So what happens when dimwits do business together?
It’s all in the Card Member Agreement.
As we’ve seen, everything might work out fine with this type of credit if you are never late, never borrow more than you can pay by the end of the month, never exceed your limit, never lose your job, never get sick, never get divorced, pretty much go through life perfectly, without any problems.
And we all know, where money is concerned, things always go just swimmingly.
But what happens when they don’t?
The Agreement talks about that as well.
Trip up for any reason and the Discover people will declare you in “default”.
Here the Agreement gets pretty legal again, a little more scary too.
A Card Member defaults by:
1. Becoming insolvent. That means that you are unable to pay your debts as they come due.
2. Filing bankruptcy. This one is self explanatory.
3. If Discover has a “reasonable belief” that you won’t pay. That sounds real legal too, but how do they form this “reasonable belief”. Do they come to your house for a coffee?
4. You are declared incompetent by a Court. Let’s hope that doesn’t happen, but if you are so out of it a Court says you are double daffy, Discover won’t be happy and will terminate your right to use its card. You might not care at that point, but it’s in there anyway. Gotta cover all the bases.
5. You die. Discover will not loan to you once you are dead. Maybe that is a good thing.
6. Fail to comply with the Agreement. Another one that explains itself, a bit broadly, but makes the point.
7. Exceed your credit limit. We’ve already seen what that one means.
8. Fail to pay your Discover bill. Maybe this one should have been first? If you default, Discover calls in the entire bill, “immediately due and payable without notice”, and with all the interest, fees and charges they can find in their Agreement tacked on to the bill. That’s pretty harsh. But there is more. Discover then hires lawyers and collection agencies and adds their fees and costs to your bill. It reports your default to the three major credit reporting agencies. It calls and writes asking for and demanding its money. This is the point at which the typical Card Member wonders why he or she ever entered into this loan agreement. It is also where the fear begins. Discover Card has over 50 million members. It is among the largest credit card brands in the United State. It has 12,000 employees and generates billions in revenue each year. Discover’s advertisements tell you “Its time to expect more from your credit card”. Well, default and you’ll get plenty more. But hey, even if you default, you should be able to call them and work something out, right? They seem pretty nice in their commercials. The Card Member Agreement answers this question too. Default and you get run through their collection process, no questions asked, no answers provided. The Discover dimwits make so much money originating credit for dimwits like us that it simply does not makes sense for them to pay people to sit on the phone with you and make a deal. Statistics are all that matter now.
That is precisely where we come in.