imported post
I had a credit card problem, with one company in particular, MBNA. Let's just say I had a balance, and MBNA thought it was a good idea to slam the interest rate to 27.98% (Not kidding) and pull some underhanded things to generate extra fees, and so on and so on.
After a day of yelling at them on the phone arguing about my interpretation of my rights and their interpretation of theirs I spent a good while reading up on my good friend, MBNA. Ok, guess what, they have clever Lawyers and every scummy trick they pull is legal and their interpretation of their rights trumped mine. So, noodling around the MBNA website I went to investor relations and ordered a copy of their prospectus for 4 years back just to waste their postage.
Wow, what an education those prospectuses turned out to be! MBNA is a pure debt generating machine. They go around and make offers to special interest groups and offer them a cut if they will give MBNA their member lists. They might go to Tom and tell him what a good guy he was, and they wanted to give TSPTalk some money with it's special TSPtalk MBNA Visa card. Tom would agree sure,and then MBNA would call us all and say that Tom endorsed them and they would like to offer us TSPTalk credit cards with 1% of purchases going to TSPTalk.
It works, too! All through the prospectus they listed all these special interest groups (Nascar, colleges, foot fetishists...you name it there'sa VISA/MC for them), how many joined and how much of a balance they carried. The amount of cash MBNA is pulling in staggering, in 2003they held 112 million in reserve for credit losses.
Another neat trick they pull is loan securitization. I'm not anexpert so I may not understand it completely, but the way I read it, they build up a certain mass of money owed to them, and then sell theloans in lots to other corporations. MBNA still administers theloan and I think they still skim theinterest off the amount,but the principle is owned by whomever bought the securitized loan. Debt itself becomes a product to sell and profit from.
These credit cards are really pretty evil if you letthem be. Thecompanies behind them are also wickedly clever, and reading MBNA's prospectus gave me a new prospective on the debt machine and why it's so critically important to use credit and not let credit use you. You should read it, too, and thereby use more of MBNA's postage. Actually if I ever get to the stock trading part I may buy a share or two of MBNA because I know I sure can't beat them. Boy I do hate them, though.:X
I had a credit card problem, with one company in particular, MBNA. Let's just say I had a balance, and MBNA thought it was a good idea to slam the interest rate to 27.98% (Not kidding) and pull some underhanded things to generate extra fees, and so on and so on.
After a day of yelling at them on the phone arguing about my interpretation of my rights and their interpretation of theirs I spent a good while reading up on my good friend, MBNA. Ok, guess what, they have clever Lawyers and every scummy trick they pull is legal and their interpretation of their rights trumped mine. So, noodling around the MBNA website I went to investor relations and ordered a copy of their prospectus for 4 years back just to waste their postage.
Wow, what an education those prospectuses turned out to be! MBNA is a pure debt generating machine. They go around and make offers to special interest groups and offer them a cut if they will give MBNA their member lists. They might go to Tom and tell him what a good guy he was, and they wanted to give TSPTalk some money with it's special TSPtalk MBNA Visa card. Tom would agree sure,and then MBNA would call us all and say that Tom endorsed them and they would like to offer us TSPTalk credit cards with 1% of purchases going to TSPTalk.
It works, too! All through the prospectus they listed all these special interest groups (Nascar, colleges, foot fetishists...you name it there'sa VISA/MC for them), how many joined and how much of a balance they carried. The amount of cash MBNA is pulling in staggering, in 2003they held 112 million in reserve for credit losses.
Another neat trick they pull is loan securitization. I'm not anexpert so I may not understand it completely, but the way I read it, they build up a certain mass of money owed to them, and then sell theloans in lots to other corporations. MBNA still administers theloan and I think they still skim theinterest off the amount,but the principle is owned by whomever bought the securitized loan. Debt itself becomes a product to sell and profit from.
These credit cards are really pretty evil if you letthem be. Thecompanies behind them are also wickedly clever, and reading MBNA's prospectus gave me a new prospective on the debt machine and why it's so critically important to use credit and not let credit use you. You should read it, too, and thereby use more of MBNA's postage. Actually if I ever get to the stock trading part I may buy a share or two of MBNA because I know I sure can't beat them. Boy I do hate them, though.:X