As we are all painfully aware, healthcare costs have been climbing double digit rates. We’re paying more money for less care. You would think so called “non-profit” hospitals would try to help us out. Not the case with Kaleida Health, which operates five hospitals across the state of New York. They now market lines of credit to cash strapped customers.

G.E. Money’s CareCredit is what they’ve been pushing, which they claim lets you “pay for it over time with low monthly payments that are easy to fit into your monthly budget.” Obviously I am pro-credit, but this is crossing the line. We should not be taking advantage of the sick by profiting off them every way we can.

In 2007, Americans spent an estimated $250 billion on out of pocket medical expenses. It’s no wonder 24% of that spending is going on credit cards.  Many of these people put those charges on their cards simply to earn rewards, and they pay their bills monthly, but still many are not.  Fortunately, none of the major credit cards are marketed for healthcare.  We can try and make the credit card companies the scapegoat, but honestly they aren’t to blame. It’s the politicians, pharmaceuticals, insurance companies, and “non-profit” hospitals like Kaleida that have pushed us to the brink, forcing us to find other ways to pay our healthcare costs.

I find it completely shocking that the large majority of Americans with credit card debt are paying double digit interest!

Do they have any ideas how harmful this is to them? How much compound interest is going to kick their @ss? I’ll give you an example. Let’s say you have a balance of $5,000 for 3 years, and you’re paying 18% on that. That ends up being $3,215.16 in interest alone!

Now let’s take that same amount and put it on a low interest rate credit card. So $5,000 for 3 years, but we’ll change the APR to 9%. You will have paid $1,475.15 in interest.

$3,215.16 or $1,475.15… which one would YOU choose?

Although no one admits it, the large majority of the population chooses the first. Many people think they have no choice, but that’s because they use only the most popular credit cards. Huge companies like Citi, Bank of America, Chase, HSBC, and others spend billions on advertising every year. Is it any wonder why they often have to charge you double digit interest?

“Can a store require an I.D. if I’m paying with a credit card?”

Tell this to your friend… they won’t believe you.  Tell this to your mom… she won’t believe you.  Tell this to a store… they definitely won’t believe you.  But what I’m about to tell you… believe it…

You never need an I.D. to use your credit card!

Yes, I know that sounds crazy in an age of rampant identity theft and fraud, but it’s true.  A merchant is not allowed to require your I.D. for a credit card transaction.  You’re signature is all that is needed.  Whether you’re buying Starbucks or a shopping spree on Rodeo Drive – no I.D. required!

Don’t believe me?  I Know, most stores would never believe me.  I bet the police wouldn’t buy it either.  But I’ll prove it.  Let’s start with the world’s most popular credit card… Visa.  Below is an excerpt from their merchant rules:

“Although Visa Rules do not preclude merchants from asking for cardholder ID, merchants cannot make an ID a condition of acceptance. Therefore, merchants cannot refuse to complete a purchase transaction because a cardholder refuses to provide ID. Visa believes merchants should not ask for ID as part of their regular card acceptance procedures.”

…and if you think I’m lying, you can view the official document here:

http://usa.visa.com/download/merchants/rules_for_visa_merchants.pdf

Not only can a store not require a drivers license or other I.D., but Visa actually discourages them for asking for it!  MasterCard also has an equivalent policy, which can be found here if you still don’t believe me:

http://www.mastercard.com/us/wce/PDF/MERC-Entire_Manual.pdf

American Express and Discover both have similar policies, and not only prohibit I.D. from being required, but also strongly discourage it.

Often when people hear of this, they are either delighted or discouraged.  I’ll address the later, first.  By federal law, you can only be held liable for up to $50 of fraudulent credit card charges.  That was enacted decades ago, and today, I have never heard of any credit card company, even the scummy ones, enforcing the $50 deductible.  Simply put, you’re not responsble for charges.  So before you blow your stack, remember it’s not your money that’s liable!

Now that brings us to the question “If a store can’t ask me for I.D. to use a credit card, wouldn’t that hurt the credit card companies?”  Well theoretically, yes, they take the liability.  But with modern automatic fraud detection techniques, such as unusual spending patterns or use of card outside of your normal areas, the crime is usually caught (as in new charges prevented) early on, even if the consumer doesn’t notice them.

Credit card companies want their products to be as user-friendly as possible, and they know requiring I.D. isn’t exactly user-friendly.  Therefore they’ve concluded they’d rather take the risk with their money.

Personally, I am glad merchants can’t require an I.D. for a purchase.  There’s been countless times I don’t have an I.D. on me.  Also I think requiring an I.D. for smaller purposes is too much of a hassle anyway.  Plus let’s admit it, everyone nowadays has Photoshop and photo printers that can crank out a fake drivers license that would suffice anyway.  In reality, requiring an I.D. is no foolproof way to prevent fraud at all.  Criminals will simply turn to different avenues to use the stolen cards instead, such as on the internet.

Next time a store clerk asks for your I.D., you may want to point out the agreement they have with the credit card associations.  If that doesn’t work, and you really feel wronged, you can file a complaint against them:

Visa: 1.800.VISA.911
MasterCard: 1-800.300.3069

So next time someone asks you “Do I need an I.D. to use a credit card?” you can tell them… no!

So last week I got an offer In the mail for the American Express Blue Sky card. This is basically the same as the Blue card except you get airline rewards instead of cashback. I have NEVER seen a bonus offer anywhere for this card (neither online or off) so when I received a letter with 30,000 bonus points for signing up, I was excited!

Problem is the name on the invite was the person who lived here before me. However I’m a long time American Express cardmember and have several high limit credit cards with them, so I figured if I called them up and told them about this letter, they would give me the promotion anyway. After all, 30k points equals $300 in discounts, and since this card has no annual fee, I would be stupid to pass it up!

So I call the number on the letter and the phone is immediately answered (without even ringing) by a CSR ready to take my application. I explain to them the situation and they say they can’t help me. “But wait! I have the letter here in front of me! The envelope was addressed to [name] but it’s my address! Here I can tell you the RSVP code and we’ll sign up the card”

She responds “I’m sorry, the RSVP code is linked to the name on the letter.”

After several minutes of heated discussion and getting no where, she recommends I speak with marketing, so I say “Sounds good, please transfer me over.”

While I wasn’t transferred to marketing, but rather regular customer service – who claim it’s not even possible for customers to talk to marketing directly via phone so the other rep made a mistake.

I get the same run around with her. Finally one last idea pops in my head… I’ll start quoting USPS laws! So I begin reciting that this envelope was addressed to [name] or current resident, and by law, I am the current resident since this is my home! To put it nicely, she wasn’t the brightest bulb in the chandelier, so despite repeating it multiple times I don’t think she ever got it. She would just respond to things I would say by reading a bad script.

“That’s it!” I say. I give up. By this time I’ve spent nearly 20 minutes total, so I give up. But one of the last things she told me I found very odd “The marketing department gathers it’s data through public sources like credit ratings. They have no knowledge if the people that receive their solicitations are already American Express cardmembers or not.”

Oh that’s super… they would rather give that offer to a random person than a loyal customer!

Well since everyone else seems to have a blog today, we thought we should hop on the bandwagon and have one too. Just like our message boards, we will enable discussion to posts via comments you can leave.

Thanks for taking the time to come by and visit – we appreciate it!

-CreditCardForum.com