Canadian Personal Finance Blog

Don’t get me wrong, given the amount of complaining from the banking industry, Jim Flaherty’s new credit card rules seem to be a very good start, but I would dearly love to see them go a little farther.  The Globe and Mail does a good outline of what the new rules does address, but my concern is the major problem is still not being addressed, which is the exorbitant interest rates allowed.

Loan Sharks Blush

The rates that Credit Cards charge as regular business while cheaper than seen from the Pay Day Loan world are still completely out of sync with bank rates, yet, they are allowed to inflict this kind of usury on consumers. There are no rules capping the rates that can be charged, and I think that is what is missing from this legislation. I am not sure what the cap should be, but allowing unfettered rate increases is asking for trouble.

Better rules for credit limits would be good as well, stopping folks from being able to bump up their limit via a simple phone call seems a dangerous practice as well. If you want to lower your credit limit you have to send in a signed document and such, but to increase your rate is a simple phone call, wonder why that is?

While I know the other issue with credit card debt is that people are using Credit Cards as short term credit mechanisms (and then turning them into long term credit vehicles, since they can’t extricate themselves from the debt), and that a lot of the financial pits dug by consumers are self-inflicted, I think the Credit Card companies make this trap a little too easy to fall into.

There was one credit card lobbyist complaining about how teenagers and young folks won’t be able to get credit cards if new rules are put in place. I believe I shouted at the TV, “… and that is a BAD thing?”, so my view is less credit cards to less folks might just be a good thing. 

Nobody needs as many credit cards, as we all have!

Other Useful Documents

A useful link for those who are learning about Credit Cards is a document posted by the FCAC called Getting The Most From Your Credit Card. They also have a very good beginners document called Your Rights and Responsibilities , well worth a read as well.

That was the label I put on the Pay Day Loan and Cheque cashing shops, but I think I will revise my statement, not wanting to put Pornography in a bad light (given how much of the Internet was built because of it, I don’t want to seem to be biting the hand that fed me).

Financial Head Shop

I am revising my statement saying that Pay Day Loan and Cheque Cashing places are actually the same as Head Shops (financially at least). 

Head Shops are where you buy the paraphernalia and “bits and bobs” you need for your drug habit (e.g. bongs, rolling papers, Bob Marley T-Shirts, etc.,  just ask Michael Phelps he can fill you in on this). 

Pay Day Loan establishments are like Financial Head Shops and use the same arguments as well. “…We don’t make our customers use our services, we are simply supplying a needed service to our customers…” (talk to a Head Shop owner, you’ll get about the same statement of business (i.e. if we didn’t do it, someone else would)).

No matter that you are charging at a rate that would make “Olaf the Loan Shark”  blush, or that once someone starts using a Pay Day Loan it is very hard (nearly impossible) to get out of the cycle (sounds like a bad habit, like say, drugs?). It is a service to take a $5 service charge off a Government cheque that any bank SHOULD cash for anyone who has sufficient identification. 

Sorry folks, guess I woke up on the bad side of the financial world this week. I do like the comment yesterday about how the picture I posted looks a lot like an old time strip club (given the amount of Neon lighting used), that comment I had to chuckle at (glad to see my readers have as twisted a sense of humor as I do).

Senators Ticket Sales Down

I enjoy listening to Sports Talk Radio, just because of it’s silly inane nature and you don’t have to think much, but I caught myself getting quite agitated by a statement by the TEAM 1200 morning crew complaining that people aren’t going to games in Ottawa only because the team stinks. Being a Montreal Canadiens fan (sorry, if you grew up in Montreal when I was a kid, you were a Canadiens fan or you got the crap beaten out of you), I thought it was funny, but then I got agitated.

How naive and obtuse to think that the only reason people are not paying from $20 to $200 a ticket to go out to a Hockey game being simply an “I don’t like the team” decision. I rarely go to games, but am still a big fan of Hockey, because I cannot justify spending upwards of $100 to $300 for a single night out (parking, a beer, popcorn and a ticket), it’s as simple as that. Yes the Senators are not playing well this  year (no big revelation there), but I still think another reason every game is not sold out is that folks are worried about money.

