Bankruptcy Follows Credit Card Debt

Credit Card rates are zooming up again, even though our banker buddies CREDITcards

get their money virtually FREE from the federal government.

Well, technically, from the Federal Reserve Board, which is a

collection of, yes, private banks.

BUT IT SAYS ZERO PERCENT FOR CASH ADVANCES???

Yup.  Though most of them charge at least 3%, up front, for those cash advances.

Hey, full disclosure, I have done these myself.

They are called teaser rates for a reason. They are temporary, usually less than a year.

Even earlier, if you do something heinous, like make a payment late.

And then.  And then?  BIG INCREASE.

Gregory Breisiger in the New York Post says those credit card teaser rates go up to 21%, or more.

Yikes!

Even at 3%, the credit card companies are making 6 times, or more, on their money.

Many people are forced into bankruptcy when credit card rates jump, because that raises the minimum monthly payment to something they cannot afford.

BUT IT LOOKS LIKE SUCH A GOOD DEAL!!

They are made to LOOK like a good deal.  They are a good deal, for the other side.

Papadimitriou added that the increased use of cash-advance loans is a worrying trend. These loans trigger interest the minute the loan is taken and have no grace periods. The fees on these loans went up in the first quarter by some 10 percent, increasing to an average of $12.31, CardHub said.  (From the NY Post story linked to above)

Why are you borrowing this money?  What are you doing with the cash advance?

Do you have to spend this money NOW?

How do you plan to repay it?  Over time, with minimum monthly payments, at 20% plus interest?

The credit card companies know that is not your plan, but it is how they make tons of money.

Don’t be their sucker.  Don’t help them make you a candidate for bankruptcy.

 

 

 

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