There are reasons aplenty to wean oneself off the credit card merry-go-round. Whether you'd like to avoid debt, want to keep to a stricter budget, or have been frightened by the recent spate of credit breaches, you may be thinking of going on an all-cash diet.
And while your debit card usually won't let you spend what you don't have, small business owners know that debt is not as good as cash. One small business owner, specifically.
Renee Quarles is the owner of Shades of Afrika, in Long Beach, Calif., a store that offers books, art, and health, and beauty products all with the purpose of enhancing "the understanding of the Afrikan diaspora." In 2010, as part of what she considered a challenge from President Obama to create new jobs, Quarles opened a neighboring salon, Natural Kinx and Waves which created 3 new jobs.
Quarles is a pleasant woman who knows her store inside and out, and she is just as comfortable talking about her customer's home lives as she is world politics.
But she doesn't mince words when it comes to topics she's passionate about. Just try to buy something with a debit card.
"You'd like to pay with a card? Did you know that there's a pimp in your wallet?” she says. That’s right. With a very kind and nurturing tone she continues, “There’s a pimp in all of our wallets, dear.”
The pimp she is referring to are banks. As a small business owner, Quarles says that she has been forced to charge more to take debit and credit cards. To avoid passing the costs on to all customers, she charges a fee to those who wish to use a card.
“My cash register has the $1.00 processing fee [posted]. We merchants can’t keep carrying the weight of these fees,” Quarles says.
She is baffled as to why anyone would prefer to use a card over greenbacks.
“Whenever I can only make a quarter of a penny in keeping my money, and a man I can’t see makes 2.79 to 3.29 percent, who are you and how did you get in my wallet," she says.
Quarles says she wants to empower everyone to take charge of their finances, and that denying the banks access to your full purchase history is one big step. That by using cash, you keep the man out of your wallet, and you avoid paying fees like the one she is compelled to charge.
As to why she doesn’t just transition to an all-cash business, she says, “I tried that when I first started. When I tried to take [the card reader] out, the convenience factors were overwhelming me. Everyone with a job had these cards. I couldn’t say no,” she stresses. “If I didn’t have [the card reader], I wouldn’t have sold anything because people weren’t going to go and come back to me with cash.”
Longtime customer Janae Tucker says that she and her partner, Darren Turner, often hear Quarles’ “pimp in your wallet” spiel.
“We always get lectured,” Tucker says. Darren Turner jumps into say that he doesn’t see it as a lecture, but as a lesson.
Quarles is happy that her words are taken as a lesson and haven’t fallen on deaf ears. She says that getting the pimp out of peoples’ wallets is a battle she will continue to fight.
“We are in a serious crisis when people believe that the card in our hand is going to suffice better than the cash in our wallets. The cash in your wallet allows you to pay your children an allowance to teach them how to manage their own saving.”
And with a smile, she slides the debit card, hands over the merchandise and says, “Take your power back.”
From the Marketplace Datebook, here’s an extended look at what’s coming up next week. Yep, a whole week. So grab a seat:
- The first singing telegram is believed to have been delivered on February 10, 1933. Oh, how thoughtful.
- Every dog has its day. Or in this case, two days at the top of the week. The annual Westminster Kennel Club Dog Show takes place in New York City.
- It was sixty-five years ago that we met the character Willy Loman when "Death of a Salesman" premiered on Broadway. In a recent revival the role was played by the late Philip Seymour Hoffman. Miss him already.
- On Tuesday some people observe Get Out your Guitar Day. I don’t. and I’m so glad my neighbors don’t either.
- On hump day…a look at the nation’s balance sheet. The Treasury department issues its monthly statement for January.
- February 14th is Valentines’ Day. If you haven’t bought a card yet do it now or you’ll end up with something less-than-fantastic because those guys who thought ahead have already cleaned out the cool cards with nice sentiments. Go. Go now.
- And we started with dogs, this is for the birds. To benefit our feathered friends, the annual Great Backyard Bird Count begins on Friday. Creating a record of where the birds are. I’m exhausted just thinking about it.
