House of Cards
Signing up a new credit card customer: $58. Buying off Congress: $8.5 million. Keeping Americans in hock for life: priceless.
In 1970, 51% of Americans had a credit card, compared with 93% today. The average cardholder has 7 cards.
Americans owe $850 billion in credit card debt. The world's 54 poorest countries owe $412 billion in foreign debt.
A "preferred customer," according to one MasterCard vice president, is someone with a "taste for credit" who's "willing to make minimum monthly payments—forever."
60% of Americans have been in credit card debt for more than a year.
The average U.S. household owes $9,659 on its credit cards.
If you owed that much on a card with a 14% apr (the average interest rate) and made 2% monthly payments, it would take you more than 6 years to pay off—and you'd pay $4,922 in interest.
1/3 of Americans claim they pay off their credit card bills in full every month.
Inside the credit card industry, these customers are known as "30-day wonders" or "deadbeats."
The average American household spends 14% of its disposable income paying off debts. It puts negative 0.5% into savings.
Last year, banks sent out 8 billion credit card applications, a 30% increase since 2005. Credit card companies spend an average of $58 to sign up a new customer.
Madonna reportedly gave her 9-year-old daughter a credit card with a $10,000 limit in 2005. A friend told In Touch, "She is hoping to teach Lourdes to be responsible with money." The Material Girl's publicist denies it.
In March, Hasbro announced that Visa would be the "preferred form of currency" in a new Game of Life. A Visa exec called the move "a powerful illustration of consumer preference to pay with Visa for everyday purchases and once-in-a-lifetime experiences."
Americans charged $51 billion worth of fast food last year, a 29-fold increase since 2001.
1/3 of low- and middle-income households report going into credit card debt to pay for rent, utilities, and food.
Kiss of Debt; Make Love, Not Debt; Wallowing in Debt; and Broke-Ass Student are among the dozens of "debt blogs" that chronicle their authors' struggles to pay off credit cards and other bills.
Since 1996, when the Supreme Court struck down limits on credit card fees, the average late penalty has jumped 162% and the average fee for exceeding credit limits is up 138%.
Credit card companies earned $90.1 billion in interest last year. They earned $55.2 billion in fees.
|
Product |
The Fine Print |
The Pitch |
|
|---|---|---|---|
|
american express red |
1% of sales goes to aids relief |
"Feel great about spending, whether you're buying cappuccinos or cashmere." |
|
|
usher debit mastercard |
$19.95 to "activate" |
"The Usher Raymond IV Debit MasterCard...will financially empower people." —Usher |
 |
|
hello kitty debit mastercard |
$1 per minute for phone service |
"We think the target age will be from 10 to 14, although it could certainly go younger." —Sanrio VP |
 |
|
hilary duff prepaid visa |
Get a $25 card, pay $7 in fees |
"So many of my friends have started getting credit cards, and the banks don't really tell you how this works." —Hilary Duff |
|
|
enlightenment visa reward card |
Spend $3,000, get a yoga mat |
Buddha-themed cards help users "evolve their own personal life path." |
 |
|
kiss visa platinum card |
32% maximum interest rate |
"Credit cards, by and large, are for suckers." —Gene Simmons |
 |
After Discover charged a woman more than $9,000 in interest, penalties, and fees on an initial bill of $1,900, an Ohio judge erased her debt in 2004, slamming the company for being "unreasonable, unconscionable, and unjust."
Nearly 1/3 of bankruptcy filers owe an entire year's salary on their credit cards.
In 2005, Congress tightened bankruptcy rules at the behest of credit card companies.
In 2006, the top 5 credit card companies—JPMorgan Chase, Bank of America, Citibank, Capital One, and HSBC—made $8.5 million in congressional campaign contributions.
Almost half of bankruptcies are due to medical expenses, according to a 2001 survey.
As of late 2005, 900 soldiers injured in combat owed the military $1.2 million. Nearly 3/4 of these debts were due to errors. An Army sergeant paralyzed below the waist was saddled with $15,000 of debt.
Soldiers with a Pentagon-approved Military Star card get lower interest rates if they are deployed in a war zone. All debts are written off if the cardholder is killed in combat.
contract hits: A typical card's contract was less than a page long in the early '80s; it's now more than 30. Terms can change at any time, for any reason.
let's bounce: 20 major cards issue blank "convenience checks" that they may decide not to honor, for any reason. Cardholders are slapped with an average of $31 in fees for each rejected check.
growing rates: Almost all popular cards hike interest rates if users miss payments or exceed credit limits. The average "default rate" in 2005 was 27.3%. More than 2/3 of cardholders don't know about this.
outside interests: Some cards raise customers' interest rates if they miss payments to other banks or creditors.
double trouble: Several cards use "two-cycle billing" to charge interest on the original amount spent—even if you've paid part of it off.
