I wrote last time about how credit cards suck.
While that may be true at times, it may be more the truth that you suck!
Sounds harsh I know. But a lot of people who have credit card problems need to take a deep breath and look at themselves.
Let’s look at some reasons you say credit cards suck but really you suck:
Late Fees Suck
They sure do! That’s why they are there. It’s meant to punish you for being late and hopefully you remember the next time to get your payment in on time. If there weren’t late fees then everyone would pay late. If you pay late once it’s an accident and you can ask your credit card company to remove the charge. If you’re late more often then it’s all your fault and you have to look at your bill/pay system. You know you can ask to have your due date changed, don’t you?
They Trick You on Rates
Look, they may put the details in small print but the details are still there. If you didn’t read through them then that’s your fault. Read the details and ask questions!
The Minimums Are So Low I Can’t Get My Balance Paid
Every now and then we need a little help with our finances. Something come up this month? You can pay the minimum. But if you make it a habit to pay the minimum and you can’t afford more then you have to look at your spending habits and your finances. It’s not the credit card company’s fault you find yourself unable to pay more.
The Interest Rates Are Too High
Why are they high? Probably because you don’t have good credit and you are a risk. The credit card is giving you money remember? It’s like an instant loan. You know what it would take to go to a bank to get a personal loan just to buy a new sweater? Very inconvenient! That’s why the credit card company can charge you their rate. If you don’t like the high rate then start paying off your credit card balance and make sure your payments are on time. Then call them up and ask them to lower the rate. And here’s something else – If you pay your balance on time every month then it doesn’t matter what the rate is because you won’t have to pay interest!
It’s Too Easy to Spend
C’mon! Seriously?!? Have some self control. Take a look at why you think you need to use a credit card so often. Why are you spending so much? You can’t blame the credit card company because you can’t control yourself.
Stop blaming credit card companies!
No one told you to get a credit card. OK, maybe it helps to have one to build up a credit history but it’s not their fault if you abuse the card. Take control of you situation and start to do something about it!
Doctor S says
I told myself the same thing last Monday after I looked at my CC activity from the weekend.
It is def the spender that sucks. We need to hold ourselves accountable. We know the terms of our credit agreement, yet we freely swipe when we yearn for things.
All about financial self discipline. If you are blaming someone/something else other than the person in the mirror, you need a reality check.
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Those who don’t know how to use credit cards responsibly suck! They should just stay away from credit cards instead of blaming credit card companies for their problems.
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I don’t want a credit card at all and it seems there’s an effort to force them on people. There should be a law that anyone who asks for a credit or debit card must also allow you to do business using other means such as cash or money order or cashier’s check and retain privacy & anonymity to the extent that the circumstances could allow.
The Weakonomist says
Great post. I’ve always thought that the American people are really good at pointing the finger but not so good at being at the end of the finger. The CC reforms are fine but they won’t help too much.
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It is really hard to take responsibility for whatever situation you find yourself in…financially or otherwise. We humans have a TERRIBLY hard time simply saying “I was wrong” We really want to believe we are right all the time and that someone took us for a ride when things doing go quite right.
Great post, really enjoying reading!
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Coupon Artist says
Credit cards definitely are only a tool, and they only become a problem if used irresponsibly in the hands of the user. However, credit card companies do everything in their power to make sure they are used irresponsibility- they target college kids, they inundate you with offers in the mail, they use dirty tricks like double-billing cycles, etc. etc. So, perhaps it isn’t that credit cards themselves suck, but it is definitely true that Credit Card Companies suck!
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While I agree that you have to be responsible and own up, sometimes credit cards still suck! Even though I’m responsible, one of my credit cards raised the interest rate — just because. I know it doesn’t technically matter, since I don’t usually carry a balance, but it’s the principle of the thing.
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Baker @ ManVsDebt says
I think it’s both. Both the irresponsible users and the credit cards suck. Cut ’em up and ditch em.
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Kevin @ The Money Hawk says
No, credit cards do suck.
Tell me what other company on the face of the Earth can change the terms of your contract with them without your permission and simply because they feel like it?
Universal default would be fraud if they didn’t mention it in 1pt font. It still should be fraud though. If I sign up at 12%, you shouldn’t be able to raise it to 32.99% three months later because your company is losing money.
