They Don't Get The Hint...

As I caught up on mail over the past few weeks I noticed something...a slew of Credit card offers. Now this is nothing new as credit card companies are trying to find anyone with a pulse. It costs over $30 (probably closer to $100 now) to acquire a new credit card customer, and most of those have to be rate flippers.

So like I said nothing really new, except that I noticed I am getting bombarded by Chase Visa and American Express. I am now getting multiple offers...per week from both of them. It costs, even with great marketing consolidation and bulk, probably between 40 and 50 cents to contact me, just through the mail! $20-30 per year in junk just to me!

Now I know I can save trees and my mail carrier and probably kittens in a third-world country by blocking my adress either through the DMA (Direct Marketers Assc) or True Credit, where I get my credit report, but truth of the matter is I like to see the offers.

One, it is a great early warning system about how your credit ranking is currently. The offer reflect your credit FICO band...I have crept into the 700 band now, so we are getting pretty darn good offers, but not the Captain Insano ones (you need 720+ to get those). Second, I like being able to weight moving debt around if I can save money and I am not above call my card company and grinding them for a better deal.

So we dance...

Dance the "I may ask you out, but I am waiting for a better looking gal (or fella for the ladies)" sort of dance. However, if they want to save some money I will tell them NO for $10 :)

How's your mailbox?

Personal Finance QuickTake: Visa IPO

Visa is set to launch an IPO (Initial Public Offering) before the end of March according to the AP. Based on the initial numbers this may be the largest IPO ever. The offering is expected to raise $19 Billion , if it does it would signal to Wall Street that the market is back up and running.

Visa's IPO will have little initial affect on its customers, but the banks that issue the cards are expected to share a $10 Billion windfall. This influx of cash could keep banks from raising rates or cutting back on consumer credit lines.

Both MasterCard and Visa are not banks nor lenders, they are transaction processors that get paid fees by the issuing banks. This is different from American Express or Discover that offer and back the banks themselves.

Visa is the largest US processor of these transactions with over 50% market share. Last year Visa processed 44 Billion transactions, or $3.2 Trillion Dollars, nearly double MasterCard. Visa will be the last major credit card provider to go public as MasterCard and Discover went public last year.

What this Means:

Visa gets paid for the transaction we place whether or not we pay them off the next day or not. But 44 Billion transactions? That is 7 transactions for every man, women and child on the planet! $3.2 Trillion equals $533 for every man, women and child on the planet! And these numbers are only Visa. Add in MasterCard, Discover, American Express...

This is really amazing! This is an industry that is really younger than 50 years old! Sadly this is a very scary amount of transactions and debt that we as a people are ringing up. At some point it becomes overwhelming and could lead to massive amounts of bankruptcies and people not saving for their futures.

Are we moving to a non-currency world? Are you breaking your debt chains or adding to them?