Forum Post: You want to screw the banks? Here's how....
Posted 13 years ago on Nov. 1, 2011, 10:29 p.m. EST by armchairecon1
(169)
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You guys are going about your business all wrong in thinking how you are going to screw the banks... heres what to do.
The primary assumption is: you have enough self control to spend within your limits and enough disicipline to pay off your debt monthly:
For those with a debit card, apply for a credit card with the best rewards (some offer 2%-5% cash back on purchases) - spend as you normally do, and then PAY THE BILL IN FULL.
If you can do that, you can reap the benefits (purchase protection, free money from the cash back which is essentially a discount on the purchase) of the credit card without incurring the costs. The banks will end up subsidize you for something you ALREADY do (ie: spend money).
I have no idea how debit cards ever got popular since they are basically credit cards without any of the purchase protections... and now they were actually going to CHARGE people to use it.. while credit cards were still available. Are people really THAT undiciplined with their spending, or were the banks marketing campaign THAT good?
How about this for an idea to make it real for banks
You barely get any interest on your savings, but your savings is used as leverage by the banks to loan out at least 10 times its amount at a much higher rate. Basically you are loaning them free money that enables them to loan at least 10 times that amount an make huge interest profits
When you take your savings home you take their leverage away. In time they will realize that it is not a one way street for them. They need to start paying some interest and start sharing the wealth
This post was based on this video. It truly explains the banking scheme. I am not sure about some of the stuff toward the end but the first few minutes well be an eye opener
http://www.youtube.com/watch?v=gV9A2IGShuk
A must see if you want to know what OWS is about
Nice link!! Here's a must read if you get a chance: Wildfire:The Legislation that Ignited the Great Recession. It's by an average American fed up with the system and determined to change it.
I guess I'll have to get it. I keep hearing about it. Just curious, does it compare what's happening to today with what happened them?
I read a timeline type history that went from 1920-1940, it was enlightening. It is almost as if it was used for a blueprint for today, especially corporate taxes and protections through the highest courts
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
I haven't heard this quote before. If you go to the following link you will know why Ford made that statement
It is incredible that this has not been taught to the general public. Maybe you know how the banking industry works. I didn't
I don't know about the stuff toward the end but the front part of it is true and mind blowing
http://www.youtube.com/watch?v=gV9A2IGShuk
I urge all supporters to educate themselves as to how banking truly works. they will need to seek out alternative sources of knowledge to get to the nitty gritty of the evils of the modern banking system.its global, entrenched, and will be difficult to overcome. heck they killed Kennedy and Lincoln to keep it going. Here is another quote for you, i hope you heard this one before "Give me control of a nation's money and I care not who makes the laws".- Mayer Amschel Rothschild(1744-1812)
These are truly days of revolution (change)
Throughout history it was always the wealthy that controlled the message. They owned the technology and had the money and means to propagate (or not) their messages
Today we have arrived at a new paradigm. Information is being freely distributed and the rich and powerful can’t stop it without exposing themselves. People are starting realize how they and their government are being manipulated and controlled. I don’t know where we will end up, but we will know who the power brokers and thieves are
http://www.youtube.com/watch?v=1pKXMcfx1d8
Here is a skit from Kids in the Hall about Wall Street
I don't know about the in the US but in Canada, most banks have been charging fees for debit cards for years. In order to use a debit card without charges most banks require you to have a min of $1500 in the bank. The banks make so much money on debit fees it should be a crime and so many people think this is a charge that they have to incur. Plus using debit is an automatic withdrawal from one's account without any transactions recorded or perks (points, etc.) Using a credit card gives you a written statement...just pay your bill off every month and a credit card can be a good way to use FREE services from banks, etc. Unfortunately only people that live within their budget can take advantage of this. People today have been lured by the banks, advertising, etc. to spend spend spend, get deeper and deeper into debt and pay more and more fees on credit cards, etc.
Don't borrow.
