Credit Card Automatic Payments from Planck's Constant

Forty of my Credit Cards
Photo by: k9ine

As a computer programmer since 1975 I have always followed one simple rule: "Be the Client." That is to say, forget about programming principles and nonsense such as make a plan, break the problem down, etc. A good programmer already should know how to save storage space, reuse subroutines, etc. These are merely techniques that can be applied to all programming problems. What I am talking about cannot come from techniques; I'm talking about what is unique to the program at hand.

It is no different than a portrait painter: he uses the same brushstroke techniques for all his work, what's different is the client: how will he represent the client?

I write computer programs without flowcharts, without committees, without plans. I find out what the client needs, how he runs his business, and then I figure out how his business should run if he wants it to be run on a computer. For example, if a businessman keeps his inventory on 3 by 5 index cards then if he automates his inventory system the program should not simply print out 3 by 5 index cards; there should be a complete mental and physical change on how he maintains inventory. Where before he might have re-ordered material when he noticed empty shelves, the new system should notify him when he should re-order so that new items come in just as the last one is leaving the shelf. A computer program should enhance his enterprise, not merely make his old way of doing things more convenient. It should generate new ways of doing business.

It seems as if most big businesses in this country ignore what consumers really want, or so it seems when you look at how they have programmed their online businesses.

Every single Credit Card company I do business with offers some or all of the following automatic payment options:

Pay the Minimum amount due as shown on your last statement

The full Statement Balance as shown on your last statement

Pay a fixed amount each due date or the statement balance, whichever is less

Option 1 is horrible. By only paying the minimum amount due, you may end up making payments for years without seriously putting a dent in your remaining balance.

Option 2 is obviously the best if you can afford it.

Option 3 is the most dangerous. Let's say your minimum payment due most of the time is about $30.00 but you like to pay a little more than the minimum so you set your fixed payment each month to $50.00. This works fine unless you make a large purchase which causes the minimum due to go to $55.00 in which case they will only pay $50.00 and then charge you $29.00 or more for a late payment. Then you have to worry about the instances in which the credit card company changes how they compute the minimum monthly percentage. They usually send a notice that they are going to increase the monthly percentage due but it invariably is hidden among hundreds of lines of small print. Again, if your fixed amount is less than the amount due, you will be charged a late fee.

Options 1 & 3 are in the best interests of the credit card companies. What's missing is an option 4 to pay x dollars above the minimum. If consumers had this option they could have the benefit of option 3 without the possibility of a below-minimum payment and without the interminable prison of unending monthly payments.

But an option to pay a fixed amount above the minimum is precisely the last thing that a credit card company wants you to have. They want you to pay the minimum forever and they want the possibility that even with a fixed automatic payment you might still make a below minimum payment and thereby trigger a late fee.

That every credit card company lacks this option only shows what complete contempt they have for their customers. Not the way to run a business.

Although misusing your credit cards can lead to money problems, there are some money-making opportunities with credit cards: for example, my family is going on a cruise to Bermuda in June; we used the Discover Card to pay for the trip and we received a 5% rebate on the cost which came out to a rebate from Discover of $500.00. Other cards offer discounts or rebates on hotels, gas, travel, etc.

If your credit is good enough you'll also receive offers for balance transfers with low or no interest for a certain time period. If you have enough cards you can sometimes shuffle these around so that the total, real interest you pay is less than what you can earn in a savings account. Indeed there have been numerous times I have taken a no interest balance transfer and taken the money and put it into a money-market fund and made profit.

If Congress passes new legislation forcing credit card companies to apply payments to the highest interest rate balance, then we might see a diminution of such offers. If our government keeps spending money and legislative energy on trying to figure out how to protect stupid consumers, it won't be long before intelligence will not be needed to live a successful life. America then will eventually be filled with Liberals and Muslims.