The truth about credit cards

The average American family has eight active credit cards. Not surprisingly, the same family has eight-thousand dollars of credit card debt. But are credit cards inherently evil, or are consumers simply looking for excuses? In this article we are going to try to answer that question.

We will begin with minimum payments. Yes, minimum payments are evil, or at the very least they are deception. Essentially, the minimum payment is the payment the credit card company has determined is the most likely to keep customers in debt forever. It is just enough so that they will make a small profit every single month, ad infinitum. The minimum payment also encourages customers to go deeper and deeper without any threat of a fine or penalty.

We know this because most credit card companies will instantly raise credit limits when they see that a customer who customarily pays the minimum is approaching their limit. In the end, these minimum payment suckers are the bread and butter, the cash cows of the credit card industry.

Another fact that may pique your interest is that there are currently over one and a half billion active credit cards in the U.S. Why so many? Well, as we mentioned, each family has about eight of them, and younger users are even more dependent on credit than older ones.

How about the history of plastic? No, credit card companies were not always the greedy, usurious corporations that we know and loathe today. In fact, credit cards began as charge accounts that were offered by specific stores. They were meant to be convenient and to encourage customer loyalty.

We should also talk about the power of credit. You see, credit cards aren’t normal bills. For instance, when you are a day or two late on your lighting bill, the company will often let it slide, or they may charge a dollar or two. But not credit card companies! It is their job to charge loyal customers as much as they possibility can when they are even a minute late on their payments.

But wait! It doesn’t stop there. Credit card companies are also free to raise your annual rates once you commit the unforgivable sin of being a minute late with a payment. This is all perfectly legal because the term credit card regulation is an oxymoron in America.

What don’t you know? Probably the most popular myth is that credit card companies hold all the power. Yes, it is true that they have an awful lot of it. But in the end, they do depend on their customers.

So, if you discover that your company has been raising your rates, call them up and demand that they reduce them. It might seem a bit simple, but trust us. If you’ve been a loyal customer and you pay your bills on time, they won’t want to lose you.

Lastly, there is no such thing as a fixed-rate credit card. Companies have the right to change any so-called “fixed” rate with prior notification. All they have to do is send the customer a letter that says their rate is going up and they can charge them more in the next bill. So, be wary of promotions that extol the benefits of fixed-rate credit cards.