Wow! Spend money and pay your debts. That'll show 'em!
there is more truth in your statement than your ignorance allows you to recognise
Don't you get it? One major reason we are all in this mess is because of the housing crash. The crash happened when mortgage holders could not pay their debts. You can complain that the business practices of lenders were underhanded. But, the system was put in place by our government. Namely Bill Clinton and the Community Reinvestment Act. Now you are suggesting that paying in full will teach the banks a lesson. Do you realize that banks collect a small fee from businesses each time a credit card is used? Using the card earns them money whether you pay interest or not.
i have no qualms with banks earning profits for providing a service (ie: credit interchange fees, interest for loans)
but if you dont want to carry around cash, it is to your benefit to use a credit card over a debit card. there is more profit from a debit card than a credit card for the bank.
if people want to totally withdraw from teh financial system, thats their prerogative.. and obviously this is not targeted towards them
WHAT?!?!?! Aren't you the guy that posted "You want to screw the banks? Here's how...." Now you're saying "i have no qualms with banks earning profits"? I give up...
it was tongue in cheek
whats wrong with banks earning profits (legally) for providing a service?
or are you disagreeing with the banks being bailed out? i agree bank shareholders should have taken their loses and not have been bailed out regardless of the consequences to the economy (IMO a very deep but quick depression)
This post has truth to it. Retail banks make money off a few things: 1. Debit purchase interchange fees, recently slashed drastically via the Durbin amendment (merchants get a larger percentage now), 2) Fees charged to customers who overdraft, etc., 3. Credit card interest payments, 4. Spreads on interest rates (they take cut of interest you earn, essentially), 5. Loan interest on mortgages, cars, education.
Now this is what I don't get about OWS (which is clear most of them don't understand). If you are a disciplined manager of your money, as described in original post - you are not a "good customer" to the bank, because they make no money off you from fees, debt.etc. What one does with his/her money is a personal CHOICE, what you spend and how often. If you get yourself into serious debt, is that the banks fault - or your own for being reckless?
Also, I'm wagering the the OWS doesn't have significant personal deposit savings balances that the bank is making money from. Assuming this, the only way a bank will make money off you is your own poor money management, which again, is your own doing.
You forgot a few things, like fractional reserve banking, and currency trading, “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” - Henry Ford Still true after 100 years
I didn't forget a few things. If you read it again, I specifically said "retail banking," which was the easiest way to describe how banks earn revenue on typical consumers. This is what kills me, people here who can't decipher facts. And then use quotes by famous people out of context, which they don't really understand.
so you actually think all those high flying bank executive million dollar salaries come from petty bank fees?? And FYI I understand Fords quote just fine. I have studied banking in-depth and not at some institution. I went to law libraries and study groups, talked to bankers and regular Joes that work in banks. Let me ask you this, its a basic bank question what does GAAP mean?
I believe that it is an unhip clothing store, struggling as much as OWS. If you follow both of my posts, I have limited those comments to retail banking. In addition, I never even referenced banking executive salaries, let alone support them. Sorry for not saying what you so badly want to hear.
Well I'm saying what you refuse to hear, Banking is banking be it retail or wholesale. Either way the banks need signatures of flesh and blood humans to fund their operations of credit and debit. the banks make profits on both credits and debits. This thread started out as " screwing the banks by using credit cards" Which is the exact opposite of what happens when you place your signature on a credit card slip. You can't be against retail banking and be for other banking services that's not how the game works. People need to have a full understanding of how banking works, when people do realize the truth about banking they will vomit. because then and only then will they realize how long and hard they have been screwed. You were one to endorse this thread "This post has truth to it" you actually think banks make their profits off interest, interest spreads and fees. that is simply untrue. the banks make their millions by creating funds out of thin air via fractional reserve banking and getting fools to fund their own loans. promissory notes are part of the money supply M2 money to be exact.
wow where did you get your "banking education" from.
ask for a refund.
you should pick up a copy of the uniform commercial code, its a good read
Good points. One more time, I was speaking to the consumer interaction that is most common to the everyday consumer - and kept it simple about the retail side ONLY. I wasn't trying to write a manifesto on what banks do with the money they make off spreads - or commercial, or wholesale, or treasury, or IB. My original post was a reaction to so many OWS posts looking toward a tactic that would essentially have no negatve impact on banks whatsoever. People can keep their money under their mattresses for all I care. And your point is probably the best one: "people need to understand how banking works." Exactly - and so many people here have no clue as to the most basic facts, which I tried to summarize in an overly simplistic way.
