Greg Tunks is the founder of the credit card collecting hobby. He was also the editor of the Credit Card Collector newsletter in the eighties and nineties.
Credit Card Collector: How’s the state of the hobby?
Greg Tunks: It depends on how you want to look at it. It’s somewhere between all-right and great.
CCC: How do you want to look at it?
GT: I look at it two ways. What it is and what it can be. What’s happening right now is basically better than most hobbies. Art, antiques and collectibles have been, in general, getting killed across the board. I mean in almost all fields of interest, prices have been dropping.
A collector told me just today about how he talked to a man who dealt in classic automobiles. The dealer said he had recommended some kind of rare car to a client a few years back. He was shocked when the guy wouldn’t pay $400,000 for it. He just couldn’t believe how stupid the guy was.
Well, that dealer is still sitting on that car. He can’t even get $125,000 for it today. At least, this is what I was told.
I’m pretty familiar with coins. Basically, I think you can say they have dropped an average of 50% in the last two years. Some did better. Some did worse.
The State of the Credit Card Hobby in the Nineties
CCC: So how does all this tie into credit cards?
GT: The point I’m trying to make is I think this hobby is caught-up in an attitude game. Because of the general negative attitude towards collectibles and the economy, credit cards get hit with the rest of them. There are some reasons that are justified for this happening. But there are others that show it shouldn’t be.
CCC: Such as?
GT: I think it’s easy to believe that if collectibles are down and the economy is down, then credit piece prices should be down. That appears to be a logical assumption. It’s also a self-fulfilling prophecy. It’s all based on attitude. Basically, I think the hobby is doing it to itself.
CCC: So you say the hobby has a defeatist attitude?
GT: Basically. It’s not really a question of if the attitude is there. The question should really be, “Should it be there?” The answer again is there’s some justification, but not really.
CCC: Are you going to give some specifics of justifiable problems?
GT: Sure. One example is the credit piece club that started and failed. That got a lot of people mad at me since I wouldn’t support it. Some people look at the club’s failure as a direct responsibility of mine?
CCC: Was it?
GT: I don’t think so. It’s always easy to blame someone else for what goes wrong. I wasn’t in on the planning of the start-up of the club. I’d prefer not to get into real specifics on this issue. I think there’s still some hard feelings out there. Some guys have dropped out of the hobby over it.
The one thing that did affect Credit Card Collector, from the club, was a time period when responses fell-off.
This hobby and publication is small, its lifeblood is getting new people to join it. Since there is a limited amount of money to promote the hobby, most of the promotional aspect comes from free publicity.
When the club got started, it picked-up support from certain hobby and collectibles publications. That’s exactly the way it’s supposed to work. But it created one problem. Since this hobby is small, most publications will give it space. But only a small amount of space. This is understandable.
But the problem was when the club was getting publicity, publications didn’t need or want to run more about credit pieces. In other words, there’s enough room for publicity for either the club or Credit Card Collector. But not enough room in publications for both. So basically, when the club was getting publicity, Credit Card Collector wasn’t. That means the leads from free publicity, that is the life-blood of this hobby, mostly were going to the club.
Of course let me say, I didn’t like it. But it was only fair from all these editors’ and publications’ points-of-view.
But the problem from my point-of-view is that it cut-off all the new leads over here. It also cut-off the flow of information. Historically newsworthy happenings of the hobby weren’t getting into print in other fields. That really hurts. That’s what really attracts new collectors.
Anyway, since the club never got off the ground, all the leads from the free publicity have sat. No one has ever done a thing with them. So, the leads that usually keep the hobby growing have basically just gone down the drain. They’re dead. No one ever used them.
CCC: So you’re blaming the club for some of the problems?
GT: No. I’m just saying what happened. I didn’t know how to counter it at the time. Actually, it was my fault. I really don’t have much experience with countering actions like that. There aren’t books you just go out and buy that tell you what to do. I’m sure there are marketing books, in general, that tell you how to handle similar situations in business.
But I’m not aware of hobby marketing books or information on how to counter specific problems. It was probably three or four months before I even began to realize what was taking place.
It was my fault. I now know what to do. But I didn’t at the time.
CCC: What should you have done?
GT: That’s something I’m keeping to myself. I may need to use it sometime in the future.
CCC: So you’re blaming yourself for all hobby problems?
GT: No. I wouldn’t say blame. I accept responsibility. Who else is there to accept it?