In 2004, homeowners spent more than $150 billion from second mortgages to pay off credit cards and other debt.
The World Wide Association of Specialty Programs encourages parents to refinance their mortgages to send their kids to its "emotional growth boarding schools."
In 2001, First USA signed up two students as human billboards in exchange for paying their college tuition. The credit card company made late payments, almost forcing them to drop out.
Installed in the cars of drivers with subprime auto loans, Payment Protection Systems' On Time device issues payment reminders and disables the vehicle if a payment is missed.
The Koran forbids charging interest. In 2002, a bank in Bahrain released "the first Islamic credit card that conforms to Sharia principles."
In 1978, the Supreme Court ruled that banks only have to follow the interest rate limits in the state they're based in—not the states where their customers live.
After the ruling, Citibank's credit card division relocated to South Dakota, which had just lifted its usury laws. "That was a good deal for us," said then-Governor Bill Janklow. "It was a hell of a deal for them."
In Dante's Inferno, usurers occupy the seventh circle of hell.
Page 1 of 1 
Welcome to the 21st century global sharecropper society...pay rent to rich people overseas, and spend the rest of your life in hock. THEY know where you'll be, Monday morning...and, so do you! So, if your life basically blows goats by virtue of just being a time
period in which you satisfy the payment
requirements of creditors, and the
completion of the ancillary paperwork inherent thereto, just remember it's not an accident, and getting yourself extricated from the above described circumstance will be no accident, either. Moral of the story? If you're so deep in the red that you'll never see daylight again in the financial sense without some sort of divine intervention, intervene on your own behalf, and develop a personal budget
recovery plan. Part and parcel to this is a good sharp pair of scissors, and a calendar, clip your credit cards in half, and calculate how many months it'll take to close out your credit accounts. It may take months, it may
take years, but when you're done with it, you'll thank yourself.
Remember, if you can't afford it the first time, you won't be able to afford it the next four times you end up paying for it. Just say 'no'...
North Dakota???? Guys, for god's sake check your facts. Citibank's division relocated to Souix Falls, SOUTH DAKOTA. If you actually read your statement for more than 5 seconds you'd know that. Very very very bad.
I have mixed feelings about this. If people are dumb enough to over-consume, then why not just make money off them? Frankly the only thing that bugs me about it is the environmental cost - that hurts us all, even the smart ones.
Most people will tak MUCH longer to payoff that debt. Paying the 2% of the original amount for ^+ years will indeed pay it off, but most will pay the minimum every month...
As you balance decreases, your required minimum goes down. Paying JUST the minimum will take something close to 35 YEARS to pay it off.
AND both these scenarios assume that you NEVER charge another cent.
Is it any wonder that the average American is in trouble financially??
Citibank is in South Dakota.
I love the fact that more people comment on a mistake of where a bank is rather than the most shocking fact listed - Almost half of bankruptcies are due to medical expenses, according to a 2001 survey.
That's a very sad statement about life in the US in the 21st century.
Let’s say that your portfolio was packed shares of bullet stock
That because of fine politics was always solid as a rock
Predictably your dividends came wafting in like autumn leaves
While every Sunday you’re in church or maybe coaching little league
And little more thought do you give to your accounts live and let live
But then one day a war breaks out soaring the value of your shares
Would you just sit around and pout about the state of world affairs
Or watch the stock report to see
How much your net worth’s been up-beefed
Would you in that case pray for peace or hope negotiations ceased?
This peace and pabulum’s a fancy live and let die is how it must be
Oh but that this God of war would back into his brazen jar
Be sealed until the end of time and foul no more this air sublime
Away with his damned profiteers Phobus Deimos Lord of Fears
Et alii desist and cease forevermore our claim to peace
But sadly you were right old tsar for only in Pandora’s jar
Might we find enough persuasion to forbear frank resignation
That peace is not will-o’-the-wisp that miracles do still exist
For what else could despite the facts inspire such optimistic tack
Against an entrenched dynasty of puissant kakistocracy
Where specialists in usury have taken o’er the nursery
Raising sown-men material who brandish the canon of greed
For little else have they been taught and of little else have need
Beware the day will come when you having no more to consume
And famine cursed will e’en devour those same children roughly hewn
‘Til done and feeling no remorse sharpen your knives for the main course
To dine à la Erysichthon and banquet on oblivion
from the book "The Velocity of Falling Bodies"
And, of course, you are enticed to sign-up to borrow at zero percent for up to 12 months, right? That seems like a fair period to get you hooked. Now, if that were a guy in the street telling you that the "First one's free, kid...", well, we would want to put that rat bastard away for a long time. But since it's a "banker" who wears a suit and has a degree? Well, that's ok...
