truth
Credit Card Companies Profit When You Stay In Debt
Credit card companies make their money by charging interest on purchases you make. The longer it takes to clear your balance, the more interest they charge and the more money they make.
If you’re able to pay off your balance each month, you are charged very little interest, resulting in lower profits for credit card companies.
Most people would call you financially responsible. But the credit card industry has a specific term for people who do this — They call them “deadbeats”.
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Welcome to Credit Card Deadbeat*. We’re here to help you get out of credit card debt.
So YOU can be a credit card deadbeat too. : )
$1,008,000,000,000
Amount of credit card debt held by Americans in 2023
Credit cards, they’re the darlings of the consumer era. Swipe here, swipe there, and everything’s taken care of – it’s all so seamless.
We’re told it’s about financial freedom, about the convenience of cashless transactions.
But let me tell you something – our generation, touted as the most connected and informed, is drowning in credit card debt. It’s not a badge of honor; it’s a mark of a system that preys on our impulses and financial illiteracy.
Credit card companies have sold us a narrative that says, “Swipe now, worry later.”
But here’s the punchline – the average credit card debt per American household is over $6,000. It’s not a punchline we’re laughing at; it’s a punch in the financial gut.
The amount of credit card debt we owe in this country is now over a jaw-dropping $1 trillion dollars.
Let’s not kid ourselves about credit card companies. They’re not friendly companions on our financial journey. They’re not handing out credit limits with a friendly pat on the back.
They’re sharks circling the waters of our wallets, driven by a singular motive – profits for their shareholders.
“They’re sharks circling the waters of our wallets”
They’ve turned our indebtedness into their cash cow, a reliable source of revenue that keeps on giving.
And the credit card debt that’s currently eating away at your bank account is just padding their already plump bottom line.
The credit card companies hold it. They’ve got us over a barrel with it. And it’s time we did something about it.
$1,500,000,000
Amount credit card companies spent on advertising in the United States in 2022
Let’s talk about the marketing – it’s a slick operation. They paint this picture of a better life with every swipe. Buy now, pay later, they say. But what they don’t say is that “later” often comes with a hefty interest bill.
Here’s a little little nugget for your consideration – credit card companies opened up their coffers to the tune of a whopping $1.5 billion on advertising in 2022.
Wrap your head around that figure; it’s not pocket change; it’s a calculated investment aimed at persuading you to sign up for more cards and, of course, to run through more transactions.
“It’s a calculated investment aimed at persuading you to sign up for more cards”
They entice us with rewards programs, offering an illusion of something for nothing, and we, ever the hopeful participants in this financial game, take the bait.
3
Number of credit card offers the average American receives per month
And let’s talk about the ease of access. Credit cards are practically thrown at us.
The average American receives around three credit card offers every month.
It’s like they’re inviting us to a financial party, but it’s not balloons and confetti – it’s fine print and hidden fees.
$160.7 Billion
Amount merchants paid in swipe fees to credit card companies in 2022
Cash-back and rewards actually raise prices for everybody.
They sell us on the idea of rewards and cashback, making us feel like savvy consumers. But let’s do the math – those rewards are a fraction of what we’re paying in interest. It’s like a game of poker where they hold all the aces.
Why do you think they throw around those membership and cashback rewards?
It’s because it doesn’t cost them anything.
They don’t take it out of the interest rates they hit us over the head with every month.
No – they roll it into the swipe fees they charge to merchants.
The merchants aren’t going to eat that cost; so they pass the cost off to us by raising prices.
So while the credit card companies lure in more and more people with what look like free rewards, you and I get to pay for the whole thing with higher prices at the cash register.
They make you think you’re winning with those cashback rewards, but behind the scenes, they’re making sure the house always comes out on top.
$700
How much extra you would have to pay in one year on a $5000 balance at 21% interest
Charging you interest on the interest
In 2023, the average interest rate on a credit card is 21%. Imagine you owe $5,000 on your credit card. At 21%, you’re basically agreeing to pay $700 each year just for borrowing that money.
And don’t get me started about the late fees, annual fees, and over-limit fees?
Here’s the catch: credit card companies use something called compounding interest – they don’t just charge you interest on the money you borrowed; no, they charge you interest on the interest itself.
It’s the reason your debt can snowball leaving you stuck in a loop of debt. Credit card companies are making a ton of money from the situation while everyday people are trying their best to make ends meet.