Credit Card Companies

If you believe the advertising, they are the consumer’s best friend. If you get the new whatever card, not only will all your finances suddenly become manageable and organized, but you will reap benefits beyond the imagination: double and even triple reward points that can be used to purchase all kinds of wonderful stuff (never mind if it’s stuff you don’t need) and purchase travel with “no blackout dates.” Actually the “no blackout dates” would be nice; my frequent flyer miles seem to have nothing but blackout dates, but that’s another story. One might think that instead of “benefits beyond the imagination,” the companies might just offer reasonable interest rates and minimal penalties. But then one might be incredibly naive.

Is it my imagination or do the credit card companies function just a tiny bit like drug dealers? Don’t the pushers on the street corners offer you a free trial of the newest mind-bending substance - don’t worry, it’s not really additive - in order to get you hooked. Only to then charge exorbitant prices for their product down the road, when you’ve got to have it. Likewise, have you ever received a credit card solicitation offering up to tens of thousands of dollars (emphasis on the “up to”) at just 3%, 2%, or even 0% interest? Just sign the check, attached for your convenience, and the money is yours to use any way you please. You can even pay down your other high interest credit cards (of course not our high interest credit cards). “Don’t worry, there aren’t any catches,” or at least none you’ll know about unless you read the tiny print on the back of this offer, something that anyone with a microscope handy can easily do.

Should you actually read the back of the offer, you may discover that your 0% interest rate automatically becomes 14% to 18% within a few months. And should you be foolish enough to make more than the minimum payment on the balance, rest assured that the additional payment will pay down the 0% balance, nothing at a higher rate. By the way, don’t even dream of being late on a payment; the rate could jump to 29.99% or higher (evidently 29.99% is significantly lower than 30%) and stay there, forever. I guess the reasoning must be that, if you are having trouble making your payments at 15%, doubling the interest rate will certainly solve the problem.

If for some unexplainable reason it doesn’t solve the problem, it gets even better; but that also is another story.