Re: Does a high limit effect credit negatively?

Posted by yeah, right (216.133.236.195) on March 09, 2004 at 21:11:38:

In Reply to: Re: Does a high limit effect credit negatively? posted by SunkissedBeach on March 09, 2004 at 19:02:19:

SunkissedBeach makes an interesting point. I completely agree with her recommendation to pay your credit card balance in full each month.

The problem of course is that the banks already market such a card. It is called a “debit” card. The banks PURPOSEFULLY give people ENORMOUS lines of credit in the hopes of hooking people on credit. Banks don’t make any money if you pay your account in full each month. Hence the “teaser” 0% interest for 6 months deals. They want you to acclimate yourself to carrying a balance for months. They will do anything to get you into debt, so that they can make huge profits on the interest.

The problem arises when there is a loss of income that causes the accounts to go into default. That’s when the banks REALLY show their TRUE PREDATORY nature by jacking up the interest rates to usurious levels and adding late penalties, until they finally get the triple whammy,--Default interest, Late Fees, and Overlimit fees on top if it all!

So sure, follow SKB’s advice. She’s right on. Use the credit card like a debit card. Only her bosses wouldn’t like her saying such things. They don’t make any money on people who use cards like that. That’s like the new ads with Philip Morris telling people not to smoke. Why sell cigarettes, then tell people smoking isn’t good for you?

I further agree, there is no reason on earth for anyone to have a $12,500 line of credit with a credit card. If you ever need to purchase anything that expensive and you don’t have the money, get a fixed payment, fixed interest personal loan from a local bank or credit union. So why do the credit card marketers toss around those enormous credit lines?? Makes you wonder, doesn’t it?

One final analogy. There’s a nasty little secret Anheuser-Busch doesn’t want us to know about. Liquor companies make 50% of their profits from 10% of their customers. They make the other 50% of their profits from the other 90% of the population. The same ratios are in effect for the credit card industry. They’ll get 10% of their customers “addicted” to credit and thoroughly ream them for half their profits. All the while calling these people “irresponsible.” If it weren’t for alcoholics, Budweiser’s profits would be cut in half, and if it weren’t for the “irresponsible” credit users in the “triple whammy,” the banks wouldn’t be making the enormous profits they do make. They are very thankful for all their “irresponsible” customers who make credit card banking as profitable as it is.

Which leads us to the ultimate absurdities of Tobacco Companies telling people not to smoke, Budweiser telling us to Drink Responsibly, and Credit Card Marketers giving us 5 figure credit lines with 0% interest while telling us to pay the balance in full every month.

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