Would you boycott credit cards and pay day loan companies?
Banks, credit unions, and other creditors entice people to use their contracts and then charge exorbitant fees trapping many unwary people and increasing their interests rates. Companies change their terms without notice. People, in some cases, end up paying the equivalent of 600% interest rate per annum.
Would you join me in a boycotting credit card purchases?
Should we blame the exploited or the banks and regulators allowing exploitation?
If enough of us stopped playing the credit card game, do you suppose some would be better off?
i use cash and debit
Silly idea.
Boycott is such a tedious exercise in futility. Okay, use a credit union.
The money wise have always known that banks are not your friend and have formed parasitic relationships with them from which they take the primary benefit.
For example. credit cards. No fee, rewards cards are basically a money generating machine for people who have their act together: charge up everything you can during the month racking up points or cash, and then pay off the balance at the end of the month. Cost to the consumer: $0. 00. Benefit: from 1% to 7% per year. The banks hate it. I really don’t care — they can jack my interest rate to 285%. . . it doesn’t affect me in any way shape or form.
Second example, free banking. Put enough money in the bank to hit all of their minimums for premium benefits and you can easily offset the lower interest rates with all the “free services” they offer.
I will agree, however, that they must be required to put everything in clear, large print, summaries that everyone can understand. If they cannot, they cannot offer the product or service to the general public.
Payday lenders and title loan companies are a harder sell. On the one hand, their rates are ridiculous and the contracts are far too complex for their average customer to understand. On the other hand, their average customer has a default rate more than 10 times higher than the typical credit card customer and more than 100 times greater than customers like me. More than half of them would default within 3 years even if the interest rate was a more “sane” 10% to 25%.
Look at all the fools who took out mortgages they could never afford on ridiculously priced homes — Yes, the banks and the fed have some responsibility, but it isn’t hard to see that the same damn people who always make poor money choices are the most common “victims” and that the money wise are, as always, having far fewer problems.
I use credit, but like MVD34 I use it to my benefit. I pay my bill in full every month, and I have a no annual fee credit card with cash back rewards. So I put my utility bills, gas and groceries on the credit card and depending on the month and what the cash back reward is for that month, I can make 1-5% on things I’d buy anyway. It takes more discipline, because you have to have a budget and spend within that budget, especially on the gas and groceries, but who cares what the interest rate is, I don’t pay it, they pay me. Be a smart credit card user, and you’ll be able to typify that saying, “those that don’t understand interest pay it, those that do earn it. ”
I already don’t patronize payday loans, title loans etc, because I refuse to pay interest on something that if I have the patience and forethought I wouldn’t have to pay it on in the first place.
There are some things that are more reasonable to get a loan for, like Houses and education, within reason. Most things however, with a great deal of self discipline and planning ahead, loans aren’t really necessary.
With loans for homes if you plan to be in the home for 5+ years a fixed rate mortgage is the way to go.
And with Education loans, get the ones where the gov’t pays the interest while you are in school, and save what little you can while in school to immediately pay down the loan once graduated.