25.6. Quelle nombre! What a number.
An algorithm generated it. An algorithm of sophistication, sensitivity and power, fashioned by a squadron of experts whose origins trace back primarily to Southeast Asia and East Asia, where assorted Tiger Moms and saried ladies bent their wills on the project of seeing their offsprings end up in a specific part of on the central California coast (or Wall Street in Manhattan), but also trace back to some Caucasian American households where — from pre-schools through boarding schools, to the Ivy League (or Stanford) and then on to Wharton or Harvard or Caltech or MIT — starting as youngsters — people had devoted their gifts and labor to make it to the top of the heap where they could write these algorithms that would spit out those perfect numbers. Like 25.6.
The squadron of succeeders presumably had managed to arrive at a number that would balance customer need (or despair) against good taste — not deterring too many prospects while maximizing the squeeze from each sucker — to top out the profit from the. J.P. Morgan Chase dollars those credit card holders were taking as cash advances. Variables include the incomes of this cohort of card holders, their access to competing banks, the APR’s competitors are charging, the likelihood of bankruptcy filing, the prospects of antagonizing customers enough that the will write their congresspeople and get the regulators involved…well, perhaps the last doesn’t make it to the calculation. The fundamental challenge is to answer this question: As the cash advance APR creeps up, at what point will it stop generating additional funds because it is driving away too many prospectors?
This is a solo cycling trip from Nice to Paris during the glorious month of October. Thanks to some motherfucking pickpocket in Marseille, I’m in Lyon speaking to a bank employee sitting in an ex-farmfield in Iowa so as to retrieve my credit card PIN, something I’d imagined I’d never ever need to use.
As the call was passed around in the J.P. Morgan Chase system, four different bank reps read the same script to me: there would be a one-time charge of 5% of the borrowed sum- $10 minimum! — and an annual percentage rate of 25.6%, starting immediately. “But, what if there is a positive balance on the account?” Well, “doesn’t matter; please understand that for some seconds to minutes to hours those borrowed funds will be exposed to said obscene interest rate .”
It wasn’t the pennies or dollars that I’d be giving to J.P. that hurt; it was the sense of defeat. Plus, looking like a sucker. Of course, no one would see that. Expect for me.
People had warned me to be wary in Marseille. Great town, but plenty of pickpockets. Heeding that advice, I’d gone so far as to fasten the button of the back pocket containing the money clip. Once. So much hassle to button and unbutton! What the hay, ain’t no motherfucking pickpocket going to outdo me and my sensitive behind.
I haven’t an idea how he (or she) managed. There’s no recollection of being bumped by — or even being close to — some stranger who could have slipped his (or her) fingers into my back pocket and withdrawn my money clip. That thin, metal money clip, containing my California driver’s permit, two credit cards and a bank card/ATM card, along with two 50 Euro bills.
The theft did not leave me credit-card-less, however. In a burst of foresight, before leaving Oakland, I’d secreted an extra credit card into my backpack. Just in case… With it, I managed to obtain 110 Euros by going on a shopping trip with some Marseilles I’d met, paying for their purchases with the card and then taking that sum from them in cash. Maybe, if I rely on the credit card as much as possible, those 110 Euros will stretch all the way to the airplane on the CDG runway???
No such luck. By Lyon, the cash was running dry and there were a number of days in France awaiting before Paris.
So, here I am, sipping a Duvel to steel my nerves, at le Trokson on La Montée de la Grande Côte in Lyon, France about to pick my ass up and lower myself down to a cash advance on my credit card from those rapists at J.P. Morgan Chase.
I find myself thinking that that is too loose a use of a highly charged term. This is not sexual assault; but I do feel a teeny bit vulnerable with a few Euro left in hand, hardly any clothing, knowing not a soul, without lodging for tomorrow…nah, that’s a bunch of bullshit. I’m not at any real risk. The only vulnerability here is that my choices are limited to hassling friends or family back in the states for money vs paying these fees and rates. And there, the power differential is stark.
Chase might could point out that they are helping me when I’m in a fix. But couldn’t they do it a little less rapaciously? Like, wouldn’t it be reasonable to ask for a maximum APR from a cash advancer?
The classic reply is that such an request is unreasonable; market capitalism works when all players seek to maximize their benefits. When one lender is asking “too much”, another will swoop in and better serve the borrowers needs, no?
This immediate situation is too much of an outlier for market forces to detect and address profitably. But I think would be just lovely if the banks, full of those succeeders, would cease with their friendly service and benevolent motive poses. Those are not what 25.6% APR is saying to me right now as the last drops of that Duvel (happy hour priced!)make their way down.
And I’m on my way.