Noah Bryson Mamet's admission follows other embarrassing Obama nominee performances in the Senate.
You might call the January jobs reports released this morning A Tale of Two Surveys. First, there’s what's called the establishment survey, where businesses are asked how many jobs they created. Last month? Just 113,000 of 'em.
Not so good.
And then there's the household survey, where households are asked how many people are working. That one showed more than 600,000 new jobs last month, and helped kick the unemployment rate down to 6.6 percent. So which to believe?
Well, if conflicting employment reports stress you out, close your eyes and imagine the beach.
Doug Handler is chief U.S. economist for IHS Global Insight. He says the survey where tens of thousands of households reported that nice bump in employment is less precise than the payroll data.
"It’s like trying to predict the amount of water in the ocean by looking at the waves here,” he says. “You can broadly get a number, but from minute to minute or from month to month it’s tough to predict."
Plus, the household survey and the payroll tabulation measure slightly different things. Harry Holzer is an economist and public policy professor at Georgetown University.
"The self-employed in the household survey will say that they are employed, and there’s no such category in the payroll numbers, cause it’s only for employees," he says.
While many economists prefer the payroll survey, they say there’s something to the optimism in the household survey. That it should temper the gloom of the last two payroll reports. (December’s weak report was revised upwards to just 75,000 new jobs.)
Mark Vitner is managing director and senior economist at Wells Fargo. He knows folks were disappointed when they first saw today’s numbers.
"They said, well, the unemployment rate’s been declining but it’s been declining and it’s all because of a drop in the labor force,” he says. “Well, the labor force didn’t decline, it actually increased."
He says low job gains in December and January may have been caused by weather. And he says those disappointing payroll numbers may not look so disappointing if you see where the growth took place. Construction and manufacturing jobs are actually picking up, which he thinks is pulling people back into the labor force.
The Olympics has issues, ranging from construction problems to gay rights to the threat of terrorism.
But on Twitter and Internet message boards, the big complaint is against NBC for not broadcasting the games live.
During the last summer Olympics, media expert Jeff Jarvis was one of the folks complaining about the lack of live Olympics programming.
"This time, it doesn’t make much difference to me," says Jarvis.
For one thing, he can access lots more live games this year being streamed over the Internet. He would like to see more live sports televised, which Jarvis argues wouldn’t be bad for NBC’s business.
"As it turns out, when we knew what the results were from some events in the summer, it even drove more audience to watching the event. So I don’t think that having it on live necessarily takes away from also having it tape delayed in prime time," says Jarvis.
From a marketing standpoint, Jarvis can appreciate what the tape delay means for NBC.
"The advantage, additionally, of having tape delayed coverage is they can edit the heck out of it, and make sure they never run long so that you keep watching when they put in their favorite new sitcom."
Or, NBC’s reboot of the Tonight Show. During the Olympics, NBC will be promoting it non-stop
"I think we’ll see a lot of promos for Jimmy Fallon. I think it’s very smart that NBC is premiering the show February 17, while the Olympics is still going on," says Brad Adgate, senior VP of research for the ad buying firm, Horizon Media.
Other advertisers are eager to get their message on during the games too.
Compared to the demand from advertisers during the last winter games, Adgate says advertiser demand this year is "certainly a lot stronger this year than... in the Vancouver games of 2010."
NBC reportedly paid a little less than $900 million to produce and broadcast the Olympics coverage.
The network reports selling more than $800 million worth of ads so far. That’s a record for the winter games.
What better way to get through a difficult time than by investing in yourself?
If you’re a person, that can mean meditation, self-help books, eating right, and exercise. If you’re a company, that means buying your own stock. It’s called a stock buyback, and Apple just did it in grand style: The company has purchased $14 billion of its own shares in the two weeks since reporting lackluster financial results, and watching its stock price tumble.
"The reason the company’s doing this is that they’re trying to send a message to the market that they have confidence in the company’s outlook," says Bill Kreher, senior technology analyst for Edward Jones. "They believe the market misunderstands their story and is undervaluing their future prospects."
