Why Credit Card Companies Want To Keep You In Credit Card Debt
While most people think of credit cards as a convenience and even a help the truth is that they can be your worst enemy and are designed to get you and keep you in debt. And that is because credit card companies want to get you into credit card debt and keep you there for as long as they possibly can.
Think of it this way. Credit card companies make their money off the interest they get when you carry a balance on your credit card. This means when you pay off that credit card each and every month the credit card company makes little if any profit. The only way they can make a profit from issuing that credit card is if the credit card holder cannot pay their monthly charges in full and has to carry a balance from month to month. When you carry a balance, the credit card charges interest on the amount of money you still owe. And that interest is figured into your next monthly payment. Your monthly payment amount is made low enough to just cover the interest you owe and a very minimal amount of the principal so that you will continue to owe for your charges.
When you use the credit card the next month and again leave a balance the credit card company then tacks on even more interest and on and on it goes. In the end if your balance is high enough you may spend months and even years making credit card payments and never seeing the balance decrease significantly. Which is exactly what the credit card company wants. After all, if you catch up and pay off that balance then the company can’t continue to collect interest and there goes their profit.
So before you charge that next item on your credit card stop and think about who is really going to benefit. The chances are it isn’t going to be you unless you can pay off those credit card charges in full at the end of the month. Don’t be fooled by those seemingly good deals that credit cards companies offer as any offer they make are designed for only one purpose and that is to increase their profits and to do that they need to keep you in as much credit card debt for as long as they possibly can.