Banking is a highly competitive industry. If a bank charges too much, customers will go elsewhere. Other banks will undercut them to win the business. Interest rates aren’t arbitrary—they reflect competition, risk, and market forces. If banks were truly gouging people, new lenders would step in with better deals.
That said, credit cards are the biggest source of compounding debt. Their rates are high because the risk of default is high—and compounding interest can stack up fast. The key with credit cards is to use them sparingly and pay them off quickly.
Most people like having a credit card for emergencies. But if you don’t like the rates or how interest is charged, don’t use it—that’s your choice as a borrower.
Cash back options, some as much as 4%, can reduce your overall expenses. I use an airline rewards card because I enjoy the travel points.
Credit cards are also convenient, so I don't have to keep a large balance in my checking account. Each month, I move money out of a savings account to pay my balance in full. I pay no interest, earn rewards points, and might earn a little extra interest in my savings account.