Tag Archives: credit cards

The Credit Card Bailout

The Bush-Pelosi bailout has now officially jumped the shark.

Hank Paul, empowered by George Bush and Nancy Pelosi, now present: The Credit Card Bailout.

What is disturbing about our President, and our even worse Congress, is that we are throwing good money after bad in a way that is not only wasteful, but also foolish.

The purpose of the credit card bailout is obviously to increase spending. The credit card bailout does so by socializing the losses that individuals and banks have taken because people bought things they could not afford, while allowing the individuals to keep those toys and the bansk to keep collecting interest payments.

Without the credit card bailout, less bad offers would be made, and more people would forced into bankruptcy by institutions desperate to get whatver cash back is possible, as soon as possible.

However, instead of rewarding bad behavior, this money can be spent on ways that will help our country and our world.

For instance, while the government maintains a large fleet of flex-fuel vehicle, 92% of them consume pure gasoline because they are too far from E85 stations. We could spend money to subsidize nearbye stations putting in E85 pumps, which would immediately create work and then reduce the flow of capital from us to petro-states.

Instead, we do a credit card bailout.

We subsidize men like Hugo Chavez, who recently threatened to send in the tanks if a friend lost an election, in order to bailout credit cards.

The financial crisis is an opportunity: money will have to be spent to limit the pain, and this money can be invested in mediating the destructive influence of oil and natural gas. However, the same forces make alternative energy sources (ethanol, wind, etc) less attractive in the short term.

The Democrats may be ready to do their part.

Unfortunately, with Bush we get more of the same: a credit card bailout.

Update: While I was writing this, the fed announced a $500 billion plan to bailout bad mortgage-backed securities. The quicker we can get the Bush financial team out of office, the better.

Citi Dividend MasterCard to Cut Food & Gas Rebate from 5% to 2%

3 tips: Maximizing Card Rewards,” by Gerri Willis, CNN, 10 August 2006, http://money.cnn.com/2006/08/09/pf/saving/toptips/index.htm.

Credit card issuers slash rebates on use at pumps,” by Harriet Brackey, South Florida Sun-Sentinel, 25 August 2006, http://www.sun-sentinel.com/business/local/sfl-znoreward25aug25,0,5553635.story?coll=sfla-business-headlines.

Credit cards may become a little less good for you.

Citigroup said this week that it would slash by more than half the cash rewards it pays to holders of the Citi Dividend MasterCard on purchases at gas stations and grocery and drug stores. The 5 percent cash back will soon be 2 percent.)

American Express, too, will end double cash-back points paid on “everyday” purchases to cardholders in its Membership Rewards program starting in October.

(The second bit is especially interesting if you consider a recent CNN “correction”)

An earlier version of this column incorrectly stated that 6 million credit card solicitations were sent out annually. In addition, it incorrectly indicated that American Express would eliminate double-reward points on all merchandise. CNNMoney.com regrets the errors.

This isn’t exactly a big scandal — Citibank and MasterCard are not in a league of villains with NationMaster and Ask.com — but it’s still annoying. Getting 5% has been nifty, and it will be annoying trying to find an alternative card or, failing that, using anyone-but-CitiMasterCard out of spite.

Is any 5%-on-food card company not betraying the hopes and dreams of American shoppers — and American democracy — by continuing such a rebate program?