In part two of "The House Always Wins", we head to Washington DC to eat Amtrak hot dogs and learn infuriating revelations about the credit card industry and the specific, sneaky ways it works to keep us in debt forever. (This is part two of a two-part episode.)Follow Debt Heads on Instagram, TikTok, Substack, Patreon and YouTube.Credits:Writing/Editing/Production: Jamie Feldman & Rachel WebsterTheme Song: "Pay For That Money," Written and Performed by The Defibulators, PigCow Publishing (ASCAP)Original Score: Ali HelnweinAudio Mix: Jeff SeelyeAdditional Research: Jenny Selig ★ Support this podcast on Patreon ★
Chapter 1: What is the main theme of 'The House Always Wins' Part Two?
Hi, this is Jamie from Deadheads. This is Episode 2, Part 2. A lot of people loved Episode 2, Part 1, so if you haven't listened, you should do so. You might also love it, and you'll definitely be less confused. Okay, enjoy Episode 2, Part 2 of Deadheads.
In our last episode of Deadheads, we met Donna Helper, the radio DJ who discovered the band Rush. I would take a client out to lunch... And the server would give the check to my client. We learned about something called the Marquette decision and how that affects our interest rates.
No.
Off the top of my head, no. And I got some great advice from a financial expert. Hey, Siri. Uh-huh? Can you tell me how to get out of debt? This week, we'll speak to not one, but two muckraking journalists, one of whom started as an insider in the credit card industry.
In 1997, I moved to New York City, and it began my long, slow journey to becoming an adult. Right across the street here was Lincoln Plaza Cinemas, which was the best. R.I.P.
It's so crazy that we both spent some of our formative years here.
I know.
I was in college. And I was right around the corner in high school. And we were the exact same age, and we were always friends.
Prior to this move, I had hoarded all of my babysitting, pizza delivery, and art framing income in a modest savings account. But when I got to college, walking the New York streets all by myself, I figured I needed more. And when I entered a bank on 66th and Columbus Avenue, the eager sales associates convinced me to get my first credit card. I remember feeling that this bank really got me.
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Chapter 2: How does the Marquette decision affect credit card interest rates?
MasterCard was invoking a deep-seated sense of FOMO by connecting priceless human moments to things, well, with prices. And that philosophy of spend now, pay later, hashtag no regrets, would come to represent exactly how credit cards would undo the middle class in 21st century America.
Welcome to Deadheads. Welcome. Deadheads is an investigation into the American economy. From the perspective of people in debt. Like us. Like everybody. I'm Jamie. And I'm Rachel. And we named this podcast after ourselves.
Because we know firsthand what it's like to lose sleep over debt.
To live in denial over debt.
To get out of debt, but find ourselves falling back into it.
But most importantly, to start questioning why and how. America became a country full of deadheads. The chase card has the most because that's my highest limit. The limit is 16,000 and it's like about to be maxed out. So, and that's a 20.24%. Yeah. So let's,
Run the numbers on that. So that's... So as a reminder, Jamie was working with five credit cards when she started her debt journey. Yeah, you won't let me forget it. And all of them carried a balance. But once we got them laid out, figuring out how to pay down that debt was going to require some math. A tall order for a couple of art school kids.
We need like maybe to have somebody who knows how to do math. Maybe we should get a mathematician. Getting out of credit card debt was looking harder by the minute. Each minute costing 20.24% more in interest. You know, it would be a lot easier as if we just had a certain amount of money and then we use that money and then we didn't go, we didn't borrow money.
Yeah, that would be easier. That would be really amazing. Ah, to go back to a time when we didn't borrow money for literally every single thing. When was that?
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Chapter 3: How does MasterCard's marketing influence spending habits?
In the late 90s, when MasterCard debuted the Priceless campaign, they had been suffering as a company. People were concerned about debt, and there was a backlash.
So they came up with a new idea to peddle, which is, life is short, we'd better live it to the fullest. Budgets be damned.
One autographed baseball, $45. Real conversation with 11-year-old son. Priceless. Priceless. There are some things money can't buy. For everything else, there's MasterCard.
There are plenty of things that money can't buy. But this ad makes us question, do we need to buy a $45 autographed baseball to have a real conversation with our 11-year-old son? Certainly suggests that it would be helpful and a lot more fun.
When you have a credit card, you don't really have to ask. And when Alina finally left Capital One and set out to interview dozens of people across the country, she found that this is exactly how people were using the credit cards.
I'll give an example of something that came up multiple times when I was interviewing people, which is like attending the weddings of friends and family members. If this was 1916, you needed to talk to a community banker and like sign something in paper before that person would hand you a check. Would you be like, excuse me, sir, I want a loan to go to my cousin's wedding? Probably not.
But would you put it on a credit card if you weren't completely sure whether you were going to pay it off in full that month or not? Statistically, yes, a lot of people do that, right? And so there's a lot of things in that middle category, which are not pure wants, and also not pure needs. And I think that middle zone is a huge, huge driver of debt.
As emotional creatures with a strong desire to connect, to show love, to create meaning, we will always do these very human things, if we can. An easy access to credit makes it nearly impossible to draw a hard line between what we want and what we need.
Is your kid literally going to die if they don't get anything for Christmas? Well, no, but is our cultural celebrations like an essential cornerstone of how we derive meaning in this world? Yes.
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