Shazaib Khatri97
What started out with good intentions for the American consumer is now turning into its worse nightmare 소액결제 현금화 . Having the access to credit was supposed to be a luxury and not a necessary. Now, many Americans cannot function without the access to a credit card.
How do we break this cycle of reliance on credit cards?
What is our long term benefit of even having a credit card?
We know short term, we are able to buy that high ticket item now that we cannot afford with our small bank account.
We are able to go on a vacation and live well for a week and worry about the bill later on.
Credit cards are a billion dollar industry. Banks make a staggering amount of money on the interest that they charge and the late fees that they collect. Also, there are numerous small fees and charges that we are hit with every day without our knowledge.
The interest on that credit card was 18% annually. By the time you pay off the flat screen TV fifteen years later, you would have tripled the amount that you paid in 2004.
Interest, my friend, is one of the main sources in which the banks make their money off of you when you use your card.
Your monthly payment to the card company is made up of principal and interest. The principal is the amount that you borrowed, and the interest is the cost of borrowing the money for the purchase. Interest rates on cards can vary from as low as 4. 99% to as high as 30%! The interest rate is dependent on the borrowers credit score. The higher the credit score, the lower the interest rate you would be charged.
So for example, if you have a credit score of 775, a credit card company may charge you 4. 99% and give you a $10, 000 limit. If you have a score of 557, they may charge you an interest of 24% and give you a $3, 000 limit.
The credit card companies do this because they feel the individual with the lower credit score will be a higher risk to default on the credit card account. They will, in turn, give a lower credit limit and charge a higher interest rate. If the individual shows a positive payment history, the they will increase the credit limit and may reduce the interest rate.