Credit card companies have a special word for the customers who pay in full every month. They're called deadbeats.
Nothing helps the credit card companies' bottom line more than the fees and high interest rates they earn from consumers who are struggling with their payments.
- Elizabeth Warren, Bankruptcy and Commercial Law Professor at Harvard University
That's true. Let's face it credit cards companies do not make their money from people paying on time. If you pay your bill every month in full, they are not making any money off you. Good for you !! (yay) bad for them. So CC companies try strategic ways for you to fall under. Such as raising your credit limit!
• Wall Street has turned debt into an asset.
Today, your friendly banker issues you a credit card. He then sells your debt to a Wall Street firm, which collects your monthly payments at high interest rates -- which is why it's an asset to them.
- Robert Kiyoski
Smart! ( well for Wall Street that is )
To me cc debt is the quickest way to get poor.
Debt has become so major that it has turned into investments for some people.
All are in the debt business.
JPMorgan has a Emerging Markets Debt Index Global Diversified (EMBI® GD) they make money by purchasing emerging markets corporate bonds and sovereign debt securities.
For a minute, I thought about investing in tax liens but morally I felt guilty to make money off of someone else flaws. It seems as if I would have been counting on people to lose their job or fall behind on their payments.
CC collection companies make their money solely by people that are in debt. CC companies sell their debt to these companies and they look at other people's debt as an asset to them.
I end this in saying they are always companies that prey on you to have debt. Try not to make yourself their slave. Instead invest in yourself.
11 cool comments:
How can cc's the quickest way to get poor?
Not Credit Cards, credit cards alone does not get you poor, but cc debt.
It's been said that if you have cc debt, you are already living above your means.
Having that debt is having a payment every month. You can be doing other things with that money such as 401k contributions, investing, or more e-fund money.
The debt from cc's robs you of your future money!
Paying a cc in full each month, is good. No money wasted on finance and interest charges.
It's the debt that you carry for from one month to another it compounds the interest which make your payments higher than it should be.
a good article on Credit card and interest rates.
http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/CreditCardCompaniesEvilTricks.aspx
mm, I understand what you are saying.
Not having payment each month , the more you can keep in your pocket or the bank for yourself.
Having the debt the less money you can keep.
bottom line Marc: Stay away from credit card debt!
The cartoon says it all.
All you're doing is making the cc companies rich.
I never thought the day would come in which debt can become an investment.
www.investindebt.com
Buy bank stocks.
Check my weblog posting:
Deposit at the bank or own the bank
Moneymonk,
Even for people that pay off their cc bill monthly, cc's make money. They charge the merchant 2-3% for the use of the card. That's why I always ask a merchant if I can get a "cash" discount for a large purchase. Most will usually give a 2% discount.
Tax lien investing has been on the books for ages. Without it, you wouldn't have services like 911, police, etc. Let's face it, people often forget about their tax bills and the major reason why people have liens are misplacement of bills. If there's no incentive to correct this, counties will be running in the red.
Investors have a huge role to play. It isn't necessarily because of someone's misfortunes when the majority of the late bills are due to misplacement and common error (errors that cost the county millions).
Source: Investing Without Losing
SS, I forgot about that merchant fee.
Anonoy - it's true about common errors. But I was just trying to illustrate how people can make money off of debt.
CC debt is a loan, if you use your cc card face it, you are borrowing money.
Many people look at cc's as extra money instead of a loan.
it doesn’t look like credit card debt is an issue to the panel of 4 people (from PBS Frontline where Elizabeth Warren interviewed). they all stated that they have money in the bank to pay off the balance. they don’t pay it off because of the low minimum payment and worry about the unexpected. so the credit card balance situation is more psychological (and perhaps lack of emergency fund).
of course, credit card is risky business. there is no collateral for the issuer, except for a fico number. they’re entitled to charge high interest rate.
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