Senate slams banks over credit practices
When I heard about the recent Congressional hearings regarding the practices of credit card companies, the first thing that came to mind was it’s about time. The last session of Congress just sat back and allowed the CC companies to do whatever they wanted. Kind of like the cart blanche some people say they gave the Executive Branch.
On one hand, you have to blame the people (in part) who rack up the debt in the first place. The guy in this article initially started the debt as a result of a wedding. Going into a marriage in debt is not a good start, stupid move Wesley. If you know you don’t have the money, why have a $3,200 wedding? He could have spent less than $100 at a justice of the peace. Or waiting until he had saved enough to pay for the wedding. And how many times was the credit card used after the wedding? Another bad move Wesley, don’t keep using the card if you already can’t pay the balance in full.
The credit card companies make most of their money through interest, not the transaction fees they charge merchants. So it’s in the CC companies best interest to have customers who can’t afford a credit card. Those are the ones who are most likely to have CC interest and therefore bring in profits. CC companies increase credit limits, or let people go over them, in order to collect even more interest and/or over limit fees. Why don’t they just shut off the card when it reaches it’s limit? It works for most debit cards, no money, no charge. The answer is profits. CC companies don’t care about consumers, they only care about profits for shareholders. Also, there ought to be a law that says everyone is automatically opted-out of all credit card offers. If someone wants a credit card, let them seek it out. CC companies should not be allowed to tempt consumers with offer after offer through the mail. It’s like a beer or wine company sending ads to known alcoholics anonymous members. Or a cigarette company sending free cartons of cigarettes to people with a drug prescription to stop smoking. Trust me, cigarette companies would do it if they could.
The worst thing about credit cards is, we all need them. This is how a history of credit is built and contributes to a person’s credit score. Without credit cards, no credit history and therefore, low credit scores. Which in turn leads to high interest rates on the loans/credit cards that the person can get.
The policy in our household is cards are always paid off in full every month. I take advantage of the interest free loan time and pay the card on time. If you can’t do that, then just rely on a debit card or cash. Don’t give away your money to CC companies.
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