from an ATM twice at a max of 3 bucks each. The service charge was taken out for my card too at 25 bucks. All my money orders that I had to shell out cost me 18 dollars. All together, just for the pleasure of managing money, I’ve shelled out $78 dollars.
I’ll spell it out… just so you can grasp that.
After tax, I’m netting $20,800 per year. That just about $1708 per month.
Rent (in the average GA or SC small town) $500 per month
Power (in SC at present) – Around $150 per month for a 900 sq ft Apt.
Water – $70 per month
Phone – $50 per month
Internet – $30 per month
Car Insurance – $100 for liability only and median credit rating
Just on those things, I’ve just shelled out $900. That leaves me $808. I haven’t bought gas, groceries or clothes yet. Let’s say I’m shelling $20 per week for gas, $150 per week for groceries, and about $15 per week at the laundromat because I don’t own a washer\dryer. That totals another $740, which leaves me with $98 at the end of the month. I can have emergencies and unexpected charges of less than a total of 98 bucks and still survive.
Oh wait. I forgot the service fees.
$98 minus $78 equals $20. I have $20 bucks at the end of the month if nothing terrible or unexpected happens.
If the car doesn’t break down in some way…
If I don’t need a new pair of pants for work…
If my kid doesn’t have to pay for something for school…
If I don’t lose my cash card…
If everything goes EXACTLY RIGHT, I have $20 bucks left that I can either save or blow, thanks to service fees charged by companies that prey on the poor.
Yeah, I’m loud and angry and ugly when someone like Wells Fargo is only minimally punished for internal deposit account fraud. I’m loud and angry and ugly when Republicans vote to remove a citizen’s right to sue banks. I’m angry, loud and ugly with a society that has the unmitigated gall to look down it’s nose at the poor then charge them for the privilege of being poor.
But I got a replacement credit card today, electronically, because someone stole $39.00 from me and I happen to be watching and caught it and can afford to play the world’s little game called capitalism.