We let credit card companies take advantage of us and don't do anything about it. If someone told you they were taking advantage of you, wouldn't you do something about it? I certainly would.
Credit card companies make $76.03 billion a year, and most of that money comes from fees for being late, going over your limit, and getting a cash advance. Late fees brought in $29.2 billion, fees for going over the credit limit brought in $15.2 billion, and cash advance fees brought in $3.04 billion. This amount is 62 percent of what credit card companies make, and it doesn't include finance charges. Nice profit!
This is why credit card companies can afford to send out more than 5 billion offers each year. This means that each home will get 6 offers each month. Maybe our government doesn't take the credit card industry seriously because of the $2 billion in postage alone.
Every bank and store wants you to get a credit card from them. With their credit card, they can make a lot of money. In 2001, both Sears and Circuit City said that more than half of their profits came from sales related to finances. Do you think this is why stores always have someone at the front door trying to get you to sign up for their credit card in exchange for a special gift or "so-called" extra discount? Due to finance charges, most special gifts and extra discounts end up costing you more than the original purchase.
I may not be able to confront these institutions that are trying to make a fool of me, but I can fight back by believing that "Cash is King" and using cash instead of credit will save me money in the end.
Personal money management should be at the top of your list of things to do in 2006.
