Why do credit companies keep giving us credit knowing we have a bad history.They know we can't pay it back?

Answer 1

because they want to make a lot of money off of consumers... it is all about their wallets...

Answer 2

Most credit card companies are only interested in sucking the life out of anyone they can in any way they can. I recently had a credit card with Capital 1 where my minimum payment was $70. $50 of this went straight to interest and only $20 applied to the principal. My balance was only $2200. It's easy to see that I would have never paid this off at this rate even if I had never made another purchase. It was my fault for not reading the fine print about cash advances but still, the trap was laid by Capital 1. The kicker was that even after I had a $0 balance I still had to pay an additional $40 in interest. The simple answer is that most credit card companies are scum.

Answer 3

Unfortunately this is how credit card companies make their money. They extend you credit, know that you can't pay all of it back in a lump sum, then charge percentage rates that are sky-high.

For example: if you buy your groceries on your credit card, if, for instance, your total charge is $200 - if you don't pay the entire $200 back within one month, the credit card companies then tack on their finance charges at a sky-high rate. By the time you get done paying off the $200 you spent for groceries, in some cases you will have spent double the amount. The same goes for something the you buy on sale. Once you are actually done paying for it, if you've allowed time to go by and you are paying the finance charges, your sale item is no longer a sale.

The best suggestion is to "beat them at their own game". Whatever you buy (using their money by using the credit card), pay the ENTIRE bill at the end of the money. In essence you will be doing back to them, what they would be doing to you. You will be using their money (without putting any of your own up front), and then when you pay it off at the end of the month, it will have cost the credit card company in order for them to lend you their money. You get to use their money and then pay no penalty. Not only will you have EXCELLENT credit built up, but you'll be able to enjoy the use of the credit card with no hidden fees.

Have a lovely rest of the day.

Answer 4

Many of the credit card companies securitize (sell) their credit card accounts, and your credit "risk" gets combined with others and sold into a "pool". There is value in the overall pool (volume), therefore the more the better, even if the risk is higher. Further, the rates they can justify for your credit are substantial enough that even though you MAY NOT pay, someone else with 22% interest costs, will pay and make up for what they lose on you (plus a profit). You need to be smart enough not to trap yourself into overextending yourself

Answer 5

it's all about the interest. with a 18.9% or higher interest rate on some cards, companies make alot of money when people just pay the minimum payment forgetting the when the pay so low (say 500 dollars) they may be paying in actuality about $1000.

Answer 6

If you have a questionable credit history, they can charge you a higher interest rate because you probably need the credit. Then they make more money.

Answer 7

Because they recoup it from people who do pay thier bills.

Answer 8

Its called tax write offs and they make money off commissions.....you are a statistic..........they make their money trust me.............!!!!!!!! You are the sucker not them......!! In the end you are the ruined one.......and they are still rich. Thats why. They always profit.

Answer 9

because they want to make money off the interest you pay when you max that next credit card out.. please.. don't do it!

Answer 10

not all people are like that...some of us deserve the 2nd chance. others are quickiy ruining that for us.