We are paying such high interest rates because we are supplementing those that fail to pay back their credit which obviously cuts into the CC company profits. Of course also the CC companies want more money as well so those that are good credit risks get to pay for the failures of others.
The current extremely high interest rate on cards is nothing more than legal usury. What is a fair interest rate? It sure as hell isn’t 20% - 30% which is what so many cards are today. I feel it should be permanently capped at 10% until the CC companies can demonstrate they are responsibly handing out credit so the losses from their bad decisions are not spread to the responsible CC holder and the CC companies demonstrate beyond a shadow of a doubt that 10% is not sufficient to stay in business.
Many will say that capping it at 10% will prevent young people from obtaining a credit card therefore hurting their credit rating further. That’s complete crap! There are plenty of other ways to build up their credit rating. I started with a couple of Big Box cards when they still ran their own credit departments, and a car loan. It didn’t take long to obtain a low limit major credit card. Not long after that the limit was extended at my request.
What so many people want today is an immediate CC acceptance at some totally unnecessarily high credit limit. Then they go out, run it up on all kinds of things they do not NEED. Then they fall behind trashing their credit ratings and hurting their ability to get even a necessary loan like a car loan. Anyone who has never had credit before, and those that have and trashed their ratings through irresponsible spending, need to learn their lesson by starting slowly and working up. They need to learn the responsible use of the CC. All along they are building their careers, advancing, making more money, and then if they want to waste the excess money they know they will not NEED they can do so then.
As for the credit rating systems they are a complete joke and should be highly regulated! A persons credit score can swing wildly without any apparent reason even though it is supposed to be based on your financial information only. Many CC companies now offer you free access to your credit score(s) with the three major reporting agencies. Watch it a couple times each month to see the changes even if nothing changes i.e. same monthly payments and on time, same salary, same, same, same. The only thing that changes is you get another month older. Until the Gooberment jumps in on this one it will forever be a problem.
Also look closely at the credit applications you sign whether it is a CC or other. That creditor will be reporting your credit worthiness as they see it to the credit bureaus on a regular basis. What is important on those applications is the wording that is very well written to literally give them access to so much information that maybe they should not have and maybe should not even be allowed to be collected on you. This is a sample application wording and you will find this or other effective wording.
This application is submitted to obtain credit. You are authorized to check my/our employment history and to ask questions about my/our credit experiences. Without limiting the foregoing, I/we authorize
you to make inquiries (including requesting reports from consumer credit reporting agencies and other sources) to verify my/our identity and determine my/our eligibility for credit, and subsequently in
connection with any extension of credit, update, renewal, review or collection of my/our account or for any other legal purpose. I understand that, on my/our request, you will tell me/us whether or not you
requested a credit report and the names and addresses of any credit bureaus that provided you such reports. I/We also authorize you to release information to others about my/our credit history with you.
I/We understand that you may report information about my/our account to credit bureaus. Late payments, missed payments, or other defaults on my/our account may be reflected in my/our credit report
Are you familiar with what a “Consumer Report” is?? That is vastly different than a “credit report” and contains every piece of public information and information the collector can obtain or is reported to them including among so many others your credit history. Lexis Nexis is the largest perverter Uh I mean purveyor of these reports. They are required by law to provide those to you upon request once a year. If you have never pulled one you should. You may well be amazed what is in there. They do offer various levels of the report so read the request process closely to ensure you are getting everything they have on you.
What is important about the credit, and any application that requests this type of information, is that wording in bold “and other sources”. What do you think the other sources are? That would potentially be that consumer report if they so choose to because you just gave them the authority to pull it. Look at the other bold where they state they will advise you if they pull a “credit report” from a “credit bureau” as they must by law. However Lexis Nexis is not a credit bureau and does not fall under the Fair Credit Reporting Act unless that report contains your credit history. That portion of a report can be left out when another pulls your “consumer report”.
The entire credit system has been convoluted to the point where someone who might have had a past credit issue way in the past may well fail to obtain credit even though they have paid their bills on time for the following 20 years. The CC companies want it that way so they can continually escalate their use of legal usury.
