Whose Afraid of the Big Bad Credit Card Companies?

09Aug10

Despite a new law regulating the most rapacious and avaricious going into affect this month,  those “financial services” aka the credit card companies, They’ll also be charging more and,  rest assure, they’ll put their collective greedy little minds at work to devise ways of circumventing the new laws and stealing more money out of our collective pockets. So the answer to the question is, we all should be afraid of the big, bad credit card companies.

Congress passed and President Obama signed The Credit Card Act a while ago. It takes affect this month. It forces the credit card companies to increase notice of changes and puts more useful information on the bill and some other consumer friendly regulations. Perhaps the most interesting new bit of info is  chart which details how long it will take to pay down the bill. Included in that chart is a final cost. Yeah, you may have rung $5000 on charges, but by the time you pay it off the total amount paid could exceed $7000 or even more. So that deal you got and paid for by credit card? It isn’t a deal if it costs a heck of  lot more with the interest.

Now most of this is good for the consumer, and you have to wonder in a world of ‘free markets’ why didn’t the credit card companies get competitive and institute these consumer friendly options without having Congress pass a law? Hmm, probably because the free market incentives don’t work with these “financial services”.

Before any of us start feeling good about these changes, the Big Bad Credit Companies are already set to keep their profit margins very healthy by jacking rates and fees. The ‘industry’, a euphemism for this group of loan sharks, is expected to start initiating new or augmented yearly fees to offset some of the expected drop in revenues.

The Frugal Yankee strongly suggests anyone with credit cards to be extremely leery of any offers made by the companies in the coming months. Read the fine print and remember these companies have only one motive, to take as much money from you for as long as they can. They aren’t offering something because you’re ‘worth it’. They are truly after what’s “in your wallet.”

The new law does address some of the biggest issues with the big, bad credit card companies, but they have billions in resources. They have incredibly savvy marketing departments. But most importantly, they  have an overwhelming greed. This makes them dangerous. This is why we should be afraid of them. Be forewarned.

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The Frugal Yankee is opinionated & down right thrifty. He can be found on NE Cable News as well as FrugalYankee.com, where ideas on spending less are fun & informative.

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