Monday, April 21, 2014

Karl Denninger, “Why Are You Charging On Cards Again?”

“Why Are You Charging On Cards Again?”
 by Karl Denninger

Really? Credit card companies know there’s no free lunch, but they’re letting more customers get a taste as an enticement by gouging their existing card members. The average credit card interest rate for people with fair credit has hit a shocking 21 percent, up more than 2 percent from only a year ago, according to industry group CardHub. Credit card companies, which attract new customers with zero percent teaser rates and more rewards, have raised rates while their costs remain historically low, industry observers say.

Right, so you balance transfer to a "zero rate" offer, but you can't pay it off.  After the "zero" comes the hammer. Then you miss a payment and now it's a penalty rate and oh, you can't balance transfer again because now your credit sucks.

Look folks, there is something like $850 billion out on these cards. What's 21% of that- each and every year? That's how much you flush down the toilet so you can have the latest and greatest "pair of shooz." Or a night on the town. Or a sexy pair of panties. Or whatever.

This is stupid. Bone-crushing, outrageously stupid. You are destroying yourself while the banksters are laughing their asses off all the way to their tony boardrooms. They pay nothing for these funds- they don't take deposits for them, they don't pay interest on the money, they literally create it out of thin air and then screw you on top of it.

Worse, the generation of that "credit" with no backing means that prices go up commensurately. This in turn means you pay more and more for the same crap and then you pay 21% interest on top of paying more! Folks, it's simple: If you don't have the cash you can't afford it. Period.”

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