A story about Republican politics said, "Reagan has lead all the way."
An account of a baseball game said, "After scoring three runs in the first inning, the visitors lead all the way and coasted to an easy 8 to 1 victory.
A stock market report said, "Oxxy Pete lead the most-active list."
Over and over, in our paper and in others, "lead" appears where "led" was needed. It happens with such frequency that I have begun to cringe each time I see it.
Come on, all you writers, editors and proofreaders. Let's get the lead out of our pants and start getting led back into the newspaper. VISA REVISITED
Monday's column about Suburban Trust's decision to charge its Visa cardholders a "membership" fee of $15 a year brought in a flood of phone calls. c
Without exception, the callers said that they, too, would stop using their Visa cards to avoid the $15 charge.
And photographer Gerald Martineau added this information:
"I, too, had an account with Suburban Trust Visa card and received the $15 notice. I checked with United Virginia Bank Visa and they said they do not, and will not, charge any type of service fee. So I've decided to cancel my account with the Md. bank and use the Va. bank."
Very interesting. I can't imagine why my Visa card was issued through Suburban Trust, because I had no account there. And I didn't realize that one can shop around for a better deal at other banks that issue Visa cards.
I called Visa USA headquarters in San Francisco and told public affairs manager Cynthia Chaddick about Jerry Martineau's note.
"Yes," she said, "the pricing of Visa products is decided by each of our 11,000 members. Their prices do vary."
"Products?" I asked. "What other product do you provide?"
"Credit cards and travelers' checks," she explained.
"Are very many banks beginning to charge membership fees?"
"Yes, there is a trend in that direction," she said. "There is also a trend among cardholders to pay promptly and avoid interest charges. About 37 percent of our cardholders, representing 50 percent of our dollar volume, are now paying promptly enough to avoid interest charges."
Visa doesn't extend credit to you. The bank that issued your card does that, and it gets the interest. It also collects percentage fees (the current average is 2.4 percent) from merchants who honor Visa cards.
Visa gets its revenue by selling the right to issue cards and by providing certain services for banks in return for a fee based on "activity."
In short: More cardholders are avoiding interest charges; bank overhead is up; smaller profits are being generated by the basic banking technique of borrowing money at low wholesale rates and lending it out at high retail rates.
To get profits back up to their previous levels, banks have begun tacking on an annual "membership" fee.
"Not too long ago," Chaddick said, "a typical bank's revenue from its card business would be divided one-third from fees paid by merchants and two-thirds from interest paid by cardholders. Now, with a decided trend toward less use of credit and higher costs of doing business, the annual membership fee is gaining acceptance. Visa believes in equitable pricing, but each of its members is free to do as it wishes in this very competitive field."
Yup. And millions of Americans are free to continue their trend toward a more prudent use of credit cards.
Unless you travel a lot, your best buy is a card that identifies you as credit-worthy but doesn't cost you anything. If you can pay promptly when the bill is rendered, you will pay no interest charges. If you need extended payments, don't kid yourself: you're going to have to pay for the use of somebody else's money, and the price will not be cheap.
The smartest thing young couples can do is learn to stay out of debt. "Use it up, wear it out, make it do and do without." One who borrows because he can't afford to pay his current bills quickly learns that he has merely added one more weight to the burden already on his back: interest.
Are interest charges significant? Consider what the average home buyer faces now with mortgage money at about 12 1/2 percent. One who borrows $100,000 for 30 years will pay back $1,068 a month -- for 360 months. If you take the trouble to multiply it out, you find the borrower pays back $384,480 for the $100,000 that was advanced to him.
If you can find 10 percent mortgage money, you'll pay back $878 a month or a total of $316,080. If you're caught in a 15 percent mortgage, your payments will be $1,265 a month or a total of $455,400 to repay a loan of $100,000.
Can a bank make money by lending to merchants at 2.4 percent a month (28.8 percent a year)? Gee, I don't know. Can a duck swim?