IT ALL ADDS UP

by David Sisler

Patricia Wiles checked her statement for her credit card from Advanta Corp., and found a warning — use it, or we'll charge you.

Thirty-six percent of all credit card users are called "transactors" — they pay off their monthly balances each month, never allowing them to roll over into the interest-generating category which banks favor. For many people it just makes good sense to pay off the balance and avoid the extra fees. The banks say they not only lose money from uncollected interest, but also up to $20 a year, just to keep an account open.

So Patricia may be charged $15 for every six month period in which she does not use her card, and $25 should she decide to close her account. Advanta will probably get that $25. Patricia says she has had enough.

That account closing fee will affect many credit card consumers. For years competing credit cards have solicited business, offering low interest rates during the introductory period. Smart consumers have transferred their balances to a new card, enjoyed single digit charges and then switched to another card just as the rate was about to increase. A $25 closing fee may well negate any interest savings.

Credit card issuers, concerned that the explosive growth which they have enjoyed in recent years may be ending, are looking for ways to boost sagging profits, "reserving the right" to add fees to their least profitable customers, penalizing them for using the system.

Three years ago, First USA Corp., the nation's fourth largest credit card issuer, tried to squeeze more money out of their inactive accounts. A company spokesman said the new fees, "didn't test satisfactorily." Translation: consumers screamed "bloody murder."

Not one to be put off by consumer objections, General Electric Co., the 25th largest issuer of credit cards, tacked a $25 yearly fee on its Rewards MasterCard customers who pay off their monthly balances.

One of the most incredible ploys was tried by Providian Bancorp of San Francisco. The bank allowed customers to choose how large a line of credit they wished to use and then charged them if they did not use it all. That plan has been discontinued, but the head of the bank's credit card operation says he is constantly looking at new types of account fees.

Imagine having a line of credit and being penalized for not using it. Imagine paying your debt in full and without any interest being charged and being penalized for accepting the good graces of the bank.

Centuries ago the king held all of the wealth and if you wanted to borrow money, you went to him. He would charge interest, sometimes exorbitantly so, but it was his money, so he could charge whatever he wished. If you were late in your payments you could ask for an extension. It may or may not have been granted, but at least you could ask.

The Bible records the story of one man owed his king a debt described as being 10,000 talents. One talent was the amount of money an ordinary laborer could earn in 100 days. Imagine the earning potential of the man would could run up a debt so large. His debt was equivalent to thirty tons of precious metal. If it were gold, at today's market, the debt would calculate out at over $300,000,000.

The note came due and debtor could not pay. The king ordered that all of the man's property — and that included the man's family — be sold to repay the debt. The man asked for time. With a simple interest rate of six percent the man could pay $18,000,000 a year and never reduce the principal by so much as a penny. Instead of being given more time to pay off the debt, the king canceled the debt.

Do you know what God says? Each of us owes a debt larger than the national debt. It is not a debt we built up by borrowing money, but a debt we built by sinning against God. It is astronomical. We could pay off our national debt if we were willing to sacrifice, to demonstrate an integrity as a nation that we do not show very often, but we could do it. This is a debt that no one can pay off. It is the debt that you owe and that I owe for the sin in your life and in mine.

God is not a banker. He will not compromise a debt. He will not cut the interest rate. He will not give you less than prime. He will not negotiate with you. Like that king, God could sell you and everything you have and demand payment in full. But, if you ask him, you will find that Jesus has settled your account. No penalty, no interest will be added on.

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Published in the Augusta Chronicle 8/30/97

Copyright 1997 by David Sisler. All Rights Reserved.

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