Financial and Credit Cards
Credit cards are important to many people in that they help individuals buy items that they would not have bought. However, there are many negative effects that the cards have on the spending behaviors of people. It has been estimated that most of the adults in United States carry about 9 to 10 credit cards. This shows how much the people have become used to the cards. What is most surprising about the documentary is that the credit card owners have the power to change interest rates without consulting their customers. In addition, the companies fix due dates to be on weekends or during the holiday so that the customers can be charged for their lateness. This shows that these companies have unfair methods of extracting money from their customers.
I think the government should regulate the interest rates charged by the credit card companies and who gets the cards. This will ensure that the people who are able to incur the huge costs of holding the card are the ones who get the cards. The government can use the Federal Reserve to control these credit card owners. The low income earners will benefit in that they will reduce their unnecessary expenses. The customers will all benefit in that, there will be certainty in the interest charged on the cards.
Nobody loses because the companies benefit also. Fair competition between the credit card owners will be ensured. These companies will still gain profits with the regulations.
Credit cards affect the purchasing behaviors of individuals adversely. People are tempted to spend more than they have. Impulse buying is very common among people with the cards. This is what causes overspending when people buy things they had not budgeted for.
The credit card companies benefit more than their customers. They gain many profits with the high interest rates they charge to their customers. They have the power to adjust the interest rates to favor their profits. The customers benefit to a lesser extent in that they pay much interest on the money they borrow by buying more goods than they can afford.
With the information I have gained, I will now be careful when using the credit cards. I will only use the cards at times of high need. Their importance cannot be ignored even though using them frequently leads to loss of money.
