Height of stupidity

[MBE2017]

So today MRS MBE received her new credit card in the mail. It’s very rarely used, paid off in full if ever used, kept in the safe for any potential emergencies since I prefer to pay cash for everything, yep, I am old fashioned.

On seeing the envelope I noticed it had been opened, then re sealed. To add to my worry, on reading the accompanying blurb, the company has already activated the card, all that is required is to sign it. In today’s world of trying to mitigate risk, surely activating the card should be a requirement of any decent company?

I assume most places still require the pin for it to be used, but I also expect some clever nerd can get that if required. Probably because it is hardly used and paid in full each time, they also increased the credit limit. It is so nice to see responsible lending based on affordability in action, the company concerned have no income details updated for over a decade.

No wonder so many people can go into debt when it is made so easy to do so.

 

[Paul Kelly ICHYB]

I assume most places still require the pin for it to be used

Not online!

 

[Ian J]

Probably because it is hardly used and paid in full each time, they also increased the credit limit. It is so nice to see responsible lending based on affordability in action,

I have a Barclaycard that I seldom use and last year they reduced my credit limit by two thirds so they don't all act in the same way

 

[JEREMY HAWKE]

I have a Barclaycard that I seldom use and last year they reduced my credit limit by two thirds so they don't all act in the same way

I understand that you lendability is now also judged by your behavior on Social Media and FORUMS ???

 

[IanSuth]

I was paid a substantial amount by MBNA and Barclaycard abut a decade ago

I received a letter from Barclaycard saying they were refusing my application for a CC, which confused me as I had not applied for one.

I got in touch and couldnt pass their security tests to actually get any info - after a lot of pestering and googling I eventually managed to get through to their fraud team. It appeared MBNA who i had a card via had really bad security practices, such that you could get a few bits of info through various means without any personal knowledge then ring up with that info and gain full enough access to get enough info to then approach Barclaycard to open an account, luckily Barclays computer declined me as i had so much unused credit it couldn't understand why i wanted more.

MBNA compensated me and paid for 2 years Experian monitoring for me, and at that point i had nothing but praise for Barclay. We had agreed they would flag my name on their system in case any other attempts were made. (they still wouldnt admit there was an issue with their security policies despite it being common knowledge but hey ho)

3 months later i received a pre-populated credit card application form and contacted fraud thinking someone was trying it on again - Nope their marketing department had accessed my details form their internal systems and decided filling out all those details on a letter and posting it was a great idea and despite my name being flagged on Experian as possibly compromised. I received an apology and a promise i had been removed from all marketing databases.

Guess what happened twice more over the next 6 months !!!! (Hence the compensation from them after a formal complaint after the 1st instance with double on the 2nd time)

CC companies exist to make money and nothing more - security and good lending practice are subservient to that

 

[Ozzy]

No wonder so many people can go into debt when it is made so easy to do so.

This is a pet hate of mine. I've known significant debt growing up so when I see this sort of practice it really riles me. It's not just lending either, gambling companies are the same which is why I've put a ban on gambling ads to be shown on this site (they pay loads more but irrelevant).
Credit cards co's get you on using them and then they creep up the lending, encouraging you to borrow more and more. Yep, no wonder so many people find it so easy to get into debt.

I have a Barclaycard that I seldom use and last year they reduced my credit limit by two thirds so they don't all act in the same way

In exactly the same way @MBE2017 use their card I have a CC which is cleared every month. I actually do use it exclusively for everything purely for the increased protection they offer; and clear it at the end of each month. I haven't carried cash for quite a few years now and cut up my debit card when it comes through the post.
I digress, Natwest who my CC is with reduced my credit limit a couple years back because likewise they found I wasn't using it all so brought it down to about half of what it was.

We had agreed they would flag my name on their system in case any other attempts were made. (they still wouldnt admit there was an issue with their security policies despite it being common knowledge but hey ho)

For slightly different reasons, I also have one of those flags against my credit record and I'm glad I do. It happened as my car insurance company was subject to a cyber security breach and contacted me telling me it had happened, with details explaining how to put this flag on my record. Now I'm glad I have, any attempt to ID me or take out any credit red flags. It works as I had to authorise a mortgage for the local Chamber of Commerce (I chaired the finance committee) and the bank, Barclays, had to come back to me because of it which was a nice test.
I'd recommend it to anyone if you're worried about identity theft or fraud, and are happy for the inconvenience if you ever do need to apply for finance or deal with a bank. Personally I take the inconvenience for the peace of mind.

