MetaCard the one and only virutal credit card company has given up, cancelling service to card holders. This comes just as the “Credit Card Accountability Responsibility and Disclosure Act of 2009,” or  CARD Act comes into effect. Although not necessarily connected, as a person who received a letter stating that my credit card account was closedshould; I do wonder if First Meta, feelling the effect of the CARD Act decided to cut it’s losses  and hold onto it’s Aces and let go of it’s low card (the increasingly troublesome MetaCard).

MetaCard’s announcement to credit card holders and merchants states that it has been attempting to bring  a virtual credit card to Second Life(r) since 2007 and have recently decided that it is not viable. During my studies in the top ranked entrepreneurship program I learned quite well that you have to change with the times, and when something that has once been profitable becomes unprofitable, you do what is necessary to keep your business running. Although I make no assertations regarding what the law says or means, I do quite openly suggest that First Meta’s decision to end MetaCard offerings has a great deal to do with the changes brought about by the CARD Act.

An article in the ABA Journal gives a look at the implications of the CARD Act. The Act  outlaws double-cycle billing and interest rate hikes, requires 45 day notice of changes to significant terms of use, and requires bills to be sent at least 21 days before their due date.  Because I made a concious decision not to get a MetaCard (I have enough trouble dealing with the three, now two, cards that I have now because I don’t like to owe people for anything), I cannot even begin to know which of these or the other provisions of the Act cut the MetaCard profits to the point that First Meta felt the need to stop service. I do though trust in capitalism just enough to believe that having to make these changes would cut into the companies profits enough that the stockholders would, symbolically, riot.

The main benefit, as I understood it, that MetaCard offered was the ability to go into debt. For example, if someone wanted to buy a house that costs 2000L$ but only had 20L$ available, a MetaCard holder has two options: 1. buy the L$ from Linden Labs(r) or 2. using their MetaCard and paying the balance later. A person would presumably prefer using the card only if they want to spend more than they currently have and can get directly through Linden Labs(r) because of the daily purchase limit or they don’t actually have the rl (real life) money available to buy the L$ at the time they want to spend it. In either situation, but especially the latter, the use of the card is exactly the same as the use of an rl credit card. This similarity, along with the similarities in terms, suggest to me that MetaCard would be affected in a similar way that rl credit cards are affected by the CARD Act.

The major difference between rl card companies and First Meta is that avatars don’t usually spend as much as often in general thus don’t spend as much as often using MetaCard. Many people, like myself have made a concious decision (and many more an unconcious decision) not to use credit to make purchases on sl. Not least because doing so could end up requiring the use of an rl credit card to support their sl credit card. Using one credit card to pay off another is generally only advocated in an effort to get rid of credit card debt entirely (sorry no link but if you watch enough talk shows and read a few “getting out of debt books you’ll find it). Using a credit card continually to finance more debt is not generally considered…ummm….it’s not the smartest move.

MetaCard is also a young company; one that many similarly young merchants are do not use. Where rl credit card companies are decades old and accepted by most stores, incorporated into bank accounts and university identification, and have huge advertising budgets, MetaCard is new and only accepted at a small percentage of the many businesses in Second Life(r).

Considering the, presumably, slow growth of MetaCard use by consumers and merchants, it is not hard to see how, if the rl credit card companies are scrambling to save their profit, the damage to MetaCard could be crippling to the point of causing them to cancel service.

***I could not think of a title that did not have some kind of poker analogy in it – MetaCard folds, CARD Act up’s the ante, First Meta’s last chip, etc. All of them were bad for titles, so I just went with what I did. I would, thought like to end by in a non-poker way, so here goes***

(a moment of silence and then mournful music begins to play)

MetaCard’s death was sudden. I remember when I heard the news I simply could not believe it. MetaCard was too young but as it slowly occurred to me I have realized that MetaCard indeed lived its life wonderfully.  MetaCard is in that wonderful place where interest rates are high and everyone pays the minimum balandce and we are here on its funeral. This is not the time for us to grieve its death but it’s our time to celebrate its life. Don’t ever forget MetaCard. It never wanted to see people walk away from a good deal. He wanted to make every consumer happy. MetaCard will forever be missed but I know in the right time, I will meet MetaCard again. We will all meet MetaCard again and it’ll make us buy, buy, buy.

(everyone rezzes their MetaCard prim on the bonfire and edits them to be temporary. As people begin to teleport out the stream begins to play “Another bites the dust”)