Author Topic: Article on poverty is a straight up credit card ad  (Read 6293 times)

dude

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Article on poverty is a straight up credit card ad
« on: June 05, 2014, 12:13:34 PM »
This was one of the Yahoo! news headline stories:

http://finance.yahoo.com/blogs/daily-ticker/expensive-to-be-poor-payday-lending-underbanked-153951523.html

It's seriously nothing more than a credit card ad.  I mean at least they are up front about Amex being behind the "documentary."  And worse, they basically backhandedly impugn the debt-free lifestyle.

MoneyCat

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Re: Article on poverty is a straight up credit card ad
« Reply #1 on: June 05, 2014, 12:28:25 PM »
Credit cards are awesome, though.  I use credit cards for everything and then pay them off each month.  I have racked up lots of rewards on stuff I was going to buy anyway.  Plus, I get free purchase protection for anything I buy, it protects me from fraud when using it for purchases over the internet, and it can't be stolen easily like cash.  If you have any kind of self-control, credit cards are a wonderful financial tool for people who live debt-free.

dude

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Re: Article on poverty is a straight up credit card ad
« Reply #2 on: June 05, 2014, 12:35:13 PM »
Totally agree, MoneyCat, but the implication that if these folks had just had a credit card all their problems would have been solved is b.s., especially when Amex is the one behind the story!

As with all such articles, the Comments section is the best part.  Some make valid points (wouldn't the dad and kid be collecting SSI and posssibly Medicaid), but others are just the kind of victim mentality stuff Mustachians don't generally subscribe to.

dragoncar

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Re: Article on poverty is a straight up credit card ad
« Reply #3 on: June 05, 2014, 01:24:22 PM »
Didn't read all of it but I believe credit can definitely help some.  I know of at least one nonprofit that does micro loans for the poor - the idea being that borrowing $100 for a few days can help avoid a $30 late fee.  I don't think there is much interest if any (even a usurious 15% would be like $.10).

eil

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Re: Article on poverty is a straight up credit card ad
« Reply #4 on: June 05, 2014, 03:15:36 PM »
I guess what bugs me the most is the popular notion of poor == helpless. Yes, the couple in this article had some shitty things happen to them, but I rather strongly suspect that their inability to come up with a measly one-off $500 (for example) was more due to lack of foresight and creativity than flat-out desperation. I would be really interested to see their shopping list, whether they have cable TV and smartphones, etc. But there's no way in heck I'm going to watch TV just to find out. :)

eil

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Re: Article on poverty is a straight up credit card ad
« Reply #5 on: June 05, 2014, 03:21:23 PM »
By the way, I'm still waiting for the MMM reality show where average (but largely young and good-looking) people go on camera to talk about how awesome they think they are and yet have no money. Then, whenever they're about to hop in their SUV to go to the grocery store, or stop by Starbucks for a latte, MMM runs up, yells hola! to get their attention and punches them in the face.

Paul der Krake

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Re: Article on poverty is a straight up credit card ad
« Reply #6 on: June 05, 2014, 05:48:49 PM »
AMEX has been ramping up their efforts to reach the unbanked recently. It's a huge market and they don't do this by charity.

San

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Re: Article on poverty is a straight up credit card ad
« Reply #7 on: June 05, 2014, 05:53:40 PM »
By the way, I'm still waiting for the MMM reality show where average (but largely young and good-looking) people go on camera to talk about how awesome they think they are and yet have no money. Then, whenever they're about to hop in their SUV to go to the grocery store, or stop by Starbucks for a latte, MMM runs up, yells hola! to get their attention and punches them in the face.

I would reconsider my ban on cable for that one, not gonna lie.


gooki

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Re: Article on poverty is a straight up credit card ad
« Reply #8 on: June 06, 2014, 04:51:21 AM »
AMEX has been ramping up their efforts to reach the unbanked recently. It's a huge market and they don't do this by charity.

When you can keep someone perpetually in debt with 15-25% interest rates, it's a fucking cash cow.

Elyse

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Re: Article on poverty is a straight up credit card ad
« Reply #9 on: June 06, 2014, 06:56:18 AM »
Look at the photo.

