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It's a very easy trap to fall into if you're living check to check and make even the slightest mistake. In each such story online, I've heard a claim that they
by bdhe 15y ago
It's a very easy trap to fall into if you're living check to check and make even the slightest mistake.
In each such story online, I've heard a claim that they specifically have algorithms to maximize the penalty fees on these mistakes.
Its another instance of a practice that disproportionately affects the poor. Unless you're living paycheque to paycheque, you would never even bother looking into such niggling details.
- noahth 15y agoand when you are living paycheck to paycheck, you don't often have the time or energy to wander the maze of niggling details.
- dodedo 15y agoTime and energy? Perhaps. I think the primary issue is math and accounting illiteracy. Most Americans have no financial education whatsoever.
- jm4 15y agoI disagree. Living paycheck to paycheck is not necessarily exclusive to lower earners or those short on time. Personally, when I did live paycheck to paycheck I had nothing but time. For most Americans, more money means bigger bills. Got a raise worth $300/mo? Let's go get a new car that's going to cost us $400/mo! I understand that some people work multiple jobs, take care of kids, etc. Those people barely have time to breathe, let alone manage finances. Even so, managing finances is a fact of life. Time, more money or whatever else you can think of will not break the cycle of living paycheck to paycheck. It requires a change in attitude and habits. The first simple fact is you have to spend less than you earn. It's a basic concept that so many people fail to grasp. If it's payday and you have leftover money from the last check you have savings. Don't go out and spend it like it's found money. Set it aside. Do this over and over again and you have an "emergency fund". Guess what? Now you are not living paycheck to paycheck. The second is that you have to take on an active role in managing finances in order to accomplish this. That means planning, budgeting, tracking and adjusting. The most difficult part is making the decision to start and then taking the first step. There a hundred excuses one could come up with for living paycheck to paycheck, having debt or some other financial mess. Predatory banks, too little money (when still earning more than a reasonable amount), not enough time. None of it changes the fact that you are still living paycheck to paycheck. The only thing that changes that is planning your own finances instead of letting these other things plan for you.
- backprojection 15y agoWhat bothers me the most is that there are engineers who will use their creative skills in such a way. Their precious human capital could be used to create further knowledge and advance progress, instead it's used to exploit.
- jeffool 15y agoIt's hard to fault them. They've got to pay off those huge student loans somehow...
- patrickyeon 15y agoI am not here to defend those engineers, but it's a very easy trap to fall in to. An interview I enjoyed reading, as a warning, was with a programmer who wrote adware [1]. It was just one more small step each time, first kicking competitors off, than maybe sneaking in an easier re-install, then maybe not going away... In the case of these overdraft fees, it doesn't even seem to me that it would take a particularily skillful or creative engineer to implement it, just a conniving enough boss to ask. After that, it's just any one person who's willing to do it for the paycheque, and we see many other people do much worse to get a paycheque. As an engineer myself, it's even scarier when the problems are challenging and exciting, but the application scares me. Oh man, would I ever like to try and put together advanced intercept/listening systems (think cell phones, over the air)! I get excited thinking about all the technical challenges, so if someone wanted to pay and support me to do it, wow that'd be interesting! It takes me a moment to stop and think to realize that I don't want to be involved in giving that kind of power to the people who would want it. [1] http://philosecurity.org/2009/01/12/interview-with-an-adware-author http://philosecurity.org/2009/01/12/interview-with-an-adware...
- dhugiaskmak 15y agoTheir precious human capital could be used to create further knowledge and advance progress, instead it's used to exploit. You've just described the entire history of finance and nearly all of modern economics.
- jarek 15y ago> Their precious human capital could be used to create further knowledge and advance progress, instead it's used to exploit. You'll be the one signing the paycheque, yes?
- shabble 15y agoI've heard it mentioned as 'largest payment first', with the stated argument that it's most likely to be a loan or some other important payment, but has the practical effect of triggering charges on way more items. It's For Your Benefit, citizen. (Also, the cash advance interest differential for credit-cards, which is higher, and only paid off after all other charges are covered, rather than any sort of temporal ordering)
- gujk 15y agoThe government acts For Your Benefit, citizen. Business acts For An Exciting Opportunity, Especially For You!
- cperciva 15y agoAlso, the cash advance interest differential for credit-cards, which is higher, and only paid off after all other charges are covered, rather than any sort of temporal ordering FWIW, in Canada credit card issuers are required to apply payments to whichever balances you're paying the highest interest rate on -- it's not even temporally ordered.
- eftpotrm 15y agoAre you complaining that they're required to service the more expensive (to you) debts first? Why? UK banks used to have a god racket (don't know if they still do, don't read the relevant blogs) where they'd offer 0% balance transfer cards but with expensive purchase interest. Then, any payments you made went to paying off the oldest debt first (on which you were paying 0% interest) leaving the purchases quickly gaining high interest payments.