The ethics of credit card companies has to be in question. They are one of the few businesses that can change the rules on you and there is currently nothing you can do about. The credit industry is not your friend. They want to get you to borrow money from them and to keep you in debt for as long as possible. This way they have a constant flow of revenue through the interest payments, late charge fees and over the limit fees. They have many practices and charges that most people don’t know exist and are helpless to combat. The credit card industry has gone unchecked for way too long. The credit card industry lures you in with deals and rates that appear to be great bargains but are often misleading. Consumers should beware and always read all of the fine print and terms and conditions. If you proceed carefully though there are times that you can use the credit card companies to your advantage, but be careful it is easy to slip into the habit of saying I’ll pay it off next month and carrying the debt way longer than expected. Below is an actual advertisement that shows you how the credit card companies actually lure you in.” (Visa)
•0% Intro APR for Up To 12 Months on Purchases and Balance Transfers •No Annual Fee
•FREE Online Account Access
0% Intro APR on Purchases, Balance Transfers for 12 months
10.99% Regular Variable APR for Purchases
20.99% Regular Variable APR for Cash Advances Bonus on First Purchase: n/a 20 days Grace Period
(* 0% Intro APR for Up To 12 Months on Purchases and Balance Transfers)
Important Notes:Estimate Reward Earnings
The APR for purchases varies according to the applicant's credit history and will be 5.99%, 9.99% or 14.99% + Prime Rate. See website for complete terms and conditions of card usage and application disclosure.” (Credit Card Flyers.com)
How good of an offer is this? 0% for up to 12 months and then it will be 5.99%, 9.99% or 14.99% + prime. Did you catch the key phrase plus prime? More than likely they will charge you the highest rate. “Credit card issuers have set up an intricate trap of terms, fees, and penalties that renders it hard for many Americans to pay off their balances. Credit card issuers set minimum payments at low levels, so that it takes consumers decades to pay off credit card debt even in the absence of new charges.” (Consumersunion.org) $5000 charged with a rate of 20% and a payment of $100 a month will end up taking 107 months to pay off without adding any new charges to the card. In essence it will cost you $5700 to borrow $5000. All of the rules favor credit cards currently favor the credit card companies. About one-third of cardholders pay interest rates in excess of 20%, according to a report from New York-based think tank Demos. Also, borrowers with one slip-up can incur a "cascade" of penalties and end up in a "trap" of high-cost debt, the report said.” (Cardholders caught in credit 'trap': report, 2007) If they thought they were doing things the right way why would credit card companies make it part of their contract to have all disputes settled through an arbitrator? This is because they are fairly certain that if they were taken to court they would lose and have to pay some hefty penalties for some of the practices that they currently use.
With millions of users you would think there would be a big push to fix some of the predatory practices of the credit card companies. Predatory rings a bell doesn’t it? These companies are pushing people to the limit and are quite possible for responsible for some of their own issues. Why isn’t more being done to curtail the practices of the credit industry?
The answer is the lobbyists have significant power with congress. “The credit card industry has several associations that back its play; they may have coalitions. The American Bankers Association is the largest and most powerful. It claims...