How Credit Card Companies Profit
By Hillary Smith • Mar 20th, 2008 • Customer Rating
(3 votes, average: 4.67 out of 5)
Loading ...Another very common question that we get here is on the topic of how credit card companies turn a profit. Not just a profit but a whopper one at that! Today we decided to mix it up a little and show you a documentary by PBS on the topic.
While not exactly aimed at the UK, all the points in this eye opener are still valid. Have a watch and learn.
The documentary description is quoted as this:
The average American family today carries 10 credit cards. Credit card debt and personal bankruptcies are now at an all time high. With no legal limit on the amount of interest or fees that can be charged, credit cards have become the most profitable sector of the American banking industry: more than $30 billion in profits last year alone.
So technically, credit card issuers are legalized loan sharks. With the latest credit crunch in the UK it has never been easier or stupider to get a credit card. In general, what happens in the US usually happens in the UK months or years later. I would watch this documentary and really take home and understand the lessons. Now there has never been a better time to get your hands on a prepaid credit card where the banks do not make their extortionate profits.
With so much debt and lives being destroyed by debt, this is certainly something to think about.
Hillary Smith is a director of consumer affairs at the credit watchdog and editor for EndorsedCards. Hillary has dealt with literally hundreds of credit related court cases spends her time either writing for the consumer watchdog.
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Great video Hillary and really eye opening. It’s such a shame there is so much hardship and grief from credit card companies taking advantage of people in such deep holes. This video should be watched by everyone.