Please accept my apologies and it is my true hope that between both of our rantings that many people will become more interested in protesting the true enemy of working class people and artists and scholars. those F in' Bankers and their fancy pants scheme to defraud the 99.9%
No worries. At least you sound very informed and rational (which has honestly not been my experience as I looked to learn more about OWS).We probably differ on many points, but hopefully it will force more dialogue.
2 thumbs up
I thought debit cards were linked to a cash account anyway. Like your using you own money!
How about the one where you apply for as many credit cards as possible lets say 20, make sure they all have the same credit limit, say 5000.00. Then write a cash advance check for 19 of the cards for the full amount of your credit limit 5000.00. so you will have 95,000 in you account when all the checks clear. you will have to pay a cash advance charge for each check you write each month the average cash advance charge is 6.00 so it cost you 114.00 per month for a 95,000 loan. Each month you pay off one card with a cash advance check from another card. Remember to start with card number 20 the card you originally didn't use, continue this process every month. Then do whatever you want with the money.
What do you think good Idea or what!
You have failed to take into consideration the interest you will need to pay each month on the money you have borrowed. Go redo your math incorporating the interest and see how many months before this little fraud collapses.
I'll start you off. If you were charged 18% (low for a cash advance), that $95K will cost you $1425 a month in interest.
Don't forget you'll need to pay interest on the cash advance you take from the last card to make the payments on the other cards.
I give it about 3 months before the whole ill advised scheme collapses.
No, I guess I didn't explain it completely, each month when payment is due, your paying each card off with the next card in the stack. Paying each card off within the due date eliminates the interest charge. One card is being paid off with the full credit limit from the next card in the stack! The last time I use a cash advance check was in the early 90ies and at that time there was no interest or transaction charge if it was payed in full at the end of the month. However there was a fee for writing the check. Are you kidding me I would never try this either, I think it might be illegal, but I spoke to a few people over the years that claim it works. I think the only way i would do this is if I were in financial ruin, If I knew I was going to be laid off from my job, I would apply for every of credit cards I could find and when it came time to walk away from my mortgage I'd take cash advances from all the cards and split! So the sons of bitches not only get stuck with an abandoned property, they lose a crap load of cash on top! Then simply declare bankruptcy!
Ah. I've never seen cash advance terms that didn't begin interest accrual immediately. Usually there is no grace period on cash advance.
I checked in was a card I had back in 1982 to 1994, it was with Chase Manhattan Bank. I also had a CD with them in 1982 it paid, get this, 8.95% interest, probably never see that Again. I guess we can scrap that merry go round credit card thing. Ha HA!
Just don't borrow; especially not for consumer crap you don't need.
I'd like to screw the banks by starting my own bank and winning all of their customers.
Check out the national bank act. you can create a bank with 5 other people.
I love my airline miles!
You're really just screwing the merchants... they're paying fees (to the banks) for your ability to pay by card... that's why gas sometimes has two prices... one cash, one credit.
Exactly, if you want to screw the banks...USE CASH. They give you the rewards as your "cut" for what they take from the merchants. You're not screwing them. They get a cut of every transaction you use your card for, whether you pay interest on top of it is another matter.
When you sigh a credit card slip your taking a loan. loans= credit to a bank. the banks can then fictionalize that credit and create 9 times the money out of thin air. “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
that undisciplined. It's harder than you think when you really don't have enough money for all the bills.
I've been doing this for years. It doesn't screw the banks at all, but It's a great deal.
Crazy question but haven't we already screwed the banks? I mean, I've known individuals who took advantage of the easy lending to buy homes, rented them for a period of months or even years, and never made so much as a single mortgage payment. And I've known others who applied for home improvement loans, in excess and addition to their primary mortgage, only to run off with the cash advance in hopes of buying a cheaper home elsewhere in the South. Market depreciation is not a result of the faulty investment vehicle, or easy lending practices, but rather the failure of large numbers of people to make the payments.
