The infinite debt conspiracy

In this thread i would like to present an article from Cracked (i know this is not a reliable website for facts but the points provided in the article are quite good).

The article presents how banks use the interest rate and minimum balance payment in order to get you in a loop of infinite debt.

Incredibly, the above isn't an exaggeration. There are people in this situation right now where each payment to their credit card company leaves them owing more. Only in the last few years has the government moved to stop banks from putting people in this cycle of infinite repayment (where the interest and fees are more than the monthly payments).

Source

reply to post by AlexIR


Your link goes to "Creditcardchaser.com/what-is-the-highest-credit-card-interest-rate-allowed-by-law"

Honest C&P mistake or..?

This is the relevant Cracked article I believe.

reply to post by DupontDeux


Fixed, sorry i had to do a fact check before posting and apparently credit card companies can set whatever interest rates they want and what balance payments they desire without any regulation by the state.

reply to post by AlexIR


Oh, I quickly closed the window thinking it was nothing but an ad.

Sorry for implying it could be deliberate spam. )

reply to post by AlexIR


This is, to me, the biggest trap...and sooooo easy to fall into. The thing is, as long as you keep making those minimum payments on time, they will just keep upping your credit limit. I currently have a capacity to utilise £26,500 on credit cards, and yet, I earn less than 8 grand a year. Shocking really.

I don't run up credit on them, but keep them ticking on...just in case I ever need to leave the country in a hurry.

reply to post by AlexIR


The Federal Reserve works along the same premise, but instead of ensnaring individuals, they do it to whole governments.

Originally posted by KilgoreTrout
... making those minimum payments ...

Which is of course the biggest mistake.
Credit cards are perfectly fine if you treat them as *temporary* credit.

Frankly, I lost interest in that article as soon as I saw the scenario was making the minimum payments for DECADE after DECADE.

As long as banks are allowed to lend 90% on the dollar essentially 10 times the amount of cash they have on hand. an infinite debt cycle is inevitable. We truly are a slave race!

reply to post by alfa1


True...but they push credit on people, and in a society that is focused around instant gratification it is inevitable that some will bite. Common sense will prevail with most, but those are not the customers that make banks money. It's a sticky trap, and once caught, very difficult to extricate yourself from.

reply to post by alfa1


A lot of people only pay the minimum balance because lets be honest who likes giving money so they will automaticaly the smallest amount possible, even if you pay ever 6 months the full balance you will still be in a loop of infinite debt.