Wednesday, November 16, 2011

Credit Card Companies Are Not Your Friends

While surfing the internet last week, I ran across a pretty creepy article.

In case you were still under the delusion that your credit card company, or any of its representatives, actually cares about *you*....

Click here to read the New York Times article.

It is chilling, really, to read about how the credit card companies have invested tons of money to train people to *act* as if they care about you, and to use psychological profile information against you, so that they can suck as much money as possible out of you while you feel "grateful" for their "kindness."

Example: Even when the collection agent knows the company would settle for $10,000, he uses psychological manipulation to sucker the poor schlub into paying $12,000.

Example: The "kind" woman at Bank of America (I'll call her "Vampiress" here) so thoroughly convinces the poor woman whose husband just deserted her, leaving her to try to raise two kids and pay the huge credit card debts alone and on a virtually non-existent income, that Vampiress is "just like her" and understands her situation and actually cares about her, that the woman becomes devoted to paying B of A and pays the entire $28,000 balance (half of which was probably interest and fees, rather than actual borrowed money). Vampiress, meanwhile, never informs the poor woman that B of A would readily have cut her debt in half and reduced the (probably near 30%) interest rate if only she would ask. And of course the woman never asked, because she didn't want to "hurt" Vampiress's feelings.

And -- they are using information about *what you buy with the card they have issued you* to determine whether you are a "good" or "bad" credit risk -- and to raise your rates accordingly if you buy things they think indicate you are a bad risk. For example, if you buy beer at particular bars, your credit rate likely will increase. On the other hand, use your card to buy home repair items, and they figure you are a good risk and leave your rates alone. I guess technically it's not an "invasion of privacy" since you're using their card to buy the stuff and so they are only looking at their own records, but... wow. Seems like they ought, at least, to be required to inform you about what things you buy might make your interest rate go up!!

After reading the article, all I can say is:

Holy crap, people! Credit card companies are NOT your friends! Nor are any of their employees or representatives!

The companies are evil blood-sucking leeches, whose only goal is to suck every penny out of you that you will pay. The people they hire to pretend to befriend you are doubtless down on their luck, too -- or else they are also evil. I can't imagine any other reason why anyone would sit through the training described in the article and not run screaming from the building instead of consenting to work for such guileless monsters.

Your best option? Use the cards as much as you like, but pay the balance every month, faithfully. Never roll over a balance to the next month.

What if you owe money on several cards and can't pay the balances in full? Call all the companies and ask them to reduce your interest rates. Some will, some won't, but it never hurts to ask. Then, focus on repaying the cards as quickly as possible. Credit card interest is the worst kind. It's generally not tax-deductible, and often the rate increases based on one late payment -- or even based on one late payment to a different credit card company!!

What if you owe lots of money on lots of cards and have no hope of ever fully re-paying the balance (or at least not within some reasonable amount of time, such as 5 years)? What if you are starting to feel that at least half the money you owe them is amounts they have tacked on in interest charges and late fees for those times when you paid a day or two late -- or paid a different bill late? For that situation, I have the following public service announcement:

Remember, credit card debt -- unlike child support, alimony, and student loans -- is unsecured debt that is dischargeable in bankruptcy.

So, if you are having even some minor difficulty paying your credit card bills, consult a bankruptcy attorney. Get a realistic assessment of your options. If it looks like your financial troubles are unlikely to improve in the very near future, or if it appears that, even when you get a job and/or start making more money, you still may have trouble with those ridiculously high credit card interest rates, you probably want to file bankruptcy. Don't be afraid. Just do it.

Do it now, *before* you are behind on your mortgage and car payments and haven't bought clothes for 3 years and have drained your retirement account, all to try to keep up with those ever-increasing card payments with their ridiculous fees and exorbitant interest.

Do it now, *before* you default on the cards for a year and get sued and potentially allow the credit card companies to reduce the debt to a judgment, which can then be secured by a lien on your home.

Do it now, *before* you send thousands of dollars to the evil credit card companies that you could have been putting into your retirement account or your kids' college funds.

Just do it.

Remember: The Credit Card Companies Are Not Your Friends.

In most cases, when you file bankruptcy you can keep your house and car and all or nearly all of the money in your retirement accounts, as well as most or all of your stuff, and you will get rid of that ridiculous credit card debt so you can go back to buying clothes for your kids and making your mortgage payment without raiding your retirement accounts.

Look into it now. Before the credit card companies successfully lobby Congress to make it harder for you to get those leeches off your neck.

* * * * * *

The foregoing should not be construed as legal advice, nor as advertising for any particular attorney or for attorneys in general. It is, instead, practical advice based on my own particular observations about the evil-ness of credit card companies.

Screw them, before they screw you.

And then learn to live within your means and quit using those credit cards!! After all, you really shouldn't have run them up in the first place....


Green said...

Such good info. Nobody you owe money to is ever your friend.

Quilter422 said...

nodding. good summary of it all.

LOLA said...

Thank you for the excellent post. I've noticed that when I call my auto insurance company that they have become strangely sympathetic. Weird fake sympathy is all the rage these day.


Tom said...

Let me get this straight- You are saying that credit card companies are not your friend? Agreed. I learned the hard way, but have nobody to blame but myself. I agree that most of them are ruthless. Just look at the interest rates they charge.

Silliyak said...

I couldn't find the "Like" icon.....oh...never mind

So. Cal. Gal said...

I never buy more with my credit card than I can pay for at the end of the month. It's just financial suicide not to do so.

Scope said...

There's a reason Capital One started using rampaging vikings as their mascots?

Cards paid in full. Every month.

Mrs. Tuna said...

I'm glad they we have been able to not run up credit card debt. Especially now that I've been frackin laid off. Excellent advice.