Does anybody really think that working class people are so stupid as to allow themselves to be duped by a lender?
Greece did it.
genius, lol
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Iv'e been using credits for awhile and never overdrew any of them. I flew many miles for free and got many other stuff for free.
nothing is free, you just don't understand how it it is paid for... your signature and Fractional reserve banking. = payment for all the "free stuff" and multi million dollar bank executive salaries and bonuses.
Of course, but had I used a debit card I wouldn't have flown for what seemed like free.
So are you involved with OWS for yourself or for the betterment of American society as a whole?
The reason I am against OWS is for the betterment of all societies around the world, not just for Americans. Actually, Americans are the least of my concerns. I'm much more worried about people living in Africa, Indonesia, Cambodia, Vietnam, China, etc... I think it's important to stop this idea of direct democracy as fast as possible and start fixing the problems of corruption that exist all around the world with an efficient method which I believe is controlled capitalism in which people can make as much money as they want (or can), in which government and big business are separated, and in which the government is transparent. Direct democracy is fun in the sandbox or the campgrounds, but it doesn't scale much further than that.
have you ever been to any of those countries?
Yes. I have been living in Indonesia for five years, and have travelled to many surrounding countries. My parents lived in Rwanda for twelve years and so I have many friends in that part of the world. I am from Canada.
I feel a mixture of sadness and amusement when I see OWS protesters with their iPads complaining of their financial situation and I think of the many Indonesians who barely make 50 cents a day and who live in houses made of banana leaves and mud. It's pretty pathetic. Nationally OWS are the 99%, but globally they are the 1%.
If you ever feel down about your economic situation, a visit to a small village in Lombok should raise your spirits. You'll feel like a king.
I've seen China, some of those peasants are totally happy with their meager earnings, its far better than what they had 5 years ago. You can never fix anothers problems while your own house is out of order. Please keep that in mind.
If you think those peasants are "totally happy with their meager earnings", it is because you do not know them, you only know the façade they have shown when you passed by. Asians are proud people, they do not openly and outwardly complain about their problems like westerners. It is a different culture. When you live five years in Indonesia and learn their language, they open up and you learn the truth.
But, you raise an interesting point. If Americans are so unhappy with their medium sized earnings and poor asians are totally happy with their meager earnings, then perhaps you should sell or give all your money away and become a poor farmer in Thailand, Vietnam, China, or Indonesia. This way you will be totally happy like them. After all, everybody wants to be totally happy, right?
I have to say, I am used to the naïveté of Americans, but you surpassed yourself today. Let me guess, you're still under 25 right?
guess again I'm 42, and lived amongst the Chinese for 5 years. you see, when you have nothing because your farmer founder Mao took you for a ride then killed more of your countrymen then the Japanese did you, you tend to be happy with what you have. you don't complain much you just keep working your ass off for the man. in China it just happens to be other yellow men. But you are right about one thing, the Chinese tend to complain in private. their complaints are centered around one thing, their masters are polluting the land of China then taking their ridiculous wealth and moving to greener pastures in other countries like Canada, the US and Europe to enjoy the spoils. In general the people of china feel they are better off than they were 5 or 10 years ago.
You married into their families? How many marriages?
In any case, I guess I prefer not being totally happy, being able to read, and not having to work too hard instead of being totally happy, unable to read, and having to work real hard all day.
Let's chalk it down the us having a different definition of "totally happy".
well yea, that was really my point. I'd really like to see the people of the 3rd and 2nd world countries able to to live a more 1st world lifestyle. but I realize "charity begins at home" and by that I mean we as americans ie: We the People need to "get our house in order" we need to get the monkey of international banking control over our money supply off our backs if we intend to do any good for ourselves and others. Occupy on!
I'm sorry, but your rhetoric is offensive and makes no sense. If you think people working in a ditch all day for a measly pay are "totally happy" I repeat, it's because you do not know these people. Only Americans are capable of thinking up such nonsense.
There are two reasons why Americans are considered stupid by people in other countries. The first is because of a lame stereotype, the second is because people like yourself continue to feed said stereotype.