The best credit card is a cut up credit card.
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Ashley @ Wide Open Wallet says
HA… Love this post. Couldn’t agree more!
The Happy Rock says
I tend to fall on the side of credit card companies suck along with personal responsibility. As Kevin and Coupon Artist mentioned CC companies often do not have your best interest at heart and do their best to exploit our weaknesses. That is not a business model that I want perpetuated.
With that said, it doesn’t change the fact that people do need to own up to their mistakes and their weaknesses. The biggest way would be to that if you don’t like how credit card companies treat you, get rid of them.
It seems as though there is generally a causal relationship between the suckiness of you and credit cards. If you suck and use credit irresponsibly, then credit cards really do suck. If you’re smart about using them, they suck a whole lot less. Kevin’s comment about universal default being a terrible thing is definitely true, but doesn’t really matter if you use your card right. I could care less if my credit card company jacks up my rate, since I would never carry a balance or pay late.
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Bible Money Matters says
Credit cards and credit card users just suck! Irresponsible companies, and irresponsible credit card users = loads of debt.
Be careful people because they can only take advantage of you if you let them..
The title really caught my eye as you’re not usually that harsh! But yes, I agree with Pete. Having them in combination sucks more, but your points are valid. Things only suck when they’re against what you’re standing for. I’d bet those same people claiming the suckitude of credit cards would change their tune if credit card companies just sat there and let them pay at will… 😉
credit cards are great, if you pay them off everymonth you can get lots of stuff for free – over the years I have received free travel, free clothing from LLBean, and thousands off a chev pickup with a GM card. Find one that gives you what you need at this time, spend what you can afford, and get free stuff.
Do You Dave Ramsey? says
This is right on target… so many people want to find someone to blame other than themselves… if you’re encountering crappy behavior from someone… stop to think how you’re inviting those behaviors. It may not always be your fault, but you may also be surprised how often it is…
Thanks for sharing!
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The contract specifically states that the terms can change at any time. The contract you agree to when you sign up. And there is no contract binding you to the card. So I fail to see the problem. If you don’t like the terms getting changed, change them yourself: Cancel the card!
Well, now I feel a tad guilty for the rant on my own site in reaction to your piece yesterday. I gotta say, I’m sooooo relieved you were making this a two-part. Last night, when I read yesterday’s piece, I quite literally did a double-take. I went back and checked that it was you writing it. I couldn’t believe you were being so one-sided. Thank goodness you weren’t! All is right in the world again…
Thanks everyone for your great comments!
Sick and Tired says
WTF…I am sick of CC’s and CScores and all this ****. Never had a CC…don’t want a CC…wish like hell it didn’t exist…we would not be in this mess…lost my job because people lived on CC’s
Rajeev Singh says
I totally agree with you that its the credit card user who is responsible for the mess if any he finds in due to credit card charges. The fact that credit cards have late fees or have higher interest rate is no secret and is known to everyone and after that if one decides to pay just minimum balance and roll over the rest then he should not be complaining about high interest rate. After all nothing comes for free.
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Yep, I have to agree that is the spender that sucks. I know that when I was in major credit card debt, no one signed those credit card slips but me. It would be nice if people would accept personal responsibility!!!
As BibleMoneyMatters said, “they can only take advantage of you if you let them.”
Yeah, the credit card companies tricks do suck but don’t forget, you borrowed their money so you have to play by their rules. If you don’t like the rules, don’t borrow their money.
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Exactly! It’s their money you’re borrowing. I think a lot of people forget this. They get to make the rules since it’s their dough.
Loan sharks tell you the rules up front, but there is such a thing as usury. Therefore, loan sharking is against the law in every state in the country. The interest rates charged by many companies are usury as defined by those state laws, which the government has chose to ignore or provide exceptions for. I can’t remember the last time I heard of a usury charge in my state. I have never been late with a CC payment, which I pay in full every month, for the last 40 years. Yet my credit limits have been cut and the rates have been increased. If you have the resources to pay cash for your purchases and seldom use credit you don’t have the phony credit score to get the so called best rate. What happened to the practice of applying credit interest based on individual history and credit worthiness?
Credit card companies definitely suck.
