What Credit Companies Don't Want You To Know

Introduction

A lot of people really detest credit companies today. This should come as no surprise though whenever you consider their shady tactics and how they prey on people who are in need. Here are some of the numerous secrets that the credit card companies are trying to hide from you.

 

Things They Don't Want You To Know

• Credit companies are one of the most profitable businesses in the U.S. today with annual earnings of $30 billion, which is more than Microsoft or Walmart.

• There are 640 million credit cards in circulation within the U.S. alone.

• Between 1996 and 2005 there was a 46% increase in the number of credit cards issued by banks.

• In 2004 credit companies earned $43 billion from fees alone (i.e. late payments, over-limit fees, balance transfer fees). Between 1995 and 2005 the payment fees spiked 115%. According to the GAO (Government Accountability Office) the fees went from an average of $13 to $34.

• Since 2004 there has been a 10% growth in the number of Americans who are using credit cards. Today approximately 14% of all Americans have more than 10 credit cards.

• In 2004 approximately 39% of all Americans paid off their entire credit card bill each month. This means that approximately 60% of all people carry a balance with credit companies, which is scary whenever you consider that some credit companies do not even offer a grace period whereas in the past a 30-day interest free grace period was common. Today though there are credit companies that have 0, 10 or 20 day grace periods. Approximately 40% of these folks carry a balance of less than $1,000 though.

• If you choose to use credit companies, you really need to carefully read through all of the terms and conditions before signing the application. This is the “fine print” where the credit companies hide all of the costly items that you need to know about. For instance, herein you will find how long of a grace period you will be granted. The information is important in order to avoid paying interest (pay off your purchases before the end of the grace period, if there is 1, and you won’t be charged interest).

• Beware of what is commonly referred to as “bait and switch.” Herein credit companies will offer you 0% offers that will lead you to think that you could transfer your high interest debt to them in order to save yourself a lot of money. However, you should know that most of these cards don’t offer you a reasonable limit and thus you won’t be able to do this. Unfortunately, you won’t realize this until after you have accepted the credit card offer.

Conclusion

Now that you know about some of these secrets, you can make up your own mind on how you feel about them. In the end though you will probably decide that you don’t like them much either. At least now you’ll have some ways of backing up this dislike.

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