I've said it many times, most recently yesterday, businesses can't be trusted to regulate themselves. At least now the Dems are looking into the credit industry, something the Rethugs, who are beneficiaries of Big Bank, failed to do:
WASHINGTON - Some members of Congress are denouncing credit card industry practices that include raising interest rates for customers whose credit ratings decline, even if they make their card payments on time.
Industry critics say it's one more example of abusive, confusing practices that can push consumers deeper into debt.
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Of course they're confusing. It's what allows the industry to get away with so much. Most of the people charged with overseeing these clowns don't even understand how some of these 'creative vehicles' work.
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In March, the subcommittee focused on complex billing and interest-rate practices, such as charging interest on balances paid on time but not in full, and so-called double-cycle billing _ which eliminates the interest-free period of consumers who move from paying the full balance monthly to carrying a balance.
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I learned something a long time ago. In this day and age, a credit card is a requirement, there's so much you can't do unless you have one. That said, pay attention to the terms before you get one. If they send you one without you asking (you're preapproved!) don't take it. Getting a credit card shouldn't be a chance happening between you and the fourth-class mail. Shop for a card the same way you do with everything else. Read the fine print especially.
Don't have a million cards. It's not free money. Use Amex if you can; another rule of thumb I use is that if I can't pay the bill in full when it comes, I don't charge it (there are exceptions but it's a general rule). If you can only make the minimum payments, don't use the card unless it's an emergency, or keep it only for emergencies.
Maxing your cards out for Christmas presents when you can only afford to pay the minimums will keep you on the credit cycle, digging you a deeper and deeper hole. You won't have this year's 'Christmas Cheer' paid off by the time next Christmas rolls around and guess what? The cycle begins all over again but you're starting out in a hole the next time.
The credit industry is predatory and you're the prey. Use your credit with that in the forefront of your mind. In nature, the weak and infirm are the ones that don't survive and it's the same way with credit. The subprime mess should give you a clear picture of how the industry works. The card companies (just like the mortgage lenders) don't give a shit if you can afford the credit you're asking for. All they care about is getting you 'on the books'. It's up to you to determine what you can and can't afford. They might be happy to give you a card, or mortgage, but they're gonna crawl up your ass and stay there if you can't pay.
I know a buncha folks whose earnings fall in the six figure range and are hanging on by their fingernails because they're mortgaged, or use credit cards, to the hilt. People who should know better, people who should be aware of the pitfalls. Be careful out there when you navigate the credit jungle. It doesn't take much (sudden illness, loss of a job, divorce) to push you from the black into the red. Until there is some regulation of their business practices, the only one looking out for you will be you.
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