ARLINGTON, Va. – Scott Bilker would be the first person to saythat the American credit card industry has gotten out of hand, evenas he acknowledges that, properly managed, credit card availabilityand use provides many significant benefits. “The key is in thebalance between credit availability and use,” said the formerelectrical engineer turned financial advisor, “and too manyAmericans don't understand how to keep that balance.” Bilker, theprincipal editor of Debtsmart.com and author of Credit Card andDebt Management: A Step-by-Step How-To Guide For Organizing Debtsand Saving Money on Interest Payments has made a career out ofhelping Americans understand credit cards and the practices ofcredit card issuers, a practice he learned from hard experienceduring his final year in college pursuing his electricalengineering degree. “Americans don't read enough of the fine printof the terms of their cards and they don't call often enough to getbetter deals or terms from their card issuers,” Bilker said. “Toomuch of the time they pay money they don't need to pay or theyleave money on the table in the form of higher APRs,” he added.“Most of what I have done in my books and on the site has beenhelping Americans take advantage of things in their card agreementsthat they didn't even know they have,” he said. Much of Bilker'scard strategy involves pitting one card issuer against others andusing the notoriously competitive card issuing environment to getthe best offers possible from card issuers. But as comprehensiveand aggressive as his credit card advice tends to be, Bilker hasn'trecommended consumers try a credit union issued card, primarilybecause he doesn't hold one and doesn't know anything about them.“I am embarrassed to admit that I don't have a single card issuedby a credit union,” Bilker said, although he admits to having 80cards that he and his wife use in roughly two-week rotations.Rotating the cards every two weeks helps make sure that each cardgets some use each year and that they take the best advantage ofevery card's lowest percentage rate offer. Bilker said there's nodark reason for him not having a credit union card, other than he'snot a member of a credit union. He had been a member of a creditunion back when he worked for the Navy, designing weapons systemsat the military's Lakehurst, New Jersey, facility. But even thenthe credit union failed to make enough of an impression on theyoung engineer that he remembered the institution's name.“Everybody just called it `the credit union',” Bilker said, “I justremember that I had an account there.” Bilker said that he is amember of several large professional associations that might haverelationships with a credit union and he resolved to try to joinone and get a credit union card, if only to be able to report onany differences between how a credit union and bank issue andservice their cards. As credit cards steadily undergocommoditization, Bilker estimated that credit unions offeringbetter customer service and lower fees, particularly in the areasof late fees and penalizing APRs, might make them steadily standout from the competition. If two cards offer essentially the samerates, he explained, it will be the card that offers the bettercustomer service and consumer friendly policies which will likelywin out, he explained. Bilker called the increasingly competitivecredit card industry “frenetic” and explained that it has led to anincreasing level of absurdity. For example, about a year ago Bilkerdecided to put four cards' zero percent offers to the test bymaxing out their credit limits as cash advances. He then took the$62,000 from the cash advances and put it into a money market fundpaying then about 3% for the course of a year before taking it outto pay off the cards as the zero offers were ending. “Essentially,I made about $1,800 from the card companies who usually make moneyoff me,” he said. Despite criticizing many of the practices ofAmerican credit card issuers, Bilker doesn't consider credit cardsthemselves, or credit card debt, to be the source of manyAmericans' personal economic problems. Instead, he lays the blamefirmly on American's purchasing habits, which he said are too oftenspendthrift and poorly thought out. “How many people go shoppingwith a list,” he asked. “Not just to the grocery store, butgenerally? Too many people just shop with both cash and creditcards without thinking about what they are buying,” Bilker said.“And whether I use a credit card or cash, once the money is spent,it's spent. -

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