Oh, the scourge that is the credit card!

[Ruken]

Exactly. Thus there are excellent reasons for responsible adults to have multiple credit cards.

[Cat_Whisperer]

@PunditLisa

Perhaps, but like cash advance places, it’s really easy to avoid being taken advantage by usurious interest rates. Don’t use them.

That’s true. The problems with credit cards fall into the category of “Keeping stupid people from doing too much damage to themselves.” I’m not sure how much stupid people should be kept from doing too much damage to themselves - if they couldn’t ruin their lives with credit cards, maybe they’d find some other way to screw their lives up. On the other hand, there are A LOT of stupid people, and they do A LOT of damage to themselves.

[Moonlitherial]

@the lone cashew

I agree that credit card companies charge high interest rates. But as long as this is made clear from the get-go, and they don’t change the policy on you once you’re committed to owing them money then I don’t think there are grounds to bitch.

I mean, damn the credit card companies - for providing you cash without you putting down any collateral and no strings attached - save for the high interest rates that should be made clear before you make your decision to borrow the money.

I am sick and tired of people being overjoyed to have the money made avail from a credit card, but then after chalking up some serious dept using it damn the credit card all to hell. If you don’t like the rates, don’t use the card. It should be that simple.

I think part of the problem is that people are just not taught about personal finance. My parents believed that everyone should trust experts (Listen to your doctor, the bank manager will take care of you etc) so when the credit card company says “You’re so wonderful you can have a payment holiday this month” and “Just pay this much back” I believed them. I got in a lot of trouble in my early 20’s with credit cards. I agree you can’t blame the credit card companies for that.

I think the legislation about the information they have to write on the card is a good idea but an even better one is for part of the high school math curriculum to cover applied math. Personal finance, loans, investing and how numbers can be manipulated by someone trying to take advantage of you.

[Hari_Seldon]

@Noone_Special

ETA: GuanoLad, I know interest rates for CC’s are usurious, but I strongly doubt even they can get away with charging $75 monthly interest on $4,000 capital…

Doubt all you like, but that isn’t even especially high. $75 per month in $900 a year and that is “only” 22.5% of $4000. It seems to me that many CCs charge closer to 30%. It seems to me I just saw one at 29.9%. That would be $100 per month on $4000.

Good for the Australian government. If people were aware of what these things cost them, they might stop using them. I use them constantly though. I get a 1% rebate on purchases and never pay a cent of interest. I will have a balance of, say $3000 on the 23rd of every month, but I have arranged that the bank will pay it from my chequeing account every month on the due date which is the 24th. Since I get a rebate of about $400 every year, I know that I am, on average, charging about $3500 a month.

What I don’t understand is why the merchants aren’t offering me a 1% or even 1.5% rebate if I use a debit card or (god forbid) cash instead. Clearly they are paying more than my 1% rebate, probably at least 3 times more. And why does the bank even allow this automatic payment, which cannot do their bottom line any good? 'Tis a puzzlement.

[Noone_Special]

@Hari_Seldon

Doubt all you like, but that isn’t even especially high. $75 per month in $900 a year and that is “only” 22.5% of $4000. It seems to me that many CCs charge closer to 30%. It seems to me I just saw one at 29.9%. That would be $100 per month on $4000.

:eek::mad::eek:!! That’s not approaching usury, that is usury!!

According to my bank’s web site, my current yearly rate would be 5%. Yes, 5%. Granted, I have perfect credit and a “prestigious” card; but browsing various bank sites I haven’t been able to find a base rate, for the simplest local credit card, going over 15% annual. I don’t think it’s legal here (Israel) to charge more that something like Prime + 10 or 12%; and the prime rate is somewhere around 3%, I think? (I could look it up if anyone cares…)

[PunditLisa]

@Cat_Whisperer

That’s true. The problems with credit cards fall into the category of “Keeping stupid people from doing too much damage to themselves.” I’m not sure how much stupid people should be kept from doing too much damage to themselves - if they couldn’t ruin their lives with credit cards, maybe they’d find some other way to screw their lives up. On the other hand, there are A LOT of stupid people, and they do A LOT of damage to themselves.

Remember Blockbuster? I had a friend who racked up hundreds of dollars in late fees every year because she couldn’t be bothered to return the movies she rented. And Blockbuster was on her way to work! Now, on the one hand, I can agree that it’s a bit pissy of a company to charge more in late fees than they’d have to pay to replace the movie altogether. On the other hand, it’s hard for me to muster much sympathy for a woman who knows the rules and knowingly repeats the same mistake over and over again.

I think a good portion of folks who are stuck paying a lot in interest charges aren’t at all stupid. Rather, I think that they’re not disciplined enough to put off until tomorrow what can be brought home today.