Lower Minimum Payments Keep Credit Card Users on the Hook Longer

Newhouse News ^ | TERESA DIXON MURRAY

[E. Pluribus Unum]

Anyone who runs a credit card balance is a moron. Period. Especially if they think they aren't. They are stealing from their future selves.

[Eugene Tackleberry]

You are correct. I used to work in the industry. It is an industry that preys on the ignorant and the poor. I quit largely because I could not live with myself knowing that my job was to deceive as many people as possible into getting themselves into debt.

[The Magical Mischief Tour]

Again… just like politics the sheep are asleep at the TV remote.

They don’t care; in fact they probably rejoice and celebrate when the minimum payment is dropped by charging up more debt. They are blind and stupid to this issue and the credit card companies love every minute of it.

Bankruptcy’s are up and I’ll bet the primary culprit that drives the average person to declare is credit card debt.

I remember growing up, a credit card was unheard of and later when I was old enough to understand such a thing, you had to go and retrieve the application from a bank, fill it out and provide a company with reams and reams of financial background and even then some good folks were turned down just for lack of info never mind bad credit.

Today the credit card companies might as well have their own mail service. The preapproved, just sign your name and your done apps are hitting my box at the rate of three to five a week.

They have made it so that all you need is an address and a pulse and you can qualify for $1,500.00 on a Visa or MC. It’s even more maddening when you hear of someone’s dog, little Joey’s bowl of fish or that brand new Sig 229 you christened with a nickname receives a preapproved supper-duper gold plated, double jewel incrusted Visa card complete with titanium carry case and a 7.2 billion dollar credit limit.

Personally I hope the card companies go the way of the dodo bird.

TMMT

[SpyderTim]

You each make good points. However, there is more to it than just that. Yes, running a balance from month to month is really stupid. But if you are in a financial bind or unemployed, you may have no choice because you cannot afford to pay more. If you are responsible, of course you will pay off the entire balance each month. Responsible usage of credit cards means that you take advantage of them in emergencies. If you have enough money to pay off the entire balance, then by all means, unless you are an imbecile, you will!

[Optimist]

Credit Card abuse (from the corporate side) is rampant:
not only have due dates been changed to NOT coincide with statement date (in some cases reduced to 2 weeks from statement date) which in those cases guarantees that your payment will NOT be in time (allowing for all mail times-especially post 9-11), but in some cases even cuts off the business day BEFORE the mail arrives!!!

how many of us are excited when we get those low interest introductory rates for balance transfers? (gee I didnt know my credit was THAT good.....
SURPRISE!!!! It's not and they know it!!! ALL credit card agreements have clauses allowing for exorbitant fees for late payment and even allows them to cancel the agreement you signed... often allowing the interest rate to go from 0%, 2.9%, or 4.9% to as high as 25% or more!!!! And, by the time you realize it happened you are already paying the higher rate. The really sad thing is THEY KNEW from your profile that you would probably pay late (and if you don't, they'll find a way to force a late payment on you--see above)

Oh, and thought you were getting a great low rate on transfers to your current card? Hope you didn't already have a balance, because even if you pay off your ongoing or past purchases, payments are not applied to only the current purchase or past balances, but are instead divided between the transfer and other purchases resulting in guaranteed high interest fees on recent balances that you thought you were paying off in favor of keeping a high balance on the low interest transfer amount.

In short.... pay off balances as soon as you receive the statement (on-line payment is even better to avoid snail-mail delays) CHECK, CHECK, CHECK your statements for charges by the CC company and don't be afraid to complain to A SUPERVISOR! Some of the stuff they are doing is REALLY sleazy!

[SpyderTim]

A major problem with the article is that it states the obvious. Unfortunately, our decaying education system means that all too many high school (let alone college) graduates, don't even realize these basic mathematical, economic, financial -whatever you want to call it- realities and need even the most basic principles spelled out for them in an article.

[Robert A Cook PE]

Remarkable facts.

More remarkable that they are surprised by this trend ....

... given today's 24-hour/da TV/radio/magazine ads of "Just do it!" and "Whatever you what - Whenever you want it.... Immediate gratification...."

[WVNan]

When I buy a big ticket item I put it on a credit card. Then when I get one of those 0% for six months deals, I transfer the balance and pay it off at $200 or #300 a month. I've transferred balances so often, they may catch onto me. Well.....why pay extra interest if you don't have to?

[Optimist]

our decaying education system means that all too many high school (let alone college) graduates, don't even realize these basic mathematical, economic, financial -whatever you want to call it- realities

which is why students (often without income) are the #1 preferred group targetted by CC co's. After all, Mom & Dad will bail Johnny and Mary out of that $1000+ debt...can't have society think that they are irresponsible.

[Optimist]

From post #6:
Oh, and thought you were getting a great low rate on transfers to your current card? Hope you didn't already have a balance, because even if you pay off your ongoing or past purchases, payments are not applied to only the current purchase or past balances, but are instead divided between the transfer and other purchases resulting in guaranteed high interest fees on recent balances that you thought you were paying off in favor of keeping a high balance on the low interest transfer amount.

[SpyderTim]

Sounds like you've figured a way to beat the system. I hope you know what you're doing. Some people think they can pull various schemes to beat the system and then they find out that the company has anticipated such a move. At least they're not on to you yet. That's exactly what I meant by being responsible with credit cards. It can be done if a person can think logically. For example, I generally just use one for paying for gas, or eating out. I pay the full balance off immediately.

[scan58]

ping

[Newbomb Turk]

Credit card companys make your local loan sharks look like a pretty nice guys don't they. No loan shark has ever sent me mass mailings 4 times a week begging to lend me money at 25%.

[WVNan]

No, I only get the ones that indicate 0% on transfer balances. I don't put anything else on them and pay them off before the six month period is up.

[THX 1138]

The latest trend is that senior citizens are running up big debt on cards. What's happened to that generation?

[DennisR]

I do the same thing.

[WVNan]

I'm careful and have my favorite card that I use for smaller purchases and pay it off monthly. When I buy a big ticket item I put it on one of the "other" cards. Then I transfer the balance (I get 5-6 offers a week) to a 0% on balance transfers card and pay it off within six months. Then I "mothball" that card until I buy another big ticket item. Then when I transfer the balance the old card gets cut up.

[SpyderTim]

Glad to hear that you're currently on the winning side. Have you seen a copy of your credit report lately? It'd be interesting to see how it would be described.

[SpyderTim]

Insert "your scheme" for "it."