Life In The USA, Part 3

After all this positive talk in the previous part, it's time for more complaining, and a curious phenomenon as well .

Credit

There is this thing called a credit rating. It basically indicates if you are good for your money or not.

You can have a good credit rating. This means that you always pay your bills on time.

You can have a bad credit rating. This sort of means that you are a no-good bum that can't manage money, and that is always late paying bills, if paying at all (I'm dumbing this down a bit).

Or, you can have no credit rating. This typically happens to immigrants.

You see, despite the fact that everything in the America is the "best in the world ", Americans have surprisingly little notion about what is actually going on in the rest of the world (I'll rant about that some other time).
Financial institutions like banks and credit card companies are no exception to this. You can have perfect credit anywhere else in the world, it doesn't count for anything. The world ends at the Canadian and Mexican border.

Tangent. I tried ordering some camera equipment from a company called cameraworld.com (notice the word "world") several years ago. They would not accept a credit card with a foreign billing address, despite the fact that the gas station around the corner does not have a problem with it. When I called them and asked them why this was, I was told that it was "company policy". Like that is some kind of divine rule, you're the company, so change your stupid company policy, I say. Anyway, I ended up ordering from B&H (bhphotovideo.com) who did not have this idiotic xenophobic policy. To their credit, Cameraworld has wizened up since then. Also, I think they are one of the handful (with B&H and a few others) of photographic equipment merchants that are honest and reliable and not total and utter crooks.

Having no credit is a chicken-and-egg problem. You see, to build up a credit history, you need to get a credit card. To get approved for a credit card, you need to have a credit history. Hmm. After managing with checks and a debit card for years, we found out that we could not change cell phone providers, due to "insufficient credit".

Explanation. Credit cards in the USA work in a different way than I was used to in the Netherlands. In the Netherlands, if you have a credit card, it is typically linked to your bank account. You charge expenses to it, and the bank takes what you owe out of your bank account. Kinda convenient. Of course, you need to have enough money in your bank account, or you'll get problems. Debit cards in the USA basically work in the same way. Credit cards (in the USA) work quite differently. If you have a credit card, you have a "credit limit". Basically , that's the amount of money you can spend in a month. At the end of the month, you get a bill. Naive people like myself would think that the idea is that you pay the bill. You can actually do that, but the credit card companies don't like that at all. The idea is that you only pay the minimum required amount (too complicated to explain right now), so they can charge you interest on the rest. And boy, do they charge interest. The annual interest rate can be anywhere up to 20%, rates usually associated with lone sharks.

Anyway, because of this insufficient credit, we decided to cave and apply for a credit card. No joy. Refused. Reason: "insufficient credit". Bastards. So, apply for a credit card at the bank that has had our money for that past 8 years. Surely, judging from our account history they should know that we mange our finances well, and are very credit worthy. Refused. Reason: "not a U.S. citizen or permanent resident".

I have researched this, and it turns out that they can actually do this. Although there are numerous laws that forbid "discrimination based on national origin", that only counts if you are a U.S. citizen or permanent resident. So much for that.

All this got me so upset that I actually considered moving our money to another bank. I decided against that, based on the fact that any other bank would probably have the same asinine rules. That, and the fact that our bank employs really nice people who were genuinely embarrassed by all this.

So, we caved, and got a so-called secured credit card. In simple terms, this means that the bank takes a certain amount of your money, and puts it in a special account. The amount they take is you credit limit. For us, the idea is to build credit in this ridiculous way.
Guess what: the offers for additional credit cards have already started arriving by mail. Yeah, right.

Apparently I should be embarrassed about this. The guy refusing us the cell phone contract talked to us in a very low voice, like we had some kind of icky disease. I don't care. I'm not going to feel ashamed about paying what I owe and therefore having no history of borrowing money.

I can't escape the feeling that the reasons for refusing us have something to do with the fact that we pay our bills on time, as strange as it may sound. You see, if you pay your credit card bill on time, they cannot charge you anything on top of what you really owe them. No finance charges, no interest. Hmm.

I am tempted to write about the way the average American manages credit cards, but I'll save that for some other time. On to the exciting subject of..

Mail-in Rebates

A phenomenon largely unknown in Europe (at least in the Netherlands, as far as I know).

It works like this: a store advertises a product as a fantastic deal. The product can be just about anything, electronic equipment, software, food, whatever. The great deal is that you pay the regular price, but you can get a lot of money back with the mail-in rebate. A mail-in rebate is basically a coupon that you have to send in by mail, along with the store receipt and (usually) the UPC product code (bar code) from the box that the product came in. Then (if you are lucky), the vendor will send you a check for the rebate amount. Usually takes a long time for them to send you the check, 4 - 6 weeks is usually the minimum.

I can't help wonder if they are betting that some people will die in the mean time. Sounds cynical, I know.

So, sometimes there are deals that are almost too good to be true: "Regular price $25.00, discounted price $15.00, with a $15.00 mail-in rebate it is free!". Apart from the sales tax on the discounted price of course, you won't get that refunded. There are actually some stores that are honest enough to disclose this fact. Amazing.

So, why would vendors give away their products? Well, turns out that the vast majority of buyers never sends in the mail-in rebate. Too much hassle (and it is a hassle). Also, the period to send in the mail-in rebate is often quite limited (15 days after purchase, for example). Or the period to send in the rebate is too long (over a year sometimes). People tend to forget. Or sometimes there are ridiculous restrictions like "while supplies last". Eh? You mean: "until we are bankrupt?".
Then there's the thing about "circling the product and purchase price on the receipt". This means that you have to circle the product and purchase price on the receipt. Huh. I have never forgotten this, but it would not surprise me if forgetting it would be reason to refuse the rebate.

So, do you ever get the money back? It varies. Most of the time you do, as long as you follow all the instructions exactly. Sometimes they find a reason to refuse the rebate. And sometimes you never hear back from them.

Positive exceptions. Microsoft has a good reputation for honoring rebates, and actually sending a check within two weeks or so. Also, Costco warehouses have a brilliant way of getting you your rebate: you can go online, enter all relevant information like member number, warehouse number, register number, and transaction number. No messing with UPC codes and trips to the mailbox and all that. Has never failed for me, I have always received the rebate check.

One frustrating experience I had. I waited until about one week before the deadline to send in the rebate for a set of computer speakers. Should have sent it in earlier, I know. After about one week(...), the envelope was returned by the U.S. Postal Service with a note that I had to add additional stamps (something like 29 cents, can't remember), because the envelope exceeded the size accepted by their sorting machines. Turns out the envelope was too thick because of the UPC code that I had to cut out of the (thick) box that the speakers came in. So, I sent it in again, one day after the deadline. Guess what? No rebate, too late. Aarghh.

The other day, I spent about two hours doing everything that was needed to get four rebates (the total was close to $100, so it was worth the effort). Apart from the one Costco rebate (took two minutes to do), I had to find the product boxes, cut out UPC codes, photocopy everything (so you can prove that they are defrauding you by refusing the rebates), filling out rebate forms that are designed to make it as hard as possible to fill them out, write envelopes, find stamps, walk to the mailbox in the middle of the night, etc.

The bottom line is that I'm starting to shy away from any offers with mail-in rebates. I got burned too many times, I guess. Oh well.

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