They have artwork on the walls and stereo speakers.

sheepstache

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Re: Article on poverty is a straight up credit card ad
« Reply #10 on: June 06, 2014, 07:10:30 AM »
By the way, I'm still waiting for the MMM reality show where average (but largely young and good-looking) people go on camera to talk about how awesome they think they are and yet have no money. Then, whenever they're about to hop in their SUV to go to the grocery store, or stop by Starbucks for a latte, MMM runs up, yells hola! to get their attention and punches them in the face.

Oh my god.  Yes.

horsepoor

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Re: Article on poverty is a straight up credit card ad
« Reply #11 on: June 06, 2014, 09:44:05 AM »
By the way, I'm still waiting for the MMM reality show where average (but largely young and good-looking) people go on camera to talk about how awesome they think they are and yet have no money. Then, whenever they're about to hop in their SUV to go to the grocery store, or stop by Starbucks for a latte, MMM runs up, yells hola! to get their attention and punches them in the face.

I would reconsider my ban on cable for that one, not gonna lie.

I really hope that MMM would only allow his show to be on a public access channel.

dragoncar

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Re: Article on poverty is a straight up credit card ad
« Reply #12 on: June 06, 2014, 10:54:28 AM »
Look at the photo.

They have artwork on the walls and stereo speakers.
I wouldn't hold that against them without more information, I've seen stereos at thrift stores and tag sales for very cheap ($5 to $50 range) and in theory those are the type of things you only need to buy once. As for the artwork, most of it looks like family pictures and you can buy used frames pretty cheap as well

Haha, was that supposed to be a joke?  They literally have a home-made baby mobile crafted out of an old wire hanger and some string, and some hand-drawn art presumably by their young child.  I see nothing in that video that couldn't be found on the side of the road for free.

Elyse

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Re: Article on poverty is a straight up credit card ad
« Reply #13 on: June 06, 2014, 02:32:55 PM »
Look at the photo.

They have artwork on the walls and stereo speakers.
I wouldn't hold that against them without more information, I've seen stereos at thrift stores and tag sales for very cheap ($5 to $50 range) and in theory those are the type of things you only need to buy once. As for the artwork, most of it looks like family pictures and you can buy used frames pretty cheap as well

Haha, was that supposed to be a joke?  They literally have a home-made baby mobile crafted out of an old wire hanger and some string, and some hand-drawn art presumably by their young child.  I see nothing in that video that couldn't be found on the side of the road for free.

They were some pretty nice speakers, and the frames that they used go for quite a bit of money.

They didn't go for walmart frames.  They bought the higher end stuff. 
Yes, they have handmade things on the wall, but look at the hanging frames.  There is a reason framing stores exist without having to sell anything else. 

dragoncar

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Re: Article on poverty is a straight up credit card ad
« Reply #14 on: June 06, 2014, 02:46:45 PM »
Look at the photo.

They have artwork on the walls and stereo speakers.
I wouldn't hold that against them without more information, I've seen stereos at thrift stores and tag sales for very cheap ($5 to $50 range) and in theory those are the type of things you only need to buy once. As for the artwork, most of it looks like family pictures and you can buy used frames pretty cheap as well

Haha, was that supposed to be a joke?  They literally have a home-made baby mobile crafted out of an old wire hanger and some string, and some hand-drawn art presumably by their young child.  I see nothing in that video that couldn't be found on the side of the road for free.

They were some pretty nice speakers, and the frames that they used go for quite a bit of money.

They didn't go for walmart frames.  They bought the higher end stuff. 
Yes, they have handmade things on the wall, but look at the hanging frames.  There is a reason framing stores exist without having to sell anything else.

Now I know you're trolling.  You can determine that "the frames that they used go for quite a bit of money" based on a blurry photo?  Please use your powers to tell me the brand and model of the speakers and frames, and also what color underwear I have on today just for fun.

DeepEllumStache

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Re: Article on poverty is a straight up credit card ad
« Reply #15 on: June 06, 2014, 04:16:05 PM »
By the way, I'm still waiting for the MMM reality show where average (but largely young and good-looking) people go on camera to talk about how awesome they think they are and yet have no money. Then, whenever they're about to hop in their SUV to go to the grocery store, or stop by Starbucks for a latte, MMM runs up, yells hola! to get their attention and punches them in the face.

