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When you combine the American consumer’s passion for instant gratification and the banking community’s eagerness, for a price, to satisfy that passion, then the stage is set for a consumer np-off which would make Jesse James blush with envy.
^ referring, of course, to the runaway use oi bank credit cards and to the equally runaway interest rates which have become incidental to their use.
J*16 problem Sot out of control in 1983, when the General Assembly, piteously lobbied by the teary-eyed banking industry, was persuaded to take the cap off credit card interest rates in order to allow the banks to charge interest on plastic credit comparable to that charged on other types of loans. Well, the going rate at that time for any kind of hired money came to 18-22 percent, thus such a charge for past due payment on the cards did not seem to be that much out of line.
But what has happened since then? The rates charged on other kinds of loans have tumbled to just over 9 percent, but not on credit cards. The rate for them is still, but is not limited to, 18 percent. And not only that, but banks actually discourage their customers from reducing the balance due on credit card accounts.
When the bill arrives, the customer gives it a quick glance to see what is owed. If payments have been made on a fairly regular basis, the cardholder may be puzzled to find the bill indicates no money is due.
At first it might seem like a nice surprise. “Oh goody,” he might think, “I’m such a good customer they are letting me skip a payment!”
Ha! Don’t you believe it. It’s just that the bank would rather have the 18 percent additional
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