Arvin Ash

Credit card secrets you're not supposed to know? Which credit card is best? (2019x12)

Udgivelsesdato: Mar 18, 2019

The credit card industry is a hugely profitable business for banks, that’s why you see so many bank commercials trying to get you to use their cards. What do credit card companies not want you to know? Which credit card is best? And which credit card should you get -- to avoid getting ripped off? Credit cards are a huge profit center for banks and financial institutions. Why? Just think about it, the average interest that a bank charges on a credit card is 17.65% - this is legalized loan sharking, because a bank cannot charge this kind of interest rate anywhere else. Not on mortgages or business loans. The interest you pay on your mortgage for example is a much more reasonable 5%. Business loans are 8% or so. Credit cards more than double that. In addition, the average US household carries a balance of $7000 on their credit card. Multiply these numbers together: $7000 x 17.65% = $1235 -- This means that banks can expect $1235 per year of free income for every single person they can get to sign up for their credit card. That’s significant. That’s like getting a $100/month cable subscription fee for just giving you a piece of plastic. But that’s not the only profit center for banks, they also rake the merchants over the coals - by taking a cut of about 2 to 4% on every single purchase you make. This is called merchant transaction fees. Merchants pay this to the credit card companies for the “privilege” of accepting credit cards from consumers. They have no choice because you would rather use your credit cards than give them cash or checks. To make things even more unfair for you, the credit card loans and fees are set up so that once you accrue interest, it is not easy to pay it all off in one big lump sum, because you find out at the end of the month that interest is accumulating on top of interest. This is compound interest in reverse. Like I said, this is legalized loan sharking. So I implore you to never ever keep a monthly bal