Posted on 11/26/2004 10:39:36 AM PST by Racehorse
If you pay your bills on time and generally pay off your credit card balance each month, credit card companies aren't really interested in you.
The money is made by charging an interest rate that can capriciously hop up and down, slamming you with outrageous late fees and making sure you never want to pay more than the minimum payment.
"I don't know any merchant in America who can change the price after you've bought the item, except the credit card industry," says Harvard law professor Elizabeth Warren in the film. "These guys have figured out the best way to compete is to put a smiley face in your commercials, a low
introductory rate and hire a team of MBAs to lay traps in fine print."
Under the law, credit card companies can change your contract with only 15 days notice. They can also raise your rates not only if you are late on your credit card bill but also if you have been reported being late on any bill.
Late on your mortgage? That's not just between you and your lender anymore. While the mortgage company can't use that tardiness to change the interest terms on your current loan, credit card companies can use that information to hike interest rates on your plastic.
"(Banks are) raising interest rates, adding new fees, making the due date for your payment a holiday or a Sunday in the hopes that maybe you'll trip up and get a payment in late," says Robert McKinley, founder and chairman of Cardweb.com and Ram Research, a payment card research firm. "It's become a very anti-consumer marketplace."
So when you start that shopping this week, remember that the money you save on that sale item probably isn't worth spending the next decade paying it off.
(Excerpt) Read more at insidebayarea.com ...
If the credit card companies aren't interested in me, then why do I get at least 6 offers of new credit cards in the mail every week? According to them, I'm a terrible customer.
I've had the same CC company for over 10 years and haven't paid a dime in interest to them. I've heard about CC companies dumping responsible customers, but it's never happened to me....yet.
I'd give anything to earn a buck on every pound of junkmail I get too.....
One of my low low low interest rate cards sent me a notice of a rate hike. I cancelled the card, but they had to keep the terms of my current low low low rate. :) I told them they just lost a customer--a very good one--because THEY chose to hike my rate.
So now, I have a balance at an EXTREMELY low rate that I am paying off.
CC companies only lose money when they try to jack up rates on customers who are prompt with payments.
These type of shenanigans are why I don't have a credit card. I have a visa check card that does a lot of things a credit card does except charge me outrageous fees and allow me to pay later (and more) for an item. I save my debt for my car payment (and later this year, yay!) a mortgage.
I thought it was the JDs (Lawyers) who did that.
DiscoverCard must really hate me. I charge everything on that card, and pay it off monthly. We usually get a few hundred dollars back from them (Cashback bonus) every year. Have been doing it for about 7-8 years now.
The real dirty little secret is that they make between 1.5% to 3% on each and every transaction that the merchant pays for. This is before they charge the consumer a penny for interest, fees, etc.
I keep getting offers for new credit cards, even tho I'm retired. Go figure.
I seldom carry any balance on mine, but I've heard the new interest rates are upwards of 28 to 29% on those 'penalty' rates for slow payers.
Same here. Occasionally we don't pay it all of for a couple of months, like around Christmas in some years, but otherwise we do pay everything off every month. The credit card companies always treat us just fine.
Let me get this straight - you are advocating government interference in the private business between credit card issuing banks and individual consumers, above and beyond the plethora of consumer protection laws already on the books. Are you sure you are on the right Web site?
It's a Free Market society. I wouldn't want it any other way. You should "shop" for your credit card just as you shop for anything else from a washing machine to a car, to a house. And learn to avoid all "store" credit cards. They are the fast-track to being totally broke.
I don't blame the cc companies for hosing those that aren't informed. There are usury laws on the books that protect people against the totally unscrupulous, but with everything, it's best to just let the buyer be ware.
And what are these people doing living above their means in the first place? ;) (My personal "crusade" is financial management for my household and businesses while thwarting the Tax Man at every turn. This bores most people to tears, but I love it!)
Changing the interest on an amount already charged under the contract.
Changing the interest because the holder has a debt problem elsewhere, even when they make their credit card payments.
We have 1 card and pay it off monthly. Best practice.
Save to share with my son...
so much for usary laws...
Smart people like you (and myself) who keep tabs on their finances aren't affected by any credit card company shenanigans. It simply isn't that difficult to beat these companies using their own rules.
I really have no sympathy for people who can't keep this stuff straight. Would they consider driving a car with a towel over their head? No. Then why do they use these cards blindly and not watch every penny? I can't figure it out.
Not only has my CC not dumped me, they upgraded my account to platinum, without my requesting it. My credit line was more than adequate before, since I pay off the balance every month. Maybe they're hoping if they raise my credit limit, my eyes will bulge out at the amount, and I'll go crazy buying stuff on credit, and not be able to pay it off every month. Sorry. That's not going to happen.
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