by Mike Aux-Tinee.
Don’t look now, but the next time you whip out that credit card for your next must-have splurge purchase, it may cost you an additional 1.5 to 4.0% of the purchase price. There’s nothing like a sucker punch coming right at you when you were least expecting it.
When I was watching the video, the thing that struck me as just odd was that the reporter kept saying ‘what I like about this…’ I got the feeling that she was not a reporter but a paid spokesperson for the credit card companies. I guess her bias is coming out front and center.
I wonder, when will we, the consumer, stand up for ourselves? Of course, why would we want to do that? Because we are being taken to the cleaners and here’s how.
1. Interest rates: Let’s face it, most of us are not paying off our credit card bill(s) every month. When this happens, more of your money is going to the credit card company’s bottom line and not your own bank account (They win and you lose!)
See, once expenses are taken out, what is left is their ‘profits’ and from the amount of money the credit card companies are making, business and profits are good! Since Visa and MasterCard are publicly traded companies, you can check for yourself just how much they are making. But prepare yourself… it’s A-L-O-T!
2. Other fees: This latest fee, the charge by retailers, is another sign of the companies making more money at your expense. In addition to this new fee, there are late fees, over limit fees, fees to avoid going over your limit and so on. I understand, these fees are ‘products’ that the company offers its customers. But it sounds more like taking candy from a baby…
I know. You are going to try to defend these fees because you think you cannot survive without your credit cards. But let me tell you a story.
A very long time ago, back before credit cards were as common as they are now, there were just two ways to pay for things: with cash or by check. Now, you had to keep track of how much money you had in the bank and could not spend any more than that. It was the perfect utopia for us consumers.
When credit cards came out, very few people could even get a credit card, let alone use it without two forms of identification! Again, we customers were in a state of nirvana!
But the problem was, those who wanted to make more money, called up our Federal Government and asked them to change the laws. At first, any loss or fraudulent use would come out of the business profits. The laws were changed and now it’s the customer’s problem. What happened you may wonder?? The number of credit cards in circulation just shot up (and so did the amount of our debt.) Everyone under the sun could and did get a credit card and that propelled us down the path we currently are on now. Where we are the losers and the retailers, credit card companies and banks are the winners. I know, leaves a bad taste in your mouth…
But there is a way out. It’s going to take a little adjustment on your part, but the end result will put more money in your bank account.
1. Once and for all pay off what you owe and never look back.
You may think this is easier said than done. If you are like millions of Americans, you could have several thousand to over ten thousand dollars of combined debt. The thing is, you might not be able to pay it off in the short-term, but you can in the mid to long-term.
I was in your position, being hit with fee after fee and I decided to get off the hamster wheel. I paid off what I owed, transitioned to using cash and changed my life dramatically! If you need help, I wrote a book about what I did titled, Islands of Happiness.
2, With a little planning, use cash or pay by check.
Once all of my debt was paid off, using cash required just a little planning. I created a budget and stuck to it. You may have to ask if you can pay by check and might get some weird looks, but it can be done.
There are going to be those who attempt to label you… Maybe they will say you are overreacting, or are thrifty (which is a compliment to me) or say – how about you move into the 21st century like the rest of us. Whatever is said, ignore them one hundred percent. This is about protecting yourself and your money. Doing these things are just as cool as they were then.
Why do I want you to do this? Well, when you run the numbers the amount of money you are losing to fees and interest is a staggering amount. Don’t believe me, then just add up those numbers and let it sit on the paper and stare back at you. It’s hard to sit there and think what you could be doing with the money (maybe a vacation, take a class or just save the money!)
I want you to take back control of your life and the first step in the process is realizing there is more to life than the story you’ve been given.
If you do pay off your debt and follow my advice, I’d love to hear from you!