Yet Another Terrible Blog Named After A Dog

So it's Saturday night, and instead of being somewhere working on getting laid, I'm at home watching Religulous and reading shitty personal finance blogs. Naturally, I'm a little pissed off. So, Money Beagle, prepare for an even worse shitting on than I usually dish out. This week's crap is bitching about the US credit card companies response to some proposed changes.

A couple of notes before I get into it. First of all, the Canadian Personal Finance Blog's post called New Credit Card Rules Good, But... could easily be shatted upon rather than Money Beagle. It's just as bad, and chances are I'll give that blog the ass kicking it deserves some day. Just not today.

And secondly, I'm shitting on Money Beagle. As in a breed of a dog. A DOG. Get it? I just want to clear up for the record that I really don't hate dogs, I just don't think they should be allowed to have blogs.

Now onto the fun.

MSNBC and other outlets are reporting that credit card companies are prepared to react to the legislation being proposed that would restrict their ability to charge what Congress calls excessive rates and fees to those borrowers who have risky credit. This would result in lower revenue for the credit card companies.

Congress turned out to pass sort of a watered down version of the legislation. Just to get that out of the way.

The reaction of the credit card companies is to target another group, namely the type of borrowers who pay their credit cards every month. The credit card companies justify targetting this group by saying that people who use their cards with no annual fees, paying them off, while collecting rewards along the way do not add value to the bottom line.

Look, nobody thinks that credit card companies make nothing off those people. That's just fucking stupid. It's just that they don't make very much. These people are kind of the credit card equivalent of that frugal knob who gets a side of fries and a glass of tap water at a restaurant, cause he's too fucking cheap to get an actual meal.

I'm just going out on a limb here, but I bet Money Beagle has done that.

Among their proposals:

...

And my personal favorite: Charging interest from the day of the transaction regardless of whether the customer has paid off their card every month

Okay, I'll admit this is kind of a stupid idea. I'm pretty sure that they're not really serious about this, it's just posturing.

If they actually do follow through on this (which they won't, but just stay with me for a sec) then wouldn't those people just stop using the fucking card? Then, the credit card company would be free to charge more to their best customers. Sounds like a pretty good fucking business plan to me.

I think that the claim that they don’t make money off those people is baloney.

It's almost like they have other customers than the ones who pay off every cent of their balance every month.

Fuck. Okay, I'm only going to explain this one more time. If you force a company to make less profit on their best customers (minimum balance payers) then a logical course of action would be to make more money on your worst customers (people who don't pay a dime in interest and get rewards besides). This is what the kids call common fucking sense.

Remember, credit card companies charge the merchants 2-3% of the transaction cost. Even if they pay rewards that equal 1.0-1.5% of the transaction costs, they’re still pocketing half of what they collect from the merchants.

Ah, the old gross margin argument. I like how it completely ignores any expenses the company might have. I expected more from a blog named after a dog. Once again, you've failed to even get close to my expectations. For shame.

I guess credit card companies are willing to play chicken with people who pay their cards off every month, not realizing that they will simply lose 100% of their profits, instead of keeping the 50% that they get right now.

FUCK. I'm not going to respond to this again.

If you're any indication of us who pay off our balances each month, I don't blame them for wanting us gone.

I wish the credit card companies would realize what the rest of the country has been living through for quite some time: We are in a recession.

RINGGG!!!

Hello?

Is this Robert W. Selander, CEO of Mastercard?

Yeah. Who's this?

It's Nelson, from that awesome blog No Communism

Oh, hey Nelson. What's up?

I just read something in Money Beagle that I wanted to share with you.

Sure. What is it?

We're apparently in a recession.

Really?

Yeah.

Holy shit. Are you sure? This is the first I've heard.

I think you should just assume it's true. Money Beagle is a pretty smart dude.

Thanks Nelson. By the way, when are you going to pay your bill?

Uhh... [Click]

That means we’re making less money. Times are tougher. We have to make sacrificies and even then, realize that our net worths have gone down and will probably increase at a smaller rate than they did in the past.

Geez. I bet Money Beagle is a bummer at parties.

Once again, I'm going out on a limb here, but I'm pretty sure they don't give two shits about that.

Why can’t credit card companies accept that they’ll just make less money instead of acting like this move will send them into the poorhouse.

Yeah! Just fucking accept that you'll make less money! Just bend over and take it in the ass! Don't bother to make business changes that will maximize your profitability! Only fucking dumbasses would do something like that! Stupidheads!

Yes, credit card companies have to answer to shareholders, and shareholders like higher profits. But, since most of the credit card companies are attached to banks, banks that have seen huge dips in profits and stock values, is it really going to send investors reeling if credit card companies cut their profit forecasts in half?

There's always that one statement that's just the icing on the cake. In this case, it's a whole paragraph.

Which credit card company is attached to a bank? Mastercard? Visa? American Express? Discover? If a credit card company was "attached" to a bank, why would it trade under its own ticker symbol?

Also, if you bothered to research the fucking topic, you'd have discovered that credit card companies are viewed by the market as just the facilitators of the system, while the issuing financial institution carrying the underlying debt. (With the notable exception of American Express who carries the debt themselves)

And yes, it will send investors reeling if credit card companies have to cut their profits in half! You're going to make HALF as much money as you told investors you would. They're going to be a little bit excited about such a shitty performance.

Because that’s what it boils down to. Credit card companies know full well that they’ll be able to stay in business and make money even if the legislation passes, but they also know that they won’t be able to rake in record profits anymore.

Yeah fuckers! Money Beagle is in charge of your profits now! Sorry about your luck.

I also like how deeply offended on a personal level this guy is. Does he jerk off over his reward points or something? He's really taking this thing personally. I half expect him to burst into tears.

Well, guess what, credit card companies? It’s time to join the club! Americans have lost money on their houses, have had to pay much more for food and gasoline, have had retirements cut while health care costs are going up. In other words, the exact thing that you (credit card companies) are trying to fight off is something that the real world has been dealing with for awhile now.

Credit card companies have to deal with congress changing the fucking rules during a god damn credit crisis! It's not all sunshine, lollipops and rainbows for them right now. Plus there's that whole issue of higher defaults, thanks to the economy being the shits.

It’s time to suck it up and join the club. Yes, you might only be reporting quarterly profits of $500 million now instead of $1 billion, but somehow I think the sun will still rise. I think you’ll be able to make it on that ’shoestring budget’.

Three paragraphs ago, Dumbass Beagle claims that banks and credit card companies are linked, and that bank have seen "huge dips in profit" and then says that the credit card companies are ridiculously profitable. Nicely done doucher.

Look pal, this isn't fucking socialism. A company doesn't owe it to you to make less money just because you think they charge too much. Sometimes the world doesn't conform to what the fuck you want it to.

I know Money Beagle's mad because he might have to pay extra to earn his horseshit reward points. Maybe instead of jumping to conclusions with bullshit blog posts, he could just not give a shit like the rest of the world.

Shit. I'm so worked up I can't even jerk off. Thanks a lot shitbrick.