Greed And Credit

The intensely marketed credit business is a big mean money making machine.
Credit card companies are lined up for those account interest charges and have conscripted retailers to join the pack. With so many businesses involved and competing for the same loan interest profits, costs have escalated and in some areas ethics have nose dived.

Borrowing is a necessary part of living for many today where it provides assistance in buying basic necessities. Purchasing a first home or transportation for example. But taking on credit can be a drag on one's financial and personal well being, and it can be much worse when goaded into debt overload.

Credit marketers and other industries spend vast amounts of money emphasizing consumers 'need' to require more, much more than they truly need. And they make it sound easy - just charge it and own it now.

Sellers of credit work frantically to maximize profits while not necessarily providing fair value to consumers. As has been reported in the news, businesses along with their loan marketers have used some ruthless strategies in obtaining handsome profits. Slick tactics to encourage borrowing even when it is potentially hurtful is a cruel business.

These tactics have resulted in financial hardships and disasters for so many who may have been encouraged into unnecessary bad credit usage. The classic example has been the slick sales efforts of greedy companies who sold mortgages they knew were risky. But similar efforts are popular in many areas of lending and can be crippling to individuals and families who have been talked into excessive credit usage.

MORTGAGES - Can you read this? You qualify!

Refused by bank, bad credit, bankrupt? Loans guaranteed.
Price gouging is not new to enterprise, in fact it can be seen regularly throughout the shopping experience. It is free enterprise where you can charge whatever someone is willing to pay. One of those gouging experts must have created the expression; "Greed is good" - though it be noxious, corrupting and hurtful. Sadly though, greed is profitable and can create wealth.

Much of the credit rates charged to borrowers have been excessively high for years, even while investment interest returns are historically low. With bank savings and term accounts paying 0.2% - 2.2% borrowing rates can be extremely higher. Retail credit card interests take off and can run as high as 29.9% on unpaid balances.

WOW! No wonder the massive marketing campaigns. Stores and others, as well as major credit card providers are circling around shoppers like a pack of wolves.

And so the continuing promotions; gross amounts of junk mail from major credit card companies, financial institutions, supermarkets, department stores and miscellaneous associations who can all issue their version of a major charge card for a fraction of the profit.

"Use your customer charge card and earn extra loyalty points." is one 'encouragement'.  But it gets worse.

Think you can entirely avoid owning and using your department store's credit charge card? It may not be that easy in the future as shrewd sellers are finding new ways to 'persuade' consumers to use their card to buy their products. I see a trend developing where increasingly the bargain price of a store item is tied to the store's charge card. No charge - no discount.

A recent trip to a department store sale had displays with products discounted in the area of 20%-30%. On some displays there were larger signs:

Use your customer charge card and earn extra loyalty points

So what are you going to do? Pay double?

You may never miss a payment but the poor soul who is struggling from payday to payday will sink deeper into debt and suffer the consequences of giving in to the persuasions.

Sure corporate mouth pieces may defend these exorbitant charges in saying their costs are high but that is largely because of the massive advertising expenditures. And then there are defaults where the trapped debtor could not pay and has declared bankruptcy.

Loan contract trickery may include confused, bloated wording and fine print; and a bag of costly surprises for the buyer after the transaction is made. This is a winning strategy for ruthless companies and now widely popular.

More negative consumer credit experiences may be coming in the news, brought on by always creative forms of corporate greed. It will be on the backs of low income families.

Consumers need fairness and protection in dealing with this type of business and it can only begin with governments that stand up for their citizens. They can investigate commercial behavior more closely, encouraging consumer input, and applying fixes that will require fair and ethical treatment of their citizens.

If they should ever care to.

Updated and expanded from an earlier issue.  -  Related Social Fix Articles 
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