Secrets of the Credit Card Industry

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I found an incredible episode of Frontline today about the credit card industry. New York Times did a related report as well as illustrated how to read the fine print (as seen in photo above).

Did you know that credit card companies have their own jargon for its customer categories?
“Revolvers” roll credit card balances over month to month, never paying in full.
“Deadbeats” pay their balances off in full every month.
“Rate Surfers” or “Gamers” shift usage between credit cards based upon interest rates.

Also, here are some of the facts about them:
Credit card companies can increase your interest rate if you miss a payment with any other creditor? In other words, don’t miss any credit payment on any of your credit cards or they might all go up in interest rates.

According to the Better Business Bureau, out of 1000 industries they track, the credit card industry is number one in consumer complaints in the nation.

Credit card companies make more money from fees than interest collected. Today late fees are 4-6 times more than they were 10 years ago. Last year CitiBank was more profitable than Microsoft or Walmart.

You can watch the documentary online in five chapters through Frontline’s site.

5 thoughts on “Secrets of the Credit Card Industry

  1. Nadine: Credit Cards are evil, but you can make it work to your advantage. I personally go for rewards type of cards that give me either money back or discounts with every dollar spent. Also, some good cards give you additional warranty and purchase protection on goods that you buy. In the U.S., it is especially important to use credit cards as it is the best way to build credit history, which then gives you “reputation” to get a cell phone, or lease on a car or home.

    If you don’t want complexity, then don’t use a credit card. 🙂

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