Credit cards are a double edged sword, on the good side they help you build your credit, make online purchases, and added protection to items that you purchase. On the flip side, they can wreak havoc on your credit rating, have an incredibly high interest rate, and could possibly push you into a spiral of never ending debt from which you can never climb out of.

If used “properly”, they can be your best friend, but what a lot of people are unaware of is that credit card companies stack the odds against you to such a ridiculous extent that it can be next to impossible to to use it “properly”. Thus any benefits such as a Low APR, or grace periods disappear into the null and void while credit card companies incur huge fees and take you for all your worth.

Why we let card companies act like your recent divorcee is a mystery that remains to be solved, but what we do know is that credit card companies are reaping huge profits and here are the 10 reasons as to why that’s happening:

1. Credit Card Penalty APR

A penalty APR is when the credit card companies jack up your interest rates because you violated one of their terms, i.e. made a late payment.

Some card companies are even getting brazen enough to impose penalty APR’s if you miss a late payment on ANOTHER card, or something as ridiculous as a change in financial condition, i.e. job loss or divorce.

The latest trend is to impose higher interest rates when your cat “Mittens” dies.

2. Shortened Grace Periods

A majority of people still believe that the average grace period is 30 days, not only is that a false assumption, but if there is a balance carried over, the grace period disappears. A disturbing trend are having deadlines at 8:00 a.m. of the expiry date posted.

I mean what is this? a video rental store?

The obvious next step will be to have the grace period end on the 2nd week after the day of the full moon, but only if the month has 31 days, and the 1st week of the full moon if the month has 30 days……

3. Increasing Late Fees

We are at the mercy of card issuers, and they have ordained that we shall have higher late fees. I never approved of the concept of late fees, I mean we’re paying them to give them money!!

4. Bait and Switch Tactics

This applies to when you apply for a card rather than once you have it. If you read the fine print on the applications, the generous card companies reserve the right to give you a lower grade card with higher fees and APR if you don’t qualify for the advertised card. This tactic will fool unsuspecting consumers, so always pay attention to the fine print.

5. Decreased Monthly Payments

Though this might seem like a generous move, this means that credit card companies keep you in debt longer and take you for all your worth.

6. Differring APR’s

APR for cash advances are usually around 4% higher and have no grace period, on top of this higher interest rate, they charge you a “cash advance” fee, this usually applies to balance transfers as well.

7. Inactivity Fee

Having a credit card is not a right, but a privilege! And any privilege should obviously be worth paying for<sarcasm>, so if you decide to lay off your credit card and use good old cash, the card companies will charge you for the “privilege” of holding a piece of plastic in your wallet.

8. Bribing schools

In order to increase the customer base and to start spending habits young, card issuers have successfully bribed our schools for the exclusive right to market their credit cards on campus, not to mention total and complete access to the schools student database containing names, addresses, and phone numbers.

Not only is this an outrageous breach of privacy, but it seems highly unethical to loan money to people with very little or no income.

9. Lobbying to Defeat Pro-Consumer Bankruptcy Legislation

As their campaigns get more aggressive and more consumers fall into bankruptcy, card companies have protected themselves by lobbying for legislation that ensures that their debt must be paid off regardless.

10. Decreased Public Support

While card companies have stepped up their marketing campaigns and increased their budget for luring in more customers, they have actually reduced the amount of funding they give to public non-profit organizations that help consumers manage spending, and credit card debts. How socially responsible!

My suggestion to all readers is read the fine print, try to find cards that fit your needs, and avoid ones with unnecessary fees.

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