Please regulate the hell out of credit card companies
My morning missive to Rep. Sam Farr:
I have checking and VISA accounts with Bank of America. I write to protest their practice of reflecting charges on the VISA balance immediately (within seconds), but reflecting credits only after up to 36 hours.
I needed to make a charge, but account balance was too high. I transferred money on-line directly from my BofA checking account to my BofA VISA card. Because the transfer was done after 12:30 p.m. Pacific Time, I must wait all of the day of the transfer and all of the following day before the payment is reflected.
I don’t like this asymmetry, and there is no reason for it: clearly if they can reflect charges immediately, they also can reflect credits immediately. The delay in posting credits doubtless benefits the bank, but it doesn’t help the customer.
Perhaps a requirement that credits be reflected immediately—at least on-line direct transfers—could be added to the financial regulation and credit card reform package.
Thank you for listening.
It’s called float, and California tried to outlaw it as a practice about ten years ago. The credit card companies came out of the woodwork to squash the bill. Any asymmetry between a company’s credits and debits is clearly unethical and should be illegal. It can be shown that float creates pure profit through arbitrage, which is unfair, and any first-year economics student can tell you.
47th_problem_of Euclid
17 September 2009 at 1:47 pm