Are there any other historical instances of banks banning a specific type of purchase from CCs?
There are some banks that have blocked pornography and medical marijuana purchases.
But basically, the pattern is clear: banks don't want to lend you money to make investments. Banning money orders is a natural extension of that because you can then go use that cash for the aforementioned things.
That makes a lot of sense, because if banks did want to make those investments, they don't need you. If a bank wants to invest in stocks, property, or a game of roulette, they can just go put their money there, no credit card customer required.
What banks can’t do without lending you money is get a little slice of your paycheck every month through interest payments. This is a separate asset class than things like stocks.
Obviously if they accept them, there must be some banks that don't mind, but I know that many issuers won't accept the transaction. Kind of like the situation we have here: Wells Fargo blocks cryptocurrency purchases, but not every bank does.
My Citi is a MasterCard and I've never had problems paying my mortgage with it. I did just last month. So Visa and AMEX won't let you pay mortgages but MasterCard is ok with it.
As a proof of concept, the very first coin dealer I just found randomly using Google takes all major credit cards and sells silver by the ounce. Well, gee whiz, I can run up my cards buying silver ounces, walk down the street, sell them at a different coin shop for cash, then go buy whatever I want. Hmmm... What is the real reason banks don't want people making certain investments??
Honestly, the responses in this thread from bitcoin people...it’s like they’re just now realizing that banks have intelligent employees working for them.
Here's a random credit card from American Express. Cash advances have a drastically higher interest rate, PLUS a 3% (minimum $5) transaction fee.
https://www.americanexpress.com/us/credit-cards/card-applica...
Same pattern for Chase Sapphire Preferred. Higher APR and this time a 5% (minimum $10) transaction fee.
https://applynow.chase.com/FlexAppWeb/pricing.do?card=FS6K&p...
With regards to cash advances, they come with much higher APR rates, to account for the increased risk and are often not available to card holders with low credit.
Perhaps Wells Fargo would be more amenable to their customers buying crypto if they were able to charge a higher APR for such transactions, but I imagine this isn’t such a simple change given the many parties and agreements involved.
As others have pointed out, the other aspect is fraud. Perhaps the anonymous nature of crypto currencies attracts more fraud payments than bullion?
However, I am highly skepticle that you can buy silver with a credit card and then sell it for cash “down the street” without incurring huge transaction costs in the process. I’d be surprised if the process was even 80% efficient.
Source: I once negotiated a cash price for a jewelry piece in downtown Portland, Oregon and the jeweler accepted bullion I wanted to liquidate at quoted spot bid in lieu of cash for part of the price.
If you are talking about getting "SAR levels" of USD folding green, though, you're going to need to make an appointment in advance. Plus, heavy. So the "walk 1600 oz of silver down the street" strategy has a number of practical impediments beyond the spread.
Anyways, as an American who's grandfather landed on Normandy in WWII and who actually has roots back to the Mayflower (I do!) the very idea of an "SAR level" makes me fricking sick. Disgusted. People should be free to do what they want with their money and not have to tell anyone anything, period. Not only with their money, either..with their free time, the communications, their travels, their bodies and souls...LIBERTY should not just be an empty slogan on cheap metal coins and in songs and engraved on old stone statues.
It is really too bad what the USA has become, and I hope that the future will see a brighter day for "we the people"..
(Edit, adding: I just did a quick peek around the web and found spreads as low as 0.6%, if you buy and sell with that same particular company. In fact they also will hold it for you so you don't even have to physical take possession and deal with mailing or transporting it at all. While I would expect they may have some rules about that, it does show how competitive the market is and gives some idea of the situation.)
If you buy gold and resell it whereever then you have cash. The casinos in Vegas don't ask a lot of questions, nor does anyone else, really...(yes, this includes the good ol' Moonlite Bunny Ranch too..lol)
All I'm saying is that you can easily get cash from credit cards which you can then buy whatever with, so I just don't see the point (well, I may...) of them limiting your usage of their cards.
> Hmmm... What is the real reason banks don't want people making certain investments??
