Now as I prop my feet up and listen to “Bama Breeze,” by Jimmy Buffet I am pondering over the day – thoughts – and events. The song really has nothing to do with the story here – other than its significance to simplicity.
What started this train wreck of my imagination and slight frustration? Well, upon check in to the hotel, I was asked for my name and photo ID. I handed over the requested materials. The gentleman asked me for confirmation of my stay and I nodded in affirmation. The next statement was the stray bullet. “Can I have your credit card?”
The hotel has been pre-paid by the company for which I work so I just asked him to look at the file and see that all is in good order. However, he still persisted that a credit card was due. I let the man know that I do not have one (as nice as I could without making it obvious that I was a little embarrassed/irritated). His next comment sealed the deal.”So you are not going to take any refreshments out of the room?” My reply was “No.”
“Well Sir, I will send someone to your room to take all the refreshments out of the room.” He commented back.
My rebuttal, “Would you like me to go now and open the door for them?” (I have something more on this later...)
This event was not the end of my day but consider the impact of the situation. We live in a society that demands we are culturally sound with amenities for every situation. I must admit that if my own personal finance was in order I would have a small credit card. However, I do not have a credit card or even a cellular phone. Thinking about this event I began to illuminate all the advertisements that I have seen recently. Many of them require a credit card for the discount, or a cellular phone so that you can be “texted” a code. Heck, even the Salvation Army (in many bigger cities) has credit card swiping capability. I wonder what happened. It is almost like we are reverting to the beginning of the credit card, or “Diner’s Card.” It makes you exclusive. The very fact that the Salvation Army has the ability to accept credit cards is an oxymoron. Understand that the purpose is to collect more money – that many people do not carry cash today. So, to keep up to the culture they have adapted. Basic business is to adapt with the culture, however, I struggle with the other side of the coin. There will be some people who give when they cannot afford it, creating more debt for themselves, or sharing their debt. I am sure that it is the middle man being cut out. The rich get richer and the poor live rich getting more into debt with the middle man taking sides with the previous.
In a world where bigger is better and faster is more – I wonder what wall we will slam up against to realize that “hey – it is ok to just be average.” Materialism is an addiction that we must come to terms with. The prices continue to rise and the customers will continue to justify the needs. Basic Business: Supply and Demand. The price will continue to rise to find the equilibrium or ideal quantity for the store to have on hand that the customers will buy. Then, in many cases, the stores will offer a sale when their inventories are high to turn product. Guess what – it’s a deal only to move product. The price between sale and retail is the extra profit the store makes. Most of the items at full retail have a nice sticker on them. The splendid word that feeds the addiction is “New!” Now how is all of this rant tied in to the above?
We are expected to have money available at all times based on society. If you do not have the funds available now, then simply charge it – this will help us be culturally savvy. But, before I finish my little topic - I wanted to share a small tidbit of information. In the event that you do fall behind in your credit cards and you need to settle to get out of the compound interest rates you do have options. Before you go to bankruptcy there are options. You do have options to negotiate. I have successfully cut credit card bills up to 50% off of the collected rate. According to CreditCard.com, the profits are very large. Which means they have room to cut fees - and still make a profit. That is the beauty of compound interest.
Profitability
Profits or Losses at Top 10 U.S. Credit Card Issuers in 2008
1. Chase: $780 million profit
2. Bank of America: $520 million profit
3. Citi: $530 million loss
4. American Express: $850 million profit
5. Capital One: $1.00 billion profit
6. Discover: $710 million profit
7. Wells Fargo: $990 million profit
8. HSBC: $520 million profit
9. US Bank: $1.07 billion profit
10. USAA: Not listed
1. Chase: $780 million profit
2. Bank of America: $520 million profit
3. Citi: $530 million loss
4. American Express: $850 million profit
5. Capital One: $1.00 billion profit
6. Discover: $710 million profit
7. Wells Fargo: $990 million profit
8. HSBC: $520 million profit
9. US Bank: $1.07 billion profit
10. USAA: Not listed
Ok - I have grossly got off topic but wanted to throw several ideas at you about this subject. The point is, we should avoid a cultural view of ourselves when looking at material items. It is ok - to not be what is expected by the worldly view or status quo. And just to cap off the blog - remember when I mentioned "more of this later" about the hotel stay. They never did remove the refreshments. He was "calling my bluff."
Images of credit card trap as viewed: http://www.fairloanrate.com