Is this new corporate, human (cattle prodding) tactic of >'Installed in the cars of drivers with subprime auto loans, Payment Protection Systems' On Time device issues payment reminders and disables the vehicle if a payment is missed.", (AT&T does it too),just another corporate lobbying, bought and paid covernment authorized tactic, or is it just corporate policy? This form of fiduciary mind control has to be illegal.
Thank you MJ. This is an excellent article. God, how I wish people would take note how much we are pushed and pulled, by propaganda and advertising to do what we really don't want to do.
I had my wallet stolen a week ago. I was so happy that I have never been approved for a credit card(and didn't have any cash in it either...just had to spend 4 hours at the DMV)...reading this article has definitely made me appreciate it even more...However, the corporations, credit card companies, etc. are making it more and more difficult to do anything without a credit card...Yet, having one is not only a danger to getting oneself in debt--it's also a sure way to have your identity stolen if you loose one, or just use one over the internet at the wrong time, or at a site that is being infiltrated....It's ironic, too, that all this technology that's being developed to help Imperialize(globalize?) America, and make tracking its citizens easier--for when the Gov't finally declare marshall law, after looking the other way (again) when the next terrorist attack happens and the mostly gullible and generally spineless population cries "oh please protect us" to the ones that engineered this [deleted]hole in the first place (our Gov't leaders, people who--at least in this administration--talk about God all the time, but "deity" they worship is money..) I can't believe people are willing to give up their freedoms for a promise--a false one--of security, especially from an administration that lies every chance it gets, has no memory, and is accountable to no one! Personally, I would much rather die than live in a police-state...Which is what they want. The Government's policies make absolutely NO sense. This year, our "Justice Dept" prosecuted more people for the possession of marijuana--a PLANT!!! that has taken 0 lives, than they did for rape, murder,& all the other drugs combined! Almost 900,000 people! Almost 90% for mere possession! Yet Alcohol remains perfectly legal, though it has killed COUNTLESS numbers of people...But our society has become so dumbed-down from sucking on the glass tit of T.V., and so scared of speaking out (or just too lazy) that this madness continues. They were able to figure out prohibition doesn't work, with alcohol, so much so that they legalized a very dangerous drug. Anyone with half a brain knows cannabis is pretty much harmless (though I am NOT condoning it's use by minors,or abuse by anyone--the truth is, prohibition is what draws drug dealers-the black market. And they don't card. Half the violence, and a whole lot of drug dealerswould be put out of business if we legalized, taxed, and regulated cannabis in a way similar to alcohol...it would generate an enormous amount of revenue. But apparently, the alcohol company lobbyists and other corporate lobbyists are willing to paya huge sum to keep it that way. And of course, it's a way to keep minorities and poor whites down...they could stop the stuff coming in if they really wanted to, but they don't. They know people love it--it gives a brief respite from the rat-race, without the subsequent freight train hangover the next day...They let it in so they can continue their imperialistic domination. Thank God,that there are a few rational people around in the courts, or the DEA would have made it a death penalty or life sentence--don't laugh, there are people who want that--for mere possession, again, of a naturally growing, chemically unaltered PLANT! Yeah, heroin and cocaine are made FROM plants, but they are severely chemically altered...The only alteration to cannabis ever made is an old trick called cultivation farming, and smokers can tell the difference between regular commercial weed and the new scare of super-weed, just like one can tell the difference between whiskey and beer.. Everyone says it makes you into a couch potato and all this...well, if it's doing that, then they're doing too much. All it's ever done for me is to help get the creative juices flowing..a definite motivator. But I apologize, I've wandered way off track. It's just an issue I'm passionate about; if you smoke and you're not passionate about it, you're either dumb or you've never been arrested. For a plant! I just think it perfectly expresses exactly how screwed-up the system is.
I don't think Citibank is "in" South Dakota. Multinational corporations choose a place where people need jobs most, & race to see how they can pay the least to their employees. They just open up a windowless, guarded building & train people to input computer data, whether it be in low-wage U.S. states, India, or wherever they can pay the least.
Didn't David Rockefeller sell Citibank to a group of Kuwaitis?
I'm eight teen years old and haven't joined this band wagon yet but I have not found a way around it yet.... and that is a scary thought because I can't change it. to function in society I have to join.
a) pay with CASH; b) pay with a CHECK; c) pay with a DEBIT card. Don't use credit if you can't or won't read the fine print, or if you can't afford the fees. Upping the fees may help reduce credit card usage in the long run. The short run will be painful, no doubt.