 

[MikeJ]

Based on the guy I was chatting to in the pub the other day, the height of stupidity is around 5'9".

 

[MBE2017]

Many years ago I had one of these credit flags put onto my account, someone had got hold of my details, and was applying for numerous credit cards, approx six over a month. The credit card companies and Police did not care, since the flag stopped the applications going through once checked with myself, but it was annoying for myself.

In the end I visited the “new address” I had applied from, and after leaving my mark on the guys face the applications stopped.

 

[MOIC]

In the end I visited the “new address” I had applied from, and after leaving my mark on the guys face the applications stopped.

Seems fair to me!

 

[japancool]

I pay my cards (business and personal) off every month in full. One of them states you're eligible for a credit limit increase after 5 months... I notice they haven't bothered to offer me one. On other cards I used to have in the past, I didn't pay off in full and got regular credit limit increases.

I'm pretty sure they only offer you an increase if you look like you're relying on credit - which is nice for the cardholder until it's time to pay it back.

I would like a decent 0% foreign currency commission card though, for when I travel.

 

[Ozzy]

I would like a decent 0% foreign currency commission card though, for when I travel.

We’ve used a Revolut card when travelling in the past. Don’t know if it still the case now but previously it was 0%.
It was pre-pay though and not credit.

 

[Ian J]

I would like a decent 0% foreign currency commission card though, for when I travel.

I have a Virgin Money card for overseas travel as they don't load the exchange rate like most other cards do

 

[Ian J]

I pay my cards (business and personal) off every month in full. One of them states you're eligible for a credit limit increase after 5 months... I notice they haven't bothered to offer me one.

I have had a Sainsbury credit card for about 12 years which I pay off in full every month and they have never suggested an increase either. Presumably they realise that as I never get anywhere near my existing limit I don't actually need one.

Incidentally for regular Sainsbury customers if you use their own credit card you get double Nectar points for all purchases in store

 

[IanSuth]

Everyone on here is a greater than average target for fraud

Why ?

Because your names are at companies house

I was told by the Barclays fraud team a standard trick is to take names from companies house and cross reference with the genealogy databases published by the mormons, if covered then they have name, current address, DOB, place of birth and mothers maiden name. That is enough to be starting with

In my case likely as i have an annoying slight relative trying to build a massive family tree this is how enough of my details became public to allow the rest to be weedled out

I have it set with Lloyds that any over counter transactions have to be with photo ID - no hassle to me as I have my driving licence on me anyway

 

[Paul Norman]

As mentioned a lot above, security is not really a priority with card issuers.

Getting cards out there, getting them used, and getting some level of debt and hence very high rate interest charges is the name of the game.

And the odd default is part of the cost. I suspect that cost is worth it for all the profit they can make.

Is that a good thing? No point in asking me. I am old. I think it is a bad thing. I like to pay off cards each month and have no debt, if possible.

 

[IanSuth]

As mentioned a lot above, security is not really a priority with card issuers.

Getting cards out there, getting them used, and getting some level of debt and hence very high rate interest charges is the name of the game.

And the odd default is part of the cost. I suspect that cost is worth it for all the profit they can make.

Is that a good thing? No point in asking me. I am old. I think it is a bad thing. I like to pay off cards each month and have no debt, if possible.

And that is the biggest issue i see with the current student loan system.

I was one of the last students to have it the old way, y first year was the first year of frozen grants and a stop on housing benefit in the summer holidays and my second year saw the first student loans (about £400 and fixed at an interest rate of inflation). I have always minimised debt, as soon as I cleared my student overdraft (about £1000) I have since only had a mortgage and paid of CC in full each month.

Modern students have 3x£9250 tuition fee loans + up to 3x£12.3k maintenance, that is basically £65k and the interest starts day 1 of their first year when the first part of tuition is paid and that interest is RPI + 3% - a huge debt to start adult life with and irrelevant of whether you will ever pay it back it sets in the mind the idea that a debt is fine as long as you can service the repayments as if things get really bad you just pause repayment through dropping below earning threshold. A really bad lesson in life

 

[Paul Norman]

The government know that a big amount of these loans are not going to be repaid.