I would reconsider my ban on cable for that one, not gonna lie.

I really hope that MMM would only allow his show to be on a public access channel.

We could check it out from the library. 

I didn't realize my life was missing this until now.

Oscar_C

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Re: Article on poverty is a straight up credit card ad
« Reply #16 on: June 06, 2014, 04:41:23 PM »
Credit cards are awesome, though.  I use credit cards for everything and then pay them off each month.  I have racked up lots of rewards on stuff I was going to buy anyway.  Plus, I get free purchase protection for anything I buy, it protects me from fraud when using it for purchases over the internet, and it can't be stolen easily like cash.  If you have any kind of self-control, credit cards are a wonderful financial tool for people who live debt-free.

The main issue addressed is that some people despite their self-control, or are otherwise under-banked, and as a result become unable to pay due to financial hardship. While the people on this forum for the most part have that self-control, many aren't as disciplined, or are otherwise incapable to make use of this kind of tool.

Regarding the article, wouldn't a personal line at a reasonable rate be better compared to a payday loan or am I wrong about how they work.
« Last Edit: June 06, 2014, 04:43:48 PM by Oscar_C »

galliver

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Re: Article on poverty is a straight up credit card ad
« Reply #17 on: June 06, 2014, 06:42:02 PM »
I feel like the biggest issue here is that being debt-free isn't considered proving your responsibility with money/credit. Credit score will favor someone with 3 mortgages and 5 car loans over someone with none of these (assuming paid on time, etc). It's worse because credit score is considered for much more than debt these days, it's a stand-in "responsibility score." What else can you really expect when it's lenders that come up with it? They're incentivizing using their business.

Underbanked communities and populations are also an important issue; although this article was mainly about credit, there are other costs to those who don't have a bank account for whatever reason (inconvenient location, lack of education about the benefits, lack of trust, no SSN, or of course being banned). http://business.time.com/2012/11/20/why-so-many-americans-dont-have-bank-accounts/

I have a hard time faulting this family on much. Except maybe not realizing the importance of managing their credit score (in 2000!) or their apparent inabilty to resist temptation in their youth in order to do so. But nobody expects a debilitating or expensive illness in their family, much less two, and it's not like they were in particularly lucrative fields. Even if they had savings, they may have been drained by medical bills and related costs. $40k/year doesn't seem like a lot for a family of 4, and if the dad can't work his contributions around the house might be limited, too, so it's not even like they're getting all the benefits of a stay at home parent. I feel bad for Mrs. Kimmel. She must have a mountain on her shoulders.

Oscar_C

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Re: Article on poverty is a straight up credit card ad
« Reply #18 on: June 06, 2014, 06:52:45 PM »

I have a hard time faulting this family on much. ...
But nobody expects a debilitating or expensive illness in their family, much less two, and it's not like they were in particularly lucrative fields. Even if they had savings, they may have been drained by medical bills and related costs.

We can all agree that many individuals are irresponsible when it comes to finances, that's why this forum is wonderful

But as you've all noted, not everybody is as such.

Individuals who are bad financial conditions due to medical hardship have my sympathies.

Paul der Krake

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Re: Article on poverty is a straight up credit card ad
« Reply #19 on: June 08, 2014, 11:58:30 AM »
I feel like the biggest issue here is that being debt-free isn't considered proving your responsibility with money/credit. Credit score will favor someone with 3 mortgages and 5 car loans over someone with none of these (assuming paid on time, etc). It's worse because credit score is considered for much more than debt these days, it's a stand-in "responsibility score." What else can you really expect when it's lenders that come up with it? They're incentivizing using their business.
I agree with you in principle, but it's so trivial to overcome this "problem" that it isn't really one. For all intents and purpose, you can be given the exact same benefits than your hypothetical guy with 3 mortgages simply by putting $50 worth of purchases on two cards diligently for years, and you'll end up with a 750+ score. Hardly a hardship when you consider that doing that will allow you to borrow money at rock bottom prices should you ever need to.

Back to the topic, hey at least AMEX is acknowledging that there is a problem, and doing something about it. Many people love their credit unions, but if they were more successful at reaching the lower rungs of the income ladder, the check cashing industry wouldn't be here in the first place.