The Credit Card Traps Revealed

Credit cards are an alluring trap invented by our modern financial system.

Buying something using a credit card is not bad, if you have the income to pay the credit card balance in full when the statement arrives.

However, buying with a credit card when you don't have enough money, is simply committing your future earnings to the credit company under the threat of a bad credit rating. That is economic slavery.

Over the past few years, financial experts have helped a lot of people to get out of the credit card trap with debt relief programs. That alone speaks volumes about how serious the situation is. Assisting people to do this is not looked on favorably by the credit lenders; they lose all that profitable interest. They create more enticing offers to hook more people back in with offers like 0% interest for extended periods of time.

Are they really giving you 0% interest? You are IF you can pay off the whole amount in advance of the expiration date of the offer. What they are hoping is that you will NOT have the ability to pay it off.

What happens if you can't pay? Be sure to read the fine print carefully on their 'Terms and Conditions' service agreement. Many agreements have an attractive interest rate in big print; 9.99% to 12.99% is fairly standard. But, many rates are variable, which really means it is the 'attractive' rate PLUS the 'prime rate.' The banks charge the prime rate to the credit company to lend them the money, and that gets passed on to you. This can add a staggering 6 - 9% on top of that attractive interest rate.

Read further and you'll see the rest of the trap. If you pay late or miss a payment, they have the right to increase the interest rate to well over 30%. PLUS, they get to add an additional $25 - 39 late fee. If you owe a balance of $1,000, that equals $52 - 66 in monthly interest and fees you are required to pay before you ever get to pay the first dollar of the price of the item you charged.

What else do the credit companies have in their arsenal of weapons to ensure they continue to make interest money from you?

That enticing 'minimum payment' they offer which is mostly interest, and keeps you paying for whatever you bought for about 20 years. Second, they are now using invitations to get cash back from stores or earn airline miles for each dollar you charge to the card.

Who pays for that? You do! The credit companies charge the stores for the cash they give you back, and the stores raise the price you pay.

The credit companys pay the airlines a tiny amount for each airline mile they 'give' you when you charge an item on the credit card. On January 1, 2007 in an NBC TV news interview, the president of a major airline said that it costs the airline industry $10 to fly you somewhere after you have charged enough to earn 25,000 air miles to take a flight.

Who do you think really benefits if you spend enough on your credit card to earn a 'free' flight? It should be obvious that trap is disguised as a huge benefit to you.