If you're suggesting some kind of conspiracy against cryptocurrencies by banks, you should provide some evidence to counter the entirely reasonable justification about the high default rate the article has given.
-Adult Entertainment
-Cash Advances
-Check Cashing/Guarantee
-Child Pornography
-Condo (Real Estate) Down Payments
-Door-to-door Sales
-Credit Restoration Services
-Escort Services and Non-Licensed Massage Parlors
-Financial Services
-Foreign Exchange Bureaus
-Future Services
-Gambling
-Lottery Sales
-Marijuana Dispensaries
-Mortgage Payments
-Multi-level Pyramid Sales
-Payday Lenders
-Prostitution
-Timeshares
-Travel Tour Operators
-Unlawful Sale of Prescription Drugs
-Unlawful Sale of Tobacco and Smokeless Tobacco
-Unregulated Charities
-Virtual Currency
Section 10.2 Prohibited Merchants: https://icm.aexp-static.com/Internet/NGMS/US_en/Images/Merch...
(I believe they are some of the most conservative with transaction risks among the Big Four credit processors in the US)
I wonder how they manage this. Is there a database of known child pornography vendors who accept credit cards? Seems like an odd thing to specifically call out.
I don't know of the specific laws, but that leaves open content that may be legal (books, comics, drawings, fanfiction).
By the way, "Travel Tour Operators" doesn't include all travel tour operators, just rouge ones: "Travel Tour Operators without membership to a Travel Industry Bonding Agency or not an authorized ticket agent (e.g. ARC/IATA/ABTA)."
Also "Adult Entertainment" only applies to Internet porn, "Internet adult digital content sites," so you can probably still use your AMEX to buy a DVD at a brick and mortar porn store.
See "Studio Seventeen" of Netherlands.
Liquidity isn't the problem; price stability is. And gold and silver are not generally problematic as far as price stability goes. The gold and silver can be liquidated for something close enough to the original purchase price that Amex doesn't seem to care.
Um, yes. Years ago a previous tenant of the place I was renting got served in a lawsuit from a credit card company. They apparently didn't have the current address for the person so the papers were left at my house several times. It wasn't that much either, less than $2,000 IIRC. I called the lawyer and let them know they were serving the wrong house.
Anyways, if they sell the debt to collections the collections agency can (and does) sue the consumer.
A family member of mine was also sued by a hospital (not collections) for unpaid hospital bills less than $1,000.
Anyway, if AMEX doesn't disallow precious metals then, for whatever reason, they must not have a high fraud/chargeback rate or they don't have a high default rate for those transactions. It's business.
Also, buying something and reselling it for a profit is a totally valid use case for a credit card, they can't meaningfully prohibit that, nor would they want to, since that includes pretty much the entire category of "business expenses."
American Express is a business and they know the type of activities that make them money and the kinds of activities that don't make them money. They wish to participate in the former and avoid the latter. If you're upset about businesses avoiding activities that lose them money, you're going to be upset all the time.
I have been served myself, by the way. They do not leave papers at a house. Legally serving someone means the papers must be given directly to the person, and if that person refuses to take them, left at their feet (literally). That is the definition.
The hospital situation might have been a small town hospital using Small Claims court or something, but even still, the expenses involved would not make it worthwhile for a lousy grand.
I'm not trying to call you a liar or anything, astura, but you are either talking about a very long time ago, or you are somehow mistaken about the nature of these events. And as far as "serving" goes, I don't think that has changed pretty much forever.
Who's upset, anyways? I don't care what businesses do. If Wells (the article wasn't about AMEX, by the way) doesn't want peoples business, screw 'em. I'm sure someone out there will happily give credit to people with the right job and other credentials.
Credit card companies mint money, as do most banks. They rarely lose or go out of business, do they? That's why I'm so suspicious about their motivation here. They happily loan money to college kids (who buy mostly beer, junk food, and spring break flights to Cancun with it), they happily let people use their cards at liquor stores, and the majority allow for cash advances (note that their are always ATM machines in casinos and strip clubs and bars and nightclubs, too). You don't think this is just a little bit weird, huh?