Consumers have been irresponsible with credit cards and they know it. Some continue to blame the CC companies, but that falls on deaf ears. Nobody like a whiner.
Credit card companies have been cheating consumers for years with universal default, two-cycle billing, exploding interest rates and a host of late fee games. But, play time is almost over. The Govenemnt is finally starting to crack down on these practices.
I like my credit card – I get points to get free stuff at Amazon. Sometimes, too, credit cards make my life easier.
But I do pay it off every month, and I have never gotten myself into a situation where I was losing sleep over credit card debt.
But I have a lot of sympathy for people who get themselves in bad credit situations. It’s a HORRIBLE place to be. Whether or not it’s irresponsibility (and it might be bad luck, you know) that got them there, I still feel bad for them because we are all human and EVERY ONE OF US does stupid things, and has bad luck from time-to-time. Except maybe Hugh Jackman, apparently (he’s so cute).
I can’t entirely disagree, though, with credit cards being sucky. They definitely can be.
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@ Tessie – I agree that credit card debt is a horrible place to be but should other’s help pay for a debtors mistake? The person in debt still need to take personal responsibility at some point.
I’m a big believer in personal responsibility. For instance, I’m overweight, and I don’t blame anybody for that but myself. But when I get blue about that situation, I’m sure SOME people out there would feel bad that I feel bad (even if it’s just my sisters :), even though we all know it’s my own darn fault.
And I think this, too, about personal responsibility – sometimes I think that we just have to realize that it’s not possible to control everything. Sometimes people do everything right, and still everything goes wrong. They are personally responsible, but bad things happen all the time, even to extremely responsible people.
So to answer your question, maybe we should help out debtors, depending on the situation. Is it worth getting into serious credit card debt so your autistic son can be placed in an experimental program that health insurance absolutely refuses to cover? Some people would say that this is irresponsible because it is so risky, with no guarantees, but I can understand why someone would do that (and I know someone who did that, and is in a ton of credit card debt because of it, but she’s paying it off cheerfully, not whining about it at all. But it’s tough. So of course I feel sorry for her). But I don’t think this person to this day thinks that credit cards suck, because they helped her get her son into this program.
But no, of course I don’t think it’s right to help pay off someone’s credit card who’s gotten into debt over too many Coach purses. This person would probably feel that credit cards are very sucky. Yes, this person needs to take personal responsibility for this mess, but I still feel sorry for them, for being so foolish. That’s just the way I am. I know others don’t feel that way at all, and I can completely understand that, too. But like I said, we’re all human – we all do extremely foolish things (like me eating too many Twinkies).
Nothing is black and white, not even “irresponsibility”. It just depends – both of the above people might have $30,000 in credit card debt. But are they really the same? Hmmm. I don’t know. Some people would say “yes” and have convincing arguments to back that up. They could be right; I’m just a Texas housewife after all.
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@ Tessie – You’re right, not every case is the same. There are circumstances where someone may have no choice but to use their credit card and get into debt (like the case of medical problems).
Perhaps the help I agree with the most is education. If more people understood credit cards and how and why they work then perhaps they wouldn’t charge things up so quickly.
I don’t want to come off as cold. I feel for people in credit card debt; I’ve been there too. But it was my waking up to the problem of debt that helped me get out of it.
FFB, you’re absolutely right about education. Credit is a very complicated issue. I don’t think you come off as cold at all. You are fair -looking at both sides of the question. I do sometimes feel bad that others are so harsh in regards to others, and even their own, mistakes. I understand it, but it can make me wince.
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David Stillwagon says
This post is a great reality check! What is sad is that all this used to be common sense.
Spender sucks. Credit cards are great. I shop online a lot, awesome convenience. CC has features to create temporary CC numbers I can use for online purchases, with spending limits I choose, so CC fraud is never a concern.
I pay all my bills online, can view all my spending for any period of time I wish. Easy to track payments for things if I ever need to submit proof. The only thing I need to write a check for in my life is my rent, and all I have to do with that is put it in my mailbox downstairs.
I have had CC’s since I was 18. Have never been in trouble, and always pay them off each month. The problem is not the CC company it’s the people who use them and how they look at their CC. They are for purposes of convenience, as well as something that allows for the building of your financial reputation (credit score). When lenders can see via actual data that you are trustworthy, and when you say “Hey man, can I borrow $20 I’ll pay ya back next week”, you mean it.
