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Get back this conversation we've been having about credit.
Credit purchase debit essentially I'm an Adam Levin joins us now credit dot com are you good to see again I thought we were talking you know over the last 1015 minutes about this whole idea debit cards.
Over taking credit -- some growth Morton.
Better and stronger growth among debit cards which I guess is that surprising.
But what about from the bank's point of view they're turning this into profit has a thousand working out for them I still think.
Get better change change things on debit -- smashing when -- use the one with the logos and so as a result they'll always find a way to do it then and with a debit cards they still have fees there's ATM fees and all sorts of other things they have.
And so it's a continuing controversy debit cards are now in the lead.
The did that you have a good news about a debit card -- it's kind of a self executing control mechanism for consumers can only spend what's in your account.
The bad news is that if you lose or have your debit cards stolen the protections that are there for your credit card.
Are much better than the ones that are there for your avatar -- that's a downside.
We're talking about that in fact a lot of like I don't think realize that you have to notice the the problem within a certain amount of days if you don't think you're liable for certain yet the longer it goes the less they're gonna cover -- with your credit card.
Here we are protected a lot more.
It's either zero or fifty and the other problem the debit card is let's say the institution says they'll give you the money back the question then doesn't become if but when.
And if that's your grocery money red money your gas money -- school money could have a big problem while you waiting for -- might be restored your cap.
And with the Democrats you mentioned that it's it's easier for consumers to keep track of their -- perhaps they can't overspend their account.
So what does it mean for the banks because we need to -- credit cards they get to charge interest on that money that was borrowed and you people may pay the minimum but it may not pay it off -- banks losing that interest payments that they were getting a debit card usage -- -- and -- what are they doing account.
Because they have different fees say they have a debit cards and SOS resolve that they always find new ways to make it -- -- overdraft fees -- people do already -- they have a lot of wherever overspending fees and things like that that it'll become controversial by the -- in the net you know and so back and forth in Washington goes -- -- what -- what's your take on these overdraft -- well what what's really happening now with the with the over limit -- in particular is the fact that.
You know now under the new law you can only charge an over limit fee if the consumer consents in advance.
To be allowed to go over the limit and then be charged defeat right others that he should be allowed do in the first place right and you know -- today we know in the old days they would just.
Declined that the charge if you were to close to the limit.
Then they decided not to they wanted to make as it if it -- they were good guys but the truth is spend a lot of money limit they chose to -- So you know and it's business.
-- may not agree with it but it but -- business and recently -- -- a number of credit card companies announced that they were eliminating.
-- -- -- But while they were doing that people have to remember all fees are fungible so they were eliminated over limit -- But raise.
The interest rate 4% -- a group of people like American Express did.
Or race late fees and another group of people.
And chase announced they were there's going they were eliminating arbitration -- is coming it's very interesting moves that are being made right now about credit card.
Was get him one on one end to the other -- It is so it can you -- a tell us a little bit about what might be best for the consumers looking I mean it's just a personal choice really feel it debit or credit -- -- is there one that's -- more advantageous.
I think -- cars are good if you were simply want a card that you can go and get cash with.
You certainly wouldn't want -- get a cash advance off credit card because the rates and cash advances are terrifying relative to the rates on purchases.
Debit cards are good because again it's a self executing control mechanism for consumers.
The bad news is that day.
Had the debit card as the gateway to your bank account and an identity theft situations your bank account could go be the gateway to your life.
And the liability issue.
I also recommending consumers regardless whatever you use -- -- if using credit cards.
You need to look at your bank accounts in your credit card accounts every day for five minutes on line.
Just make sure every transaction that you see -- your transactions so it's not an early warning for an identity theft.
And more importantly it's a reality check it forces you to look at -- spending to think about what you're spending and where you're spending your money.
It gives you an idea how close you -- coming to that magic credit limit -- because a lot of the lenders now the credit card companies controlling their lists of borrowers.
Looking to see who was having an usually high activity.
And looking to see who's coming close to the line and then you have a -- -- account closings and credit limit reductions which is going on as well as part of the school.
Browse and right into the part that -- didn't think about as much that's happening before that you go out and -- today from from Capital One and I'm sure a lot of people in the same boat here that delinquencies are going up they went up they have their July numbers up for.
Four point eight.
Percent was that I was the rate I should say vs four point seven the month before -- higher -- was right -- is that going to be continue to issue.
For the rest of the year I think it is delinquencies a bigger problem you think yeah I think it is I think part of it's because of the job loss job situation and and the other part of it is that I'm still not convinced.
That a great deal -- problems we're seeing in the credit card area.
With people going off the tracks has to do with the credit card companies themselves and that is especially as they jockey to form around the regulations.
You have a consumer consumers been making minimum payments more than minimum payments that are on a budget they're on a plan -- on track and all of a sudden they find out their minimum payment has been doubled.
Not so bad because anything we do to help people reduce balance is as good.
But then they find out that their interest -- -- jumped by ten full percentage points.
That become suffocating.
That's part of the continuing problem consumers are going to be facing -- here for sure and stuff OK Adam good to see again thanks for coming back thanks for having Adam Levin credit dot.
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