Aren't credit card companies some of the biggest crooks around?

Question

I just went over on my credit card by a few dollars because the company decided to give me a 34 day billing cycle this month. My interest was 181 and I only had 177 available credit. I paid enough last month to be able to cover the interest this month because I knew I would no longer be able to pay my bill any more as my savings is depleted and I don't make much money. My interest rate went from 21% to 29% a couple months ago even though I never missed a payment or was late or over in the past 4 years that I have had the card. This made it more difficult because I used the available credit on that card to buy groceries. Now I was paying most of the payment in interest. I think credit companies make it harded to pay off stuff even when you intend to. I guess I don't have to worry about being over because I can't pay my bill any more anyway. If my interest would have been kept reasonable my payment would have been lower and I could have paid longer.

Please note to the person who suggested I cut expenses. I don't have cable, a car, and just basic phone service (necessary to keep in touch with my daughter and for work). I buy cheap groceries, nothing extravagant and as far a eating out, once a week at mcdonalds with my daughter, no movies or anything, just the basics. No insurance though so I charge 700 twice to have some molars pulled. Only other option was to suffer in severe pain.

Answer 1

Most of them are unless you have immaculate credit. But yes, they nickel, dime, and $29.99 you. I despise them but in this day and age they're a necessary evil.

Answer 2

If you call the credit card company and explain what happened a lot time they will reduce the credit back to where it was. You could also apply to another card company with a lower rate. You may also get a lower rate if you can get parents to co-sign.
As far as them being crooks, not really. Not that the rate is justified but the do end up loosing a lot of money by people skipping out. Sometimes late payments and over-limits are signs of potential bankruptcy. The real crooks are the political leaders of our country. I always though we had a government FOR the people, but too many politicians are FOR the company. These are the people who passed the laws allowing such high interests. Years ago it was against the law and people were put in jail for this. It was called loan sharking. What makes the politicians think that it is OK now?

Answer 3

I do agree. With credit card companies now a days it is a losing battle. I am working on paying all mine off now and never getting any ever again. Strictly a debit card for me from here on out.

I would like to see stricter legislation against the credit card lenders with the interest rates they are allowed to charge, debt collection practices, and especially how much credit should be extended to someone. Even if someone is only allowed a $1500.00 credit line total for all credit cards, I think that is fine. I think credit card limits for all cards allowed should be capped at like a 4 or 5% total of your net yearly income.

But then again, we the common people are not the ones lobbying the politicians trying to make a killing off people who have come across hard times.

Answer 4

I work in the financial services industry. I help people get out of debt and trust me I have seen reality of how the debt creation industry works. They may not be crooks per say but it is a legalized shell game with our money. I have heard a saying that what you don't pay on the front end, you pay on the back end meaning you are allowed to charge hundreds if not thousands of dollars in credit and pay it off in low monthly installments and that is the front end..

On the back end, because of the low payments, you are agreeing to extend the life of the debt with interest for many years some times even a life time and beyond. This is obviously the power of compound interest. The reason I am going into all this is because I am trying to illustrate the lending industries intentions.

As far as your interest rate going from 21% to 29% is no accident. the company will set it up to where it is very easy for you to mess up and there for they are able to raise your rate in return raising their profit margin.

To be honest with you I think this is a disease in our society. It's not just credit cards but also mortgages, car loans and personal lines of credit. The goal is for us to rent out our lives to the lending industry. Even the word MORTGAGE, mort-,pertaining to death as in mortician or mortality and gage- meaning agreement . So the word mortgage means agreement untill death. So yes you are right, they don't want you to pay your debt off.

My best advice to you is when you are able to get in a better financial position work on paying it off by paying more than the min pmt. thus reducing the time in debt. Please avoid taking out another card to pay this one off. Again the reason I went through all this is to make clear the intentions of the lending company. I wish you the best.

Answer 5

Credit card companies make their money by hiking interest rates. On the other hand, they don't want to lose customers. Call the company. Explain your situation. And, let them know that you want to make a monthly payment and is there anyway they might be able to lower your rate. After all, if they don't work something out... then you won't use their card. Stay nice and calm when you call, and let them know that you appreciate their service and that you very much want to use the card in the future.

Answer 6

Its so avoidable....don;t use credit cards. Cut them up and pay them off. Live debt free. Imagine all the worries that will go away without debt.
Its a long road...but is so worth it, believe me.
Make out a budget, make every dollar count and work for you. Stop using the CC and pay them off - smallest to largest. Put down a plan on paper - on purpose.

Chekc out www.daveramsey.com Look into "Total Money Makeover"

Answer 7

29% interest rate is outrageous. 21% is aweful. You need to find another credit card company to use and transfer your balance to them. Try Capital One or Citi, they have both done well for us. Citi always runs the 0% for x amount of months as well.

And start a savings account $25 automattically withdrawn from your checking shouldn't break you. It is a start and that way when you need new tires or brakes on your car you can pay cash.

Answer 8

I think you are looking at it wrong, Sorry to say this.

But the credit card companies are selling a service and renting you the use of money. When you use the card, you are agreeing to all the terms and conditions associated with the card.

When you goof up, or if you don't make the agreed to payments, why shouldn't you be held to the conditions of the card.

The reason for the high interest rates is to cover the cost of doing business, the cost of paying for all the stuff we all buy, before we pay between 15 and 45 days in the future, and to cover defaults and fraud.

Be thankful, that someone will give you credit, because life is tough without it. Protect your credit rating.

Answer 9

No, they are not crooks. Your intentions to pay, or the reason you used the credit is irrelevant. You were offered a deal, you accepted it, and it turns out you are not able to pay. How is that the credit card company's fault?

Answer 10

He used the money unusually for the same reason that William Aramony president of the United way of us of a of america lower back in 1992 did ($463,000 gross sales and advantages kit, a lavish fee account and monetary manipulations interior the introduction of various spinoff businesses), because he might want to.

Answer 11

If you call and explain this to them, they will work with you. If not, then tell them you will have to file bankruptcy(but dont' really do that). They will rather get some money from you than none at all. If they won't help you, then transfer that money to another card. Most offer 0% the first year. Good luck....I agree, they are crooks.