Banks & Credit Card Companies Have Incouraged Indebtedness

Credit card companies are marketing to college students, so the borrowing habit begins in the earliest stages of adulthood Credit cards can now be used to pay for essentials such as groceries and rent Credit card companies offer low initial interest rates to entice borrowers to transfer balances from other cards. However, the rates then increase considerably, usually after only six months. Many companies, like GE Capital Services, are now charging penalty fees to customers who do not carry a balance on their credit card Credit card companies normally require minimum payments of only 3% of the outstanding balance. But that means the typical $3,900 balance, at 18% interest, would take nearly 42 years to pay off, and those monthly payments would total $14,530.44. Capital One advertises they'll lower your minimum payment from 3% to 2% for a fee. What they don't tell you is that paying only 2% of your outstanding balance each month could make the bill last longer than you do. People commonly borrow against their home equity. United Jersey Bank advertises that you can make minimum payments, only on interest, for up to ten years. Imagine, ten years could pass, you could pay thousands of dollars, and still have made NO progress on reducing your loan. Banc One is planning to test Visa and MasterCard accounts that will allow you to borrow up to 40% of your 401K plan before retirement. Nothing like throwing away your future for a little immediate gratification.