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Thu Oct 3, 2019, 04:58 AM

I Worked at Capital One for Five Years. This Is How We Justified Piling Debt on Poor Customers.

https://newrepublic.com/article/155212/worked-capital-one-five-years-justified-piling-debt-poor-customers

I Worked at Capital One for Five Years. This Is How We Justified Piling Debt on Poor Customers.

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Annie and I worked together at Capital One for three years. For a few months, I was her boss. I oversaw the bank’s “secured card” product—a credit card marketed to people whose credit is so bad they can’t get a credit limit of $300 at a 27 percent interest rate without putting down a security deposit. Ironically, at Capital One, the more of a positive-energy type you were, the more likely it was that you’d work in the subprime division. There, people like Annie and myself reasoned, the choices you made could, hypothetically, make things easier for struggling families. We told ourselves that such families likely didn’t have any better lending options. And for poor, under-banked households, many lending options are far worse than Capital One.

The real question, of course, isn’t whether a credit card with a 27 percent interest rate and a $39 late fee is better than a payday loan. It’s whether Capital One’s marketing campaigns push people into debt who would have otherwise avoided it; whether it is actually in a person’s best interest, desperate though they may be, to borrow money at an exorbitant rate; and whether this enterprise is ethically defensible—in particular, for the decent, hard-working employees who toil every day to make Capital One’s mercenary strategy a reality. Because the ugly truth is that subprime credit is all about profiting from other people’s misery.


In 2012, the year I started my first Capital One internship, the company’s acquisition of HSBC’s credit card business went through, making it one of the largest subprime credit card issuers in the U.S. The decision to double down on those Americans struggling to get by has paid off handsomely.

The credit card titan’s newly-constructed 31-story glass headquarters in McLean, Virginia, is but one lavish testimonial to the success of its bottom-feeding business model. Capital One collects $23 billion in interest per year—an average that works out to $181 from each family in America. Of course, not every family has a Capital One account, and most public surveys say roughly half of people with credit cards pay them in full and accrue no interest. So simple math tells you that many families are paying Capital One at least $800 in interest every year.



Capital One’s decision to double down on those Americans struggling to get by has paid off handsomely.
And most of that interest gets paid by the families who can least afford it.
According to data from a 2018 Federal Reserve survey, people who report an unpaid credit card balance “most or all of the time” were nearly five times as likely to describe themselves as “struggling to get by” or “just getting by” than the people who paid their credit card bills in full every month. They were nearly 50 percent more likely to have an income under $50,000, 2.5 times as likely to describe the economic conditions in their community as “poor,” and three times as likely to have skipped prescription medicine or doctor’s visits because of cost.

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Reply I Worked at Capital One for Five Years. This Is How We Justified Piling Debt on Poor Customers. (Original post)
Demovictory9 Oct 3 OP
Skittles Oct 3 #1
A HERETIC I AM Oct 3 #2
AJT Oct 3 #3
N_E_1 for Tennis Oct 3 #4
rusty quoin Oct 3 #5
3Hotdogs Oct 3 #6
Vinca Oct 3 #7
FBaggins Oct 3 #8
3Hotdogs Oct 3 #9
BeckyDem Oct 3 #10

Response to Demovictory9 (Original post)

Thu Oct 3, 2019, 05:35 AM

1. sick, sick, sick

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Response to Demovictory9 (Original post)

Thu Oct 3, 2019, 06:07 AM

2. May I suggest....

That you put your title line in "Quote" marks so it is clear this is a quotation from an article and not something you personally have written or said.

Just a thought. Many will not bother to notice the link to the article and think that you are this horrible person.

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Response to Demovictory9 (Original post)

Thu Oct 3, 2019, 06:22 AM

3. "What's in Your Wallet?"

A-holes.

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Response to Demovictory9 (Original post)

Thu Oct 3, 2019, 06:23 AM

4. Takes money to be poor in America...nt.

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Response to Demovictory9 (Original post)

Thu Oct 3, 2019, 07:29 AM

5. I'd say most of my mailbox junk is from them. It's relentless.

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Response to Demovictory9 (Original post)

Thu Oct 3, 2019, 07:29 AM

6. I ain't poor and I am in credit card debt: 29K. Net take-home, $68k. House paid off.

But the credit cards will all be paid off by December of next year. I figure I am paying around $5,500 per year on interest -- on stupid shit.

I got inspired by Dave Ramsey's stuff. I don't subscribe to the Jesus part of his program but I am inspired by people who overcome debt. I let this get to where it is by inertia -- not thinking about it.

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Response to 3Hotdogs (Reply #6)

Thu Oct 3, 2019, 07:35 AM

7. We got into credit card debt during tough times being self-employed.

Now down to about $3,000 and should be paid off in a couple of months. It's easy to get into debt, but a whole lot harder getting out. As for Capital One, I always put every sales pitch from them through the shredder. I've always thought they were probably predators and I guess I was right.

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Response to 3Hotdogs (Reply #6)

Thu Oct 3, 2019, 07:39 AM

8. You sound like someone who should ignore Ramsey

Don’t get me wrong. For people who are badly in debt from making bad choices... his advice can be the very best way to recover - and the discipline can be life-changing.

But if your home is paid off and you owe almost $30k on credit cards... it’s time to get a mortgage or at least a home-equity product. Feel free to pay it off just as fast, but you’ll save thousands in interest.

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Response to FBaggins (Reply #8)

Thu Oct 3, 2019, 07:44 AM

9. You're right.

Again, inertia, the aggravation of applying for home equity.... I have not made a credit card purchase in 7 months. Sissored them and threw them away.

But yeah, home eq does make more sense.

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Response to Demovictory9 (Original post)

Thu Oct 3, 2019, 07:55 AM

10. Crooks, like the Mob but worse.

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