Comments on: An interesting story about credit card companies

By: Andrew

Andrew — Fri, 08 Dec 2006 04:37:52 +0000

I've got a Capital One card and I've noticed that they offer a relatively low credit limit. I ordered it at http://www.credit-land.com/1030/1030_page_4248_4637.php They are also not in the habit of constantly increasing your limit as a number of others do.

By: Dylan

Dylan — Mon, 05 Jun 2006 07:31:27 +0000

Think about this hypothetical situation: You can either get paid four dollars to help a blind lady cross a street, or you can get paid five dollars to try to trip the lady when she attempts to cross on her own.

I would hope most people of even temperament would agree that the extra dollar of return isn’t worth the moral cost.

The same applies here, although the color may be more gray to some. Choosing not to invest in Capital One (or any company one has a moral issue with) does not mean you cannot make money. It simply means than you’ll choose another vehicle for your venture, and perhaps the return may not be quite so high.

Or perhaps the more moral path may pay longer in the long run. Either way, investing with an eye to ethics as well as finances should be applauded.

By: thrillhouse

thrillhouse — Mon, 17 Apr 2006 15:44:04 +0000

Excellent post.
for Adam from Capital one:
you are either lying or blind to what these companies do. Debt is evil, read the bible.

for everyone else who hates debt, and wants to know the truth about slimeball companies like Capital One::
http://www.daveramsey.com

By: JBA

JBA — Fri, 14 Apr 2006 08:56:05 +0000

I’m the only one among my group of friends and acquaintances in college who graduated with no credit card debt. Everybody else I knew maxed out and paid the minimum.

One friend reasoned with me that credit card companies don’t like it if you stay paid up and don’t carry a balance, so you should always have several recurring charges that you don’t pay off.

Whiskey Tango Foxtrot?

This stupidity earned him my famous lecture: They exist to serve me, I do not exist to serve them! I have better things to do with my money than enrich credit card companies by voluntarily paying interest and late charges — like just about any other use.
This post and the comments make me wonder if my friend perhaps got his disinformation through a credit card company originally.

By: Debt Hater

Debt Hater — Fri, 14 Apr 2006 02:20:38 +0000

I’m glad you decided not to invest because of your own ethics. Money makes the world go ’round, so think of how different things would be if people used their ethics to decide what to buy, not decide their ethics based on what they buy.

By: Adam

Adam — Thu, 13 Apr 2006 12:09:42 +0000

I used to work for Capital One. Very solid company, with extremely robust decision-making processes. I work for a competitor now, but still believe that they’ll always be one of the best performers, and would invest in them over any other card companies.

The talk of printing “it would take you 267 bajillion years to pay off your debt if you only paid the minimum every month” on statements is silly. If you actually saw the data on how many people pay just the minimum every month, you’d see that almost no one is in that situation. People pay the minimum due for 2-6 month stretches at most. Only the few who are really REALLY over their heads pay only the minimum due for a year straight, and those guys are few and far between. It makes for a nice soundbite, but it doesn’t really reflect reality.

And yes, weren’t the capital one interviews a blast? I really enjoy case interviews, so it was fun for me. On-campus was a case interview, analytics test, and psych test. Final rounds were 3 case interviews and 2 behavioral interviews on-site.

By: Jennifer

Jennifer — Wed, 12 Apr 2006 21:18:40 +0000

The test was actually featured in Smart Money. It’s called the Cognitive Reflection Test. I believe the researcher’s name was Fredrick or Fredrickson at the MIT Sloan School. If psycho-finance is your thing, I’d just google the guy and read his scholarly paper. I believe Thaler at the University of Chicago is a big name in game theory and decision making biases. You should have no problem finding his scholarly work as he has his own investment firm.

By: DC Grrl

DC Grrl — Wed, 12 Apr 2006 17:55:34 +0000

Where to draw the line, indeed. I think each investor has their own lines and their own ethical concerns. Personally, I would never invest in McDs, but Absolut sounds like a grand idea if the numbers are right. (I work in advertising, I’m used to getting beat up, but I won’t even start the defensive soap box!) I think Ramit has brought up another good cause.

But just like politics and religion, everyone will have their own views and make their own decisions. Otherwise, the stock market would never function, would it?

By: Hawk

Hawk — Tue, 11 Apr 2006 23:14:06 +0000

Here’s an even more interesting credit card company thing.

My partner just received a letter, forwarded from his old address, from Capital One. This letter was really a book of purchase checks, those infuriating things that credit card companies shower their cardholders with, and which must be destroyed faithfully lest someone else get ahold of them in the garbage.

One problem: he doesn’t have a Capital One credit card. Or a Capital One account of any kind. Or any kind of credit.

So, is it some sort of new trick to get people to sign up? Are they real checks for a real line of credit? Is it just a mistake on the report? Or is it an evil horrible conspiracy to take our hard-earned money? Spooooky.

By: Howie

Howie — Tue, 11 Apr 2006 00:11:50 +0000

I’ve been thinking about my post on this thread last week, and wanted to elaborate on my (and other) points.

I do not think it is wise to inject ethics into investments. Yet I am an ethical person who is very philanthropic and hopes to become even more philanthropic as my career grows. I used to try to invest in companies that I found ethically responsible, but stopped after I realized two things:

First, the returns on my investments were really suffering.

More importantly, though, I realized that even if I were a millionaire, the amount of money I would invest in a single company wouldn’t have much of an impact on it’s bottom line, yet the profits to me could be significant enough to be worthwhile.

Thus, I spend my time worrying about the bottom line as opposed to the way they make their money.