Clueless about Credit Cards
Posted by Gail | Filed under Debt Traps
I’ll bet you right now that you haven’t read your credit card agreement. If you have, I owe you a cuppa. But if you haven’t, you have to mail me a tea-bag: RR#1, Warkworth, Ontario, K0K 3K0. I like Earl Gray, but you can always send something you’re fond of and I’ll try it!
So, why don’t people read their cardholder agreements? Could it be that you just can’t handle the mouse-print? Hey, I feel your pain. Or maybe it’s because the language the credit card agreement uses is total baffle-gab designed to obfuscate and confuse.Do you even know the interest rate your card it charging you?
If you look at your last statement and find yourself surprised at how much you’re paying in interest, it may be because some card companies practise hair-trigger re-pricing, moving people quickly from low rates to high penalty rates. If you miss your due date by even one day on a low-interest introductory rate, you’ll find yourself paying a much higher percentage in interest.
According to Robert Manning, author of Credit Card Nation: The Consequences of America’s Addiction to Credit, the cost of borrowing money on credit cards has tripled since the early 1980s. It’s not just the ridiculous interest rates that credit companies charge, it’s also the variety of fees and punitive clauses that have people paying exorbitant amounts. So why do we pony up and pay? What’s wrong with people? Why would you use a card charging 18, 24 or 29 percent in interest, and then add on a “member fee”, an “over-limit fee” or an “account balance premium”?
According to www.consumer-action.org, 94 percent of credit cards charged over-limit fees ranging from $20 to $39 monthly until the cardholder’s balance falls below the limit. The average late fee is about $28. And penalty interest rates can run as high as 32%. Ouch!
The biggest reason people end up paying too much to credit card companies is that they don’t shop around. People commit to a card because it offers points, travel miles, or some other incentive and then they stop paying attention to their costs. Want to find out how you can get a better credit card? Check here to see what’s for sale.
Remember, you’re buying credit. And if you were buying a house, a car, new furniture, or a new computer, you’d shop around, right? (You better say, “Right, Gail!”) So if you’re buying credit, you should shop around.
You can’t go whining about how much the credit card companies are ripping you off if you’re too lazy to find yourself a better alternative. And if you don’t even know what you’re paying, that’s just dumb!
Feel like kicking up some dust? Drop a barrage of email to your credit card company telling them you want your agreement in English and in a print size you can actually read, why-dontcha?