I’m good enough, I’m smart enough and doggone it, people, buy me!
But valuing itself isn't the only reason Apple is buying its own shares.
"It’s kind of like hush money," says Paul Kedrosky, parter with investment bank Garibaldi Capital. Kedrosky says Apple investors are frustrated their shares are losing value and, meanwhile, Apple’s sitting on $160 billion in cash reserves, and doesn’t appear to be investing in new research or buying up other companies.
"You don’t get to have it both ways. You don’t get to hang onto it, not buy anything, not spend more money on R&D and say, 'By the way, you investors can’t have it.' You don’t get to do that. You’re a public company and you have obligations. They created this trap for themselves and now they’re stuck."
Investors like stock buybacks, because they usually increase the value of their stock. "The cool thing is, if you’re a shareholder you discover that suddenly, you own a bigger fraction of the company," says James Angel, finance professor at Georgetown University. There are fewer shares for sale, so those shares are worth more.
That’s a lot of self love.
All told, Apple has said it plans to spend about $60 billion dollars on stock buybacks.
Stephen Kim, who was indicted in 2010 for allegedly revealing top-secret information relating to North Korea, will reportedly serve 13 months in prison as part of the plea deal.
The Assad regime and rebel leaders agreed on a plan to allow some civilians to leave the besieged city and to let some aid go in. On Friday, about 80 people were brought out. The group was mostly older men, but included some women and children.
The breathtaking lack of women in the tech industry has a real effect on one of America's most important economic and innovation engines. Join our running conversation on the cultural changes at play and what to do about it.
Bewildered in the wine aisle or staring at a wine menu? A cheeky infographic offers solid advice on getting the most bang for your buck, whether you're looking for wines to cook, date or get drunk with.
The Curiosity rover has sent back an image that shows a tiny bright dot over the Mars horizon. It's Earth. Compare that to other famous photos of our planet taken from space.
The activists unfurled a banner quoting the Olympic Charter's ban on discrimination. Preceding the Olympics, Russia passed a ban on gay "propaganda."
Montana Gov. Steve Bullock appointed his number two, John Walsh, to serve out the term of longtime Democratic Sen. Max Baucus, who was confirmed Thursday as U.S. ambassador to China. The appointment gives Walsh a brief incumbency advantage going into an expected tough fall battle.
The government's closely watched employment report for January looked very weak this morning. There were just 113,000 extra jobs recorded, when professional forecasters, already aware of the bad weather, were expecting something closer to 180,000. Yet, the government found the labor force expanded slightly and the unemployment rate fell to 6.6 percent. Some of the difference here may be that the first survey comes from the government asking businesses: how many people you got on your payroll. And second is from the government calling people at home asking, who's working?
And, we talk to an actual human being behind the government statistics on the labor market that were released today. Last fall, we spoke to Maureen Cunningham, who at 51 recently moved to Florida, when her husband retired. Before the move, she'd arranged to keep doing a version of old job from the new location. But now she's stuck looking for work again and we wanted to check in.
Also, there will be some useful fine print when the Federal Reserve today releases what it calls it's G-19 Consumer Credit report. This obscure calculation will tellsus a couple of things: including how much credit is being extended to consumers, and how much debt we are collectively carrying. Marketplace's Noel King has more on how much debt is too much.
Rapper DMX is talking about stepping into the boxing ring with George Zimmerman. But the Barbershop guys ask whether it would be better for both men to step out of the spotlight.
As the Winter Olympic Games get underway in Sochi, host Michel Martin speaks with Russian culture expert Jennifer Eremeeva about what the opening ceremonies can teach us about Russia and its people.
Hundreds of thousands of people are put on probation every year. Now, a study by Human Rights Watch finds private probation contractors are racking up profits and effectively criminalizing poverty. Host Michel Martin discusses the issue with HRW's Chris Albin-Lackey and Rhonda Cook of the Atlanta Journal-Constitution.
Some Democrats think the party has a strong bench in the event Clinton declines to run for president in 2016. Not everyone is convinced.