People who get pissed at credit scores are jack asses. How else should someone who doesn’t know you judge whether or not you are a good person who will fulfill their obligations? Ideas welcome. Stop being a selfish prick and realize that you are not the center of the universe.
Kevin @ The Money Hawk says
This is a bunch of bullshit.
What’s the difference between you paying bills with a credit card and me paying bills with a debit card, or with online bill pay? It’s the same thing. You’re saying it’s a “benefit” to credit cards when it’s not an exclusive benefit. So who cares?
Second, I can see all my spending with debit cards and cash also. It’s called tracking your finances. You can do it online free these days. It’s 2009. Again, having a credit card is not necessary for this.
Lastly, people who get pissed at credit scores are not jackasses. The credit score is not a measure of financial well being or even financial fitness. It simply means you borrow a lot of money and pay the bills on time.
You can be completely broke, have no money invested for your future or your retirement, and have lots of debt and have a 750 credit score. That’s broken. It’s a broken system. People who don’t use debt but are worth millions of dollars can have a score of 0. It’s pointless. The credit reporting industry exists to sell your personal information. That’s how they make money. Nothing more, nothing less. You’ve duped and you’re proud about it. Go figure.
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Credit cards have better rewards. Last year I made $75 off of my credit card…my bank paid me $0.38 in interest.
Per your credit score argument, a history of borrowing money is relevant ANYTIME you are in a position that you will be borrowing money.
That’s like saying anyone who hasn’t failed any classes in medical school should be able to practice medicine…regardless of if they only took two classes.
Your credit score doesn’t measure if you can afford something (if you are needing to borrow then it is clear that you cannot afford it at this moment or else you would just pay cash for it); it measures your ability to pay back money you borrowed. Would you expect a degree just because you got A’s in the two classes you took at medical school? No, so then why would you expect a high credit score for paying back low amounts of credit?
Many people treat their CCs as their debit card, and actually use it to budget. My CC limit is only half of what I make in a month…that way if I max my card out there is no doubt I will still be able to pay it in full.
In this life there are just some things that we need to borrow for (house, car…though I’ve only ever bought my cars after saving up for the full amount).
CC can be used instead of debit cards because if someone gets ahold of your CC it’s not your money they’re spending, and they can only get out a certain amount…with your debit card they can clean out your entire account.
So, yes, there are HUGE differences and is most certainly NOT the same thing and no offense but it is naive to think so.
Your debit card doesn’t allow you to create temporary numbers online for purposes of security with limits of your choosing. Isn’t your debit card directly linked to your bank account? If I were to steal your money, it’d be gone right?
I don’t know for sure, I don’t use one. I do know however that is I have problems with fraud on my CC, like I did once when I was younger, I didn’t have to pay a cent for it.
I’m not duped. I don’t have lots of debt. I’m 30 years old and both my girlfriend and I are putting money away for retirement and have liquid cash reserves.
How do you think people should judge your financial responsibility then? You did a lot of back seat driving in your post with no solutions.
Are you implying that instead of credit checks, people should have open access to your bank balances to use as a way of judging your financial viability? If you wanted to borrow money from someone, and you had two choices:
1) A man who had multiple references who vouched for his history of being honest and paying people back
2) A man who has no record of borrowing from anyone, and no references at all
It’s really not complicated. You want to knock on credit cards and say there are better solutions out there? I’m sure there are. But saying that a credit score is a “broken” method of judging is silly. I have always been honest and prudent and my score reflects that, as it should.
Oh, and no one can have a score of zero. Also, I highly, HIGHLY doubt any human being on this planet worth that much has a credit score of zero. They still buy things. Those purchases are a bit different than your purchase of a car from some guy down the street off the books.
You want to stay off the grid? Fine, but don’t whine about the fact you can’t have your cake and eat it too.
Great Post. My $0.02:
Late Fees: Disagree! CC companies have even been known to flag payments as late if they arrive on the afternoon instead of the morning of the due date. This automatically triggers a whopping $39.99 late fee plus (double-cycle billed) interest. It may not be criminal, but it definitely belongs in the “you suck” category. In comparison, my mortgage, HOA dues, car, and phone all have documented late fees; these kick in after the payment is at least several days past due and range from a few bucks on the phone bill to about 5% of the monthly mortgage payment. Those are fair; they don’t suck.