CCC: So if you’re responsible, what are you going to do to turn things around?
GT: First. Things don’t need turning around. They just need to get momentum going in the right direction.
Things can’t need turning around when you’ve got a collector offering a record price for one credit card.
CCC: You’re talking about Walt Thompson’s offer.
GT: Right. One collector is offering $1,500 for a Mint 1950 Diners’ Club card. The previous record for any credit piece is $525.
Offering to buy a piece for three times the record price is a sign of definite demand and strength. You don’t set record prices because of lack of interest.
CCC: That’s just one card and one collector.
GT: True. But the market could probably handle half-a-dozen of those pieces at that level.
It’s like the paperboard American Express. I feel the prices are very strong for that card. It’s not a matter of if prices are holding or even able to go up. The demand for the card is there. I know of at least half-a-dozen collectors who have contacted me wanting one.
The problem isn’t getting the money. The problem is getting the cards. The cards are sold. I just need to find them. I’ve bought one in seven years. So you see, it’s a tough card, but there’s a line of collectors waiting to get one.
When prices of $1,500 and $350 for low grade American Express cards are stable and possibly able to go even higher, I wouldn’t consider this a hobby that needs turning around.
Collecting vs. Investing
CCC: What needs to be done to get things moving?
GT: First, there needs to be an attitude change. People are so·busy looking at no inflation, rising unemployment and a discount rate of 3%. But the point collectors seem to miss is all of that is totally irrelevant over here.
We’re a hobby. Plain and simple. People continue to collect and start collections everyday. People think that prices should be down and the hobby dead because they see this happening in other fields. But the other fields, and particularly the old established large ones, aren’t us. The old big fields do often run with economic cycles. But we shouldn’t. There really is no or little justification for it.
Let me give you an example: Let’s say a person likes to snow ski. He has the cost of the skis and all the other equipment. To use the skis many people have to go on trips to lodges. All the equipment and expenses of using that equipment isn’t considered a good or bad invest-
ment. It’s a matter of what the individual enjoys doing. The only profit and loss is whether the individual had a good time or not.
What I’m trying to say is this is a hobby. It’s a form of recreation. It’s supposed to be a form of escape and relaxation. There shouldn’t be any pluses and minuses over here, except in whether you enjoy building and looking at your collection. If you enjoy collecting and your collection, there’s your profit.
The skier doesn’t sit down after every ski trip and figure-out how much his equipment depreciated. That’s ridiculous. He went for a good time. The only thing the skier is going to do is get out his photos of the trip and reminisce about the good time. Try to relive the experience. He’s escaping into another world. A world he enjoys. No profit or loss. Just fun and relaxation.
That’s exactly what a hobby·is supposed to do. So you see, if a person is really a collector, his profit comes from owning and enjoying his collection. I think you get my point.
CCC: So you’re emphasizing collecting and not investing?
GT: Of course. That’s the whole mix-up. There isn’t investing over here, or there shouldn’t be. We’re a hobby. We’re not Wall Street. Credit pieces are collectibles, not investibles.
That’s where all the confusion comes. Collectors don’t care what way prices go, they’ll keep collecting. Let me rephrase that. It’s not top priority with them. They’ll keep collecting and forming collections.
An investor is different. I-le just wants to make money. But most of the negative attitude directed at credit pieces is because of economic reasons. This shouldn’t exist over here. Any investor needs liquidity.
This hobby doesn’t offer it.
CCC: Doesn’t the economy affect a collector’s disposable income and the amount he can put into credit pieces?
GT: Yes. But again, let me say a lot of that has to do with looking at this as an investment.
People are still going to movies, renting videos, going on vacations and going out to eat. People still do fun things. That’s what collecting is. A fun thing.
My point is people continue to have fun and relax despite the economy. It shouldn’t affect us.
CCC: Wouldn’t it be easier if inflation came back?
GT: Sure. But who can wait?
I know people who have been waiting since 1980 for gold to go back to $850 an ounce. That’s 11 years ago. But the problem with waiting for the economy to get a collectible moving, is you can have a real long wait. Remember, 11 years and still waiting. They can wait another 11 years, maybe?
Instead of waiting for something to come along and get things moving, it’s usually best to rely on your own creativity.
There’s an old expression about that: Waiting for something to turn-up?
How about beginning with your sleeves. (Continued in our next article.)
Copyright Greg Tunks, 1992
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