If the team’s record had anything to do with folks buying game time tickets, the Maple Leafs would not have sold out pretty much every game in the 80’s (and trust me those were teams it was painful to watch for FREE).

I opened my Ottawa Citizen on Saturday and I saw this picture and I was hit by a combination of revulsion, anger, and lurid curiosity.

Revulsion and Anger

Why am I repulsed? You haven’t really read much of my posts, but I think the Cheque Cashing and Pay Day Loan industry is the worst financial service out there, and shouldn’t just be heavily regulated (which it is not) it should be shut down. Anger because the surcharges and interest rates taken by these modern day Loan Sharks is obscene even at the Loan Shark level. 

Lurid Curiosity

This is the most amazing entrepreneurial set up I can see. Whoever runs this particular business has nailed their clientele exactly and are pandering to their every whim and need.

• Cheques cashed at a fee
• Lottery tickets sold (and given away as incentives to good customers)
• Cigarettes sold
• Foreign Exchange
• Money Transfers
• Income Tax “Refunds Now!”

What other services could they offer?

Modern Day Loan Sharks

It’s staggering that the government allows this kind of “financial pornography” to go on. I must admit I didn’t think there was places like this around my house, but I noticed a  ”Modern Day Money Lender” has opened in my neighbourhood, why? I have no idea.

My guess is over the next year or two, this may be one of the growth industries along with repossession and bill collection, and that is a very sad statement about life in general.

I have had this discussion with a few folks, and figured I’d bring this one to my readership:

Why do governments assume we will pay fees to dispose of hazardous waste?

When I first moved to Ottawa every weekend the City of Ottawa would run a hazardous waste drop off at the dump near my house, where you could bring your paint cans, spray paint, old household cleaners and chemicals, etc.,. It was a good system (in my opinion) which made sure a great deal of these chemicals did not make their way into the landfill and were disposed of in a safe manner.

Since then the number of hazardous waste drop offs has been cut to 2 or 3 a year, and I am confident that a great deal of the hazardous wastes are not being disposed of in a safe manner.

CRT’s Disposal Charge by the Pound

My biggest complaint now is the disposal of CRT’s and old Televisions. A year ago I took a 14 inch monitor from my Church to a store that disposed of CRT’s and was horrified to see that I had to pay almost $30 to dispose of this device (I was charged “by the pound”).  My Church gladly paid the fee, but this kind of “fee” to dispose of something hazardous makes me wonder if this is the right way to do it?

Many people I know have voiced the unlikelihood of them paying this fee to dispose of their CRT’s, and instead the CRT’s will be disposed of in more creative ways. I agree that it is wrong to dispose of CRT’s in landfill sites (lead, and other interesting chemicals are some of the by products of CRT’s in landfill sites), however, making it expensive for consumers to dispose of them is not going to encourage folks to be good “ecological citizens” of this planet.

I found a way to dispose of 4 of my CRT’s, but it was at the expense of my former employer. They were having a “clean up the campus” week where you were supposed to clean up work spaces and put the “waste” in appointed areas. I decided to expand the “clean up” to my home office, which had many old CRT’s and I brought them to work, and my former employer disposed of them (I hope).

Solution to this Hazardous Issue?

My opinion is that there should at least be some kind of “amnesty” for folks to be able to drop off old TV’s and monitors without having to pay more than $10 per device (or free would even work better). Anyone care to disagree?

Interesting North American Car Manufacturer Solution?

Completely changing the topic, my mechanic gave me the best bail out idea for the North American car manufacturers. Make all cars sold for the next 4 years tax deductible (the purchase price). You want to see car sales sky rocket, with no money invested by the Government (other than a loss in Tax income)? This intrigued me (I’m sure it is completely impossible, but it was an intriguing idea).