Rate Tricks: Mixed. In a similar vein, I read on Bankrate that over 25% of people didn’t know whether their mortgage was fixed or adjustable. Guess they were “tricked” too. Sorry, but if you’re going to carry a CC balance, the onus is on you to understand the rate terms. On the other hand, CC companies regularly engage in practices like universal default, and will change rate terms on preexisting debt even if the customer pays on time. That most definitely sucks. In fact, it sucks so much that the feds are going to pass a law.
Minimums: Emphatically Agree! Why anyone would complain about this? All the credit card company is doing is giving you a choice; that is a good thing! Yes, they know those who pay only the minimum pay a LOT of extra interest. You should know that too and react accordingly.
Interest Rates: Agree. For those with good credit, the rates are hardly usurious. Remember that we are talking about (hopefully) short-term unsecured loans here. And if you pay the entire balance every month, the one-to-two month float is totally free.
Spending: Emphatically Agree! If your card makes it easier to spend, you probably carry a balance. If you know the entire bill has to be paid each month, there is not much psychological difference between cards and cash. I actually find that using a card helps me track my spending; I can always count on the folks at Amex to “jot it down” for me!
This may sound harsh but the worse people treat their CCs, the better the CC co. treats me. The money I get from them as rewards for borrowing and paying my balance in full each month come from those high interest rates that others pay. I’m 25, had a card since 18, and have not paid one cent of interest…they could raise it to 100% and it has no effect on me.
Now, there are definitely circumstances where one has to borrow (car, house, education, health) and those are the unfortunate cases where I am sorry that high interest rates exist. But the fact of the matter is, for everything else especially, too many people regard credit-cards as extra expenditure opportunity on a regular basis. It shouldnot be considered extra income…it is not.
YOU charged it
you pay for it, no matter what the card companies say
1.toss out the card, use cash
2.pay as agreed
3.pre-pay ahead of time
I promise to work for min wage so that others may profit from my labor. I will pay others for the right to breathe. Clean air and water cost extra, i agree to pay. i will use credit cards to support the noble and good banks.
Okay, maybe not credit cards.
Considering the credit card company reserves the right to change the terms and conditions agreement for reasons that are completely outside of and irrelevant to one’s credit and payment history, I would say the credit card company sucks. You could pay in full every time, have a credit score of 820 and still have your grace period shortened, see mandatory arbitration clauses on your terms and conditions, and now possibly be charged inactivity or low usage fees. In each of these examples where the cardholder is blameless the card issuer sucks.
But the bottom line is the consumer is asking for a loan from the credit company. You don’t have to use a credit card.
And recent changes to the industry with the CARD Act of 2009 should help in preventing card companies from making changes due to actions outside of the credit card (universal default). There is also a minimum grace period on accounts.
You got that right, Christina – No matter what kind of history you have, the banksters have tilted the tables more and more in their favor, so that the public has fewer rights and recourse.
People who can’t handle credit should not have it. My mom has a 760 credit score but only had one card because she felt she could not handle more. That is being responsible.
I think a lot of people start out thinking they can handle credit cards and then it runs away from them. A person has to keep aware of where their spending is going. Your credit card sends a statement every month and it needs to be checked.
Timothy Moe says
No – Credit Cards and especially the companies that manage them suck. 30% interest if you are late?! Please – that is not credit. That is called loan sharking. I always pay over the minimum to these crooked banksters, but if I am a day late, they freeze my account without warning. I am paying off their crappy cards, and cutting them up. I am sick of being fleeced.
If you are using a credit card as a method of borrowing large amount of money you don’t have, you suck not them. You are gambling in that situation and the house always wins. Oh, and if you’re using them because you “have no choice”, you still suck, because guess what? You already lost. If you can’t make payments on whatever you need to, piling up CC debt will only make matters worse and delay the inevitable. Better to face the situation realistically now than put it off and make it 10X worse.
If you use them responsibly for their convenience you don’t suck and the relationship between you and the CC company is mutually beneficial and fair.
This really isn’t complicated.
Predatory lending and suckers that they take advantage of both suck.
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