Well, i still find CC's very useful for airline benefits. You just have to pay them off every month! I'm proud to be one of the so called "deadbeats". I've had many cc's for 15 years and never once paid late.
Thanks for pointing out the error. It's been corrected.
If you are a responsible user (i.e. deadbeat) you can get a good credit score by using your credit card, even on small purchases, and that will help you get a better interest rate on a home mortgage.
A couple years ago there was a 100 year old man interviewed on TV .
He was asked about his long life.
One of the things he said was that he never had a credit card, and he warned against them.
Many would be wise to heed his advice.
I'm not saying all should. I know many who can handle CC's responsibly.
But for those who can't, they can find themself in CC hell.
It's not difficult to live without a credit card. I haven't used one in many years. Cash and debit work fine for me.
I would rather be known as a "30 day wonder or a deadbeat" than a "preferred customer". Debt is a ball and chain. The ball or "addiction" keeps rolling downhill dragging the chain and you along with it.
If you do join, be smart about it.
Never charge more than you can pay off at the end of the month.
Always pay the balance on time.
Make having an emergency fund top priority.
I love credit cards, I have 5 of them. What I do is charge up one then I pay the minimum payments using the credit line from another. Then I transfer balances to another card when the promotional rate expires. I don't even have a job and have been living on the credit cards for 10 months now.
I agree with Billybob, why not blow the credit cards money? I charged up over $28,000 in credit card debt four years ago and then simply declared bankruptcy. I had credit card offers in the mail less then two weeks after that. The first card gave me a $5000 line on which they charged 28% interest. I took that card and maxed it out also.
The statement "Credit card companies earned $90.1 billion in interest last year" is false. Credit card companies earn fees, not interest. The banks that issue credit cards earn the interest on the debt. While some of the points made are spot-on, this classic misunderstanding of how the payments business works reveals a tired agenda ("credit cards are bad") as opposed to an actual desire to gain enough understanding to work to change the addiction of consumers to credit debt.
I have banked at a bank I shall call Walk-over-you, I live abroad and I am retired. The only way I can get my check is via wire Transfer, cost 50.00 usd. Or ATM, to get my CASH. The bank was charging me 1% now the charge me 2% on my debit card to get MY money. When Inquired, they told me it was the card company charging not them. I am in the process of switching banks now. The new bank only charges me 1% I feel the old bank I have been with has told me a lie. I use no CC and pay cash for everything. Much better way in my opinion.
Instead of placing all of the blame on the credit card companies why not place some of it on the folks that sign up for the cards? Or how about some blame the parents that don't teach their kids about using credit cards wisely. No one forces you sign up for a card.
The problem is that the credit card companies know that people don't save for rainy days. So when a rainy day comes along the credit card companies are generous enough to help the people out financially. Most credit card companies are actually very kind to lend money to people who need it. I like to think of them as the Mother Teresa of lenders, a godsend. We all have used credit cards at some point to get through an emergency, what if they were not around? You would have to go without. I think we should all write letters of appreciation to the card companies!
Why is it that in school (meaning from kindergarten to college) we are taught so many things that we don't actually apply to life? Especially condsidering how many people are in debt. Wouldn't classes that teach us how to stay out of debt and what to do if we get into debt be more effecitant then teaching us useless trivia facts we won't remember. The worst part is even if we do remember them the more then likely they will never help us in life.
well besides sounding intellegent. but who really cares if you sound intellegent if you end up homeless because you didn't know how to manage money.
Amanada J, How dare you! Don't you know those facts will help you everynight at 730 when Jeopardy comes on? Don't you want to impress your friends with your random knowledge? There is a need for public schools to balance life skills with scholastic skills as our society becomes more fast paced and multi-task oriented. Money-management, negotiation skills, and public speaking need to be taught thoroughly instead of skimmed over in high school. Perhaps it is time to add a semster's worth of curriculum to the status quo.
I am a 68 year old man. I use to smoke weed in the 1960's.I stoped 40 years ago.I have cronic pain from being a Diabetic and to many other health to mention.Doctors have had me on narcotics for years.these pills dont work anymore.I just started to smoke just a couple puffs at night to help the pain and it helps me sleep.One joint lasts me 5 days and I am sure that would not even show up in my blood work.My Doctor has not said nothing about it in my blood work.I at least have some quility of life with the weed.
Citibank is in South Dakota.
Citibank is in South Dakota.
16 I tip human hair extension
Great. Now i can say thank you!.
I am from Iceland and learning to read in English, give please true I wrote the following sentence: "Harle, in the cycle, refers generally as a fire, meaning and losing serge and his search, and implying with their races, took with groups determined at serge."
Thank 8-) Cerise.