I know these people I lived and worked with them and married into their families, You just want to look at the world through your overpowering rose colored goggles. When you come from nothing and you can not read, a good hard days work is pretty much all you have to look forward to.
You found a land where peasants with meager earnings were "totally happy". Total happiness is very rare. Indeed, it's 100% happiness. I have to say I never reached such a state of enlightenment.
May I ask why you left? It seems to me you were in paradise. You should have sold all your possessions and started plowing the lands and reach total happiness. Logically, I would say you were either masochistic, not very bright, or sacrificed your total happiness for a cause or another person; perhaps a lover? I would certainly think thrice before throwing away the key to paradise.
Hint: It's not difficult for them to be better off than five years ago. When you're at the bottom of the precipice, climbing is easier than falling.
that's why they have a general feeling of happiness, its easy for the younger generation to remember where their parents and grandparents came from. Seems you feel that people in other lands should immediately rise to the top of the wealth and wellness tree. In China and most of Asia they are still content with having some kind of job, even if its digging a ditch by hand or building a building with bamboo scaffolding, things that spoiled ipad owners would never do. Like I said before, fix America first then you can go abroad like a bible thumper telling those other folks they have problems you want to fix for them, when they themselves are happy with where they are because they actually remember what its like to come from nothing.
Do you realize that each credit card transaction is a credit to the banks that they can fictionalize? “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” - Henry Ford. When Mr. Ford said that 100 years ago,,, he was talking about people like you....
I understand the banking and monetary system just fine thank very much.
Most people would revolt if they truely understood how ANYTHING worked. ie: government, church, unions, private enterprise, where our food comes from, where our energy comes from
but thankfully everyone prefers to live in willfull ignorance and enjoying their consumerist lives in bliss
So if you understand the banking system, why to do support helping the banks by advocating people use credit cards to buy things, thereby giving more debt to the banks? Debt they can fictionalize and use to fund their operations... I mean really, you make mention of "Free Money" in your original post. Nothing is free the banks are turning profits on every charge you make. The banks use your signature to create money out of thin air. I really believe you have great misunderstandings as to how banking truly works in a bankrupt environment.
the free money is money i would earn for using their services beyond what i would earn from spending cash.
obviously the 'free' money comes from somewhere and it comes from the bank - essentially who are paying my rewards from penalizing people who they collect fees from (ie: less disciplined people) the only time this house of cards falls apart is when people are diciplined and banks cannot collect their fees.. and STILL need to pay off people collecting their 'free' money. which is what i am preposing. I hold no ill will against banks for trying to earn money by providing a service.
Also, the money isnt create out of thin air.. it is collected from merchants who pay the interchange services (ie: mastercard and visa.. banks also get a cut) are providing a service for which they are collecting a fee. the electronic networks cost money to operate its like if you go to a mechanic or a doctor.. would you expect them to provide you service for free?
define 'bankrupt environment'.. like morally? ethically? or literally?
the only people who can create money out of thin air is the government
The unites states is bankrupt, has been since 1933 with FDR's declaration of a banking emergency. that banking emergency is in effect today. there is no money. If you want to buy a house you give the bank a note ( M2 money) the bank ledgers the note as an asset and a debt, then they cut you a check for the same amount as the note you gave them. you just funded the loan yourself. Then the bank uses their powers of fractional reserve banking to multiply 9 times the credit you gave them in the form of a note. then they lend it out to other people. The same system is employed in a credit card transaction. Your signature is the power to create Credit.
Yes, I agree the fractional reserve system is a crock of shit.
Im just using credit cards because they earn me free money (relative to me) and they are convenient.
But the use of credit cards doesn't screw the banks as you stated. Through the power of fractional reserve banking using a credit card actually helps the banks more then you may realize...
Do you realize that each credit card transaction is a credit to the banks that they can fictionalize? “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” - Henry Ford. When Mr. Ford said that 100 years ago,,, he was talking about people like you....
I do this and have for years. Don't get too excited, though. They make a lot more in interchange fees than they pay you in rewards.
no doubt, the other option is to buy stock in MA or V so you can benefit from both sides of the transaction.