Spain's royal family, which used to face little criticism, is increasingly becoming a target over its spending habits during Spain's economic woes. The king's youngest daughter, Infanta Cristina, and her husband have had their mansion confiscated are now facing allegations of fraud.
Q. WHAT IS THE DEBT LIMIT?
It is "the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments," the Treasury Department explains.
Basically, Congress appropriates money for projects and programs, then lawmakers have to give the executive branch permission to pay those bills.
Q. OK. BUT WHAT IS THE ACTUAL DEBT LIMIT (IN DOLLARS)?
After it expires on Friday, February 7, 2014, the Treasury Department will use what are called "extraordinary measures" to keep the government solvent for as long as it can. The government can move money around. It can defer investments in certain intragovernmental accounts, better known as trust funds. These include the Thrift Savings Plan, for government employees; the Exchange Stabilization Fund; and the Civil Service Retirement and Disability Fund.
The department already suspended sales of State and Local Government Series (SLGS) nonmarketable Treasury securities "until further notice."
Q. WHEN DO THESE "EXTRAORDINARY MEASURES" RUN OUT?
Treasury Secretary Jack Lew predicts this will happen by the end of February.
"At different times of the year, these extraordinary measures provide more or less of a cushion depending on variables that we cannot control," he says. In February, Americans are beginning to file their taxes, and the Treasury Department is cutting a lot of refund checks.
The Bipartisan Policy Center tracks this closely, and it predicts "approximately $198 billion of extraordinary measures will be available at this time."
Q. I'M HEARING PEOPLE TALK ABOUT AN "X DATE." WHAT IS THAT?
The "X Date" is when those "extraordinary measures" run out. At that point in time, the government will no longer be able to pay its bills.
The Bipartisan Policy Center forecasts that will fall between February 28 and March 25. It is hard to be more specific, because you can’t know in advance how much money the government is going to take in and how much money they government is going to pay out.
Q. WHAT WOULD HAPPEN THEN?
I'm only half kidding.
The government, which makes millions of payments every day, wouldn’t be able to make good on all of them. It could default on Treasury bonds. Economists and investors predict that would lead to a huge downturn.
Q. COULDN'T THE GOVERNMENT PRIORITIZE PAYMENTS, JUST PAY SOME BILLS BEFORE OTHERS?
The Treasury Department has maintained that this would be both impossible and legally dubious. As New York magazine's Kevin Roose notes, "The problem is that there aren't really any less-important things included in the Treasury's regular payment schedule. It's all stuff like food stamps, Social Security, military pay, unemployment benefits, and federal worker salaries. So these choices would be really, really painful."
Q. WHY DOES THE U.S. HAVE A DEBT LIMIT?
"Congress used to approve borrowing project-by-project," Marketplace’s Nancy Marshall-Genzer explains. "Eventually, that incremental budgeting got too cumbersome."
The first limits on borrowing were imposed during World War I. The Second Liberty Bond Act of 1917 set a $15 billion limit on government bonds.
"That set the precedent for giving the Treasury Department a cap," says Donald Ritchie, who runs the Senate Historical Office. In 1939, Congress set a limit on debt of all kinds.
"This measure gave the Treasury freer rein to manage the federal debt as it saw fit," the Congressional Research Service says.
Q. HAS IT ALWAYS BEEN SO CONTROVERSIAL?
Until the 1970s, it wasn't, really.
Amendments to the Second Liberty Bond Act "were not partisan," says Richard McCulley, an historian with the Center for Legislative Archives. "They were supposed to help the Treasury Department manage the federal debt. ... That has morphed into this incredible headache for the Treasury now."
Q. HOW MANY TIMES HAS THE GOVERNMENT RAISED THE DEBT LIMIT?
"Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents," the Treasury Department says.
According to the Senate Historical Office’s Donald Ritchie, this is always "a burden on the majority party."
"Nobody likes to increase the debt limit, even though it reflects what they have already authorized and appropriated," he says. "They don’t like to do it. They never have liked to do it. But you have to. It’s a responsibility – the fiscal responsibility – of the federal government."