Credit Card Dirty Tricks
by Sapphire (February 6, 2005)
Don’t miss this program: frontline: secret history of the credit card | PBS. You can watch it on RealPlayer, or at least read the accompanying articles.
What’s so important to understand from this report is: the credit industry is not one in which the business wants the consumer to fulfill his obligation to them. This is totally contrary to all business sense, and yet it makes sense once you understand. They want you to fail, because they make as much money from late fees and over the limit fees as they will ever make from simple interest.
I’m lucky - I was taught not only responsible but clever credit card use at a young age. In 16 years of having credit cards, I have yet to pay interest (and I was unemployed and living on my cards at one point). You can make credit cards work for you, if you are careful, watchful, smart, and never miss a beat.
But what so many Americans don’t get is that your relationship with your creditors is adversarial. Most businesses want to give you as little as possible for your money, and you want to give them as little money as possible for what you want, but there’s no deception necessary. You watch for sales; they try to sugar-talk you into impulse buys. You resist the sales pitches; they only run sales when it’s in their interest. It’s a game, but it’s not a war.
Credit cards are a war. I know someone who has better credit than I do, yet I get 10 card offers a week (always with 0% interest for 6-15 months) and she hardly gets any. Why? Because I carry a balance, and she doesn’t. There’s a thin chance in hell I will default, or go further into debt. Her credit history is simply too clean. They don’t want good customers; bad customers are their lifeblood.
I’m getting off the credit bandwagon. The debt I racked up while unemployed is being paid off at a nice pace, and no new debt is being added. I pay cash everywhere I go, or use my ATM as a credit card, so it’s straight out of the bank account. Credit has served its purpose in my life - I used it to my advantage in a crisis, and I would do it again if I had to.
Make sure you’re not getting played by creditors. Read the fine print. Track the dates that special interest offers expire. Call them if you get confused - mine must be sick of hearing me call up with, “Yeah, when does that 0% interest expire, and is it on purchases or just balance transfers?” If you send a payment, make sure it gets there on time, and gets recorded (Providian was caught holding payments to make them late a few years ago). If they don’t get there on time, all you need to do is call and ask them to note on your account the date you sent the check or electronic payment. I’ve done this several times, and never been charged a late fee.
Take care of your credit: the credit card companies want you to fail.
Posted in The BS Files
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