Credit Card “fees” are laughable…
I generally don’t do this type of thing, but in this case, I can’t resist. The company (store) will remain anonymous. As most probably do, or attempt to do, we try to pay down our credit card balance each month and not carry over existing balances. In this particular instance, what we didn’t count on was additional finance charges so we ended up owing an additional $9 in additional fees. To that, they added an additional $2, with nothing noted other than “Fees charged”. So, $11 total additional charges.
Here’s the “funny” part…our total balance owed is $11. Our minimum payment is only $5. Seriously? A $5 minimum balance on an $11 total account balance? I scan down the page…there are additional notes. “If you make no additional charges using this card and each month you pay only the minimum payment, you will pay off the balance shown on this statement in about 4 months, and you will end up paying an estimated total of $17.”
Are they serious here? I really wonder how many people would do that. Take four months to pay off $11, while eating up another $6 in fees over that time? You do the math on how much additional money this store would make and the interest rate charges they get away with. Why they are able to get away with stuff like this is confusing (down economy or not). It’s way more than highway robbery and the fact they think this is “reasonable” deserves no additional comments.
Just for giggles, I looked up the history of loan sharks. Here’s what I found:
Today loansharking tends to be associated in the popular mind with organized crime. The stereotypical loan shark is often thought to be a gangster who extorts repayment of the debt with threats of physical brutality. Such loan sharks do exist, but the first loan sharks were not linked to crime families and they did not beat up delinquent debtors. The phrase was originally applied to salary and chattel mortgage lenders who operated at the turn of the twentieth century. These creditors dealt in small sums (most loans were less than $100) and they charged high rates of interest (between 10% and 20% a month, and sometimes more).
My how far we’ve come…how many credit card companies, particularly department stores, charge higher than 10%-20%, and why are they not considered “loansharks”. I’ll remember this the next time I walk in to a store and they offer me a “free credit card application”.
Rant over…