Credit Charge Card Greed

The credit market business is big and it has been very heavily marketed. It must be a big money maker, judging by the cards that are continually advertised and junk mailed. There are applications for general credit cards from financial institutions, supermarkets, department stores and associations. Then there are the stores' own charge cards where you are encouraged to apply for one, or if you already have one, to use it. Buy more on your card and earn more loyalty points is one enticement.

There are too many businesses putting too much effort into marketing credit. The credit rates charged appear excessively high at a time (January 2008) when investment interest returns are historically low. A typical Canadian bank savings account holding $0-$5000 pays 0.10%-0.50% interest while a department store may charge 28.80% on the unpaid balance. There could be the argument that their costs are too high but that's because they market them too heavily and there are too many defaults. So many of these defaults are by people who could not wisely afford the purchases but were persuaded to do so on credit.

And these corporations mean business: "If there is an error in your account you must notify us in writing within one month or we will consider the account statement as correct." Squeezing every drop out of their efforts the charge card agreement states: "We may use this information to promote products and services of third parties to you." This might be buried in small faded print on a very long customer agreement page.

The 2007 mortgage meltdown has been a disaster for so many who may have been persuaded into a financially unwise investment. Slick sales persons and greedy companies sold mortgages they knew were risky with advertising always there as the slick persuasion tool. "Can you read this? You qualify!" ~ "Loans guaranteed: refused by bank, bad credit, bankrupt."

There can be more serious negative economic results in consumer markets caused by general and retail credit, brought on by corporate greed and on the backs of lower income families. Perhaps it already is part of the crunch. Consumers need fairness and protection in this business and it can only come from governments. They could investigate the credit market mess and fix it. But they probably already know that.

"Liars when they speak the truth are not believed." - Aristotle

Grampa Ken ~ Author of 32 KEYS About Life and Blogger of Social-Fix