And that is not their problem. That will be the problem of the Chancellor on the day they default. It's a way of massaging the figures and making it look like their is funding for higher education.

And as for the students - they grow up in these world. My daughter is problem carrying around £80k in debt from her education. She is paying it back from the decent salary she has. If that changes, she doesn't have to pay it back any more.

 

[DontAsk]

If it looks like a tax, is administered like a tax, it's a tax. The government should just be honest and call it a graduate tax.

 

[IanSuth]

The government know that a big amount of these loans are not going to be repaid.

And that is not their problem. That will be the problem of the Chancellor on the day they default. It's a way of massaging the figures and making it look like their is funding for higher education.

And as for the students - they grow up in these world. My daughter is problem carrying around £80k in debt from her education. She is paying it back from the decent salary she has. If that changes, she doesn't have to pay it back any more.

The problem is that with the public sector being such a large employer the interaction between posts requiring a degree, the salaries thereof, the threshold for loan (graduate tax) repayment and % of loans actually repaid then becomes a big thing

Last i saw 5.6m or 1/6th of the uk workforce is employed in the public sector - the NHS is the uk's largest employer and a large % now need degrees - that means if you have an inflation rate rise and the loan interest is tied to inflation (rpi currently) then those people will feel poorer, they will push for a meatier payrise. The greater the percentage of them whose feeling of wealth is inherently tied to inflation the greater the willingness to fight for a payrise. Public sector pay inflation is a huge driver of inflation and you get a vicious circle

Calling it a graduate tax rather than a loan might break the link a bit - but they wont do that, not least as the poorest students shoulder the greatest debt at present whilst a straight grad tax charges all grads the same, a low level nurse, plod who never makes sergeant or average council employee currently gets to pay the 9% for all their career, whilst the child of the bearably well off person (£58k+) just has the 3x9.25k tuition, likely gets a hand up into a decent job (lots of research showing this) and pays it off in a few years

 

[MBE2017]

Personally I believe this strategy to get people into debt, and it is a deliberate one, from a Gov perspective has two main purposes.

One, it helps massage figures and making people believe things are better than they really are.

Secondly, and more importantly from a Gov perspective, it means those indebted citizens lose a lot of freedoms, freedom to move, ask for rights, risk going for better jobs etc, since they need and rely on their existing job, they become too scared to live anymore. Lose their small salary and they risk losing everything.

When you gain financial independence, living within your means, you can do all the things you want without too much fear. There is a lot to be said returning to the save up for it generation, mortgages I can accept as a necessity but even those are being stretched to 35 plus year, and the bank of mum and dad mortgaging their house to help their children is yet another example of the policy.

Kids used to wait for their inheritance, now the banks actively encourage asking for it early, helping to keep house prices at ridiculous high levels, not making wealth but increasing debt.

 

[tony84]

I used to work for a bank in their credit card department.
What you say is (or was, I left many years ago) standard practice.

Cards in certain areas get sent out via normal RM post, if you like in a high risk area, they get sent out recorded delivery. The account needs activating on the first card being sent out, the other cards ask you to call to activate them but in reality they did not need activating.

If a card is used without the PIN you are protected.
If a card is used online you are still protected as other security checks need to pass.

As for the credit limits, this is a difficult one. Some people are happy to have their limits increased, others less so. When I worked for the bank, I used to review my limit every 6 months and get an increase based on what the system would allow. I have a £10k limit (my income was £17k back then). I still have the card but have reduced the limit down now.

We once had a bloke call up kicking off his card was wrong, so I asked what the problem was. He had ticked the box for a platinum card - it had not passed the score needed. So he asked why he was not then offered a gold card... score for that not passed. He told me he did not want the normal card, I cancelled the account.

What was the difference between all of the cards I (do not) hear you ask... Nothing. The rate, minimum repayments etc were 100% identical. The only difference was the colour of the card. He then called back 2 hours later after being declined by other companies asking for the account to be re-opened... sorry matey, its been closed now. You need to re-apply. I did keep an eye out for his name, unfortunately we did accept him again.