The idea the credit card companies have to raise rates from 7% to 30% overnight, just because a person is a day or two late with their payment, is ludicrous.
Take a look at your bills folks. If you’re one hour late paying your bill, you will be charged a “late”, “penalty”, or some other version of a fee, related to your tardy status. Generally that’s a $25 to $35 dollar fee.
The credit card company doesn’t have to hire more staff to have this facilitated. It’s computers do the task for it.
If you’re paying 7% interest and you’re a day or two late, the $35 fee more than makes up for any loss. One could say yes, but that’s just for one account. They loose gazillions if everyone is late. Yes, and they gain gazillions by charging everyone $35 because they are late.
If you pay your card late, you also pay interest on a higher amount that you would have. And so the repayment schedule is pushed on out one month, and the credit card company makes more money as a result. If this happens across the board, another words if say 100,000 accounts go 24 hours, the credit card company stands to make a significant increased profit due to this small individual increase in interest rate paid.
These credit care companies plead that their business model is destroyed if people pay even one hour late. Like hell it is. That’s not true.
The public is getting jobbed by these exhorbitant interest rates folks.
You can make all your payments on time all year, and be paying off less than 20% of the sum total of the money you sent in.
I figured it out recently. It could take you 30 years to pay off a loan making your minimum payment, if the interest rate is 30%. That is flat out abusive, and should be a criminal act.
There’s no call for that under any circumstances.
Fine. Don't like it, cut up the cards. A market-based solution that doesn't need to government to get involved. But people are too damned lazy to take matters into their own hands, so they call on Uncle Sugar.
“The idea the credit card companies have to raise rates from 7% to 30% overnight, just because a person is a day or two late with their payment, is ludicrous.”
They are raising rates on EVERYONE. Our rate just went to 29.99%. We always pay early and keep a low balance. We’re closing the card this week.
The obvious solution is NOT to make the minimum payment. Pay 15% of your balance - not 2%...
Credit cards companies do take advantage of those who "can't wait" for things - but so does everyone. It's the nature of the system.
You want it "right now" it'll cost more.