Credit Card Companies

Credit card interest rates should be a fixed rate and not set based on a person's credit score. Credit card companies use credit scores to take advantage of consumers who are more likely to be trapped financially by high interest rates. Good business involves both parties achieving their individual success. In a country that is designed on the principals that everyone is equal and valuable, this country has allowed credit card companies the opportunity to use risk as an excuse to punish consumers for the sole purpose of profitability. All the credit card companies clearly take advantage of the Americans who need help while rewarding Americans who do not need assistance. Credit card companies use lower credit score customers to increase profits and cover these rewards. Certainly everyone can agree that it is a good practice to reward the consumer who has excelled with his or her finances, but unfortunately this reward comes at the expense of other consumers. A two percent decrease in an interest rate is not much of a reward when a neighbor with a lower credit score receives a 12% increase on his or her interest rate.

Credit card companies solicit offers of high interest credit to consumers with lower credit scores. Seventy two percent of credit cards give the consumer low introductory rates that the creditor could revoke if one payment is received late (Pew Safe Credit Card Project, March 2009). Credit card companies offer to take over unsecured debt even when a consumer has had late payments. These same companies will raise interest rates on customers who have never been late on a payment. When the consumer questions the new rate credit card companies use the faulty pretense that there is a new risk evaluation process. Delinquency rates have hit the lowest rate they have hit in eight years yet interest rates are still going up. This situation seems to be growing more out of control. Millions of pre-approved credit card offers with ever increasing interest rates get mailed out every day. These letters have no genuine intention of securing the customers financial future. These letters's only intention is to entice individuals who are struggling desperately to pull themselves out of a financial slump. The biggest part of high interest supporter's argument falls into the thought that credit card companies are not responsible for the customer's bad decisions. These same companies design ridiculous credit cards with no other purpose but to make a profit off people so desperate that they would consider 29.9% interest a good rate. CNN/money printed a story in February 2011 by Blake Ellis that covered an amazing story about how absurd these companies are getting. He told that 58-year-old Toni Riss had severely bad credit and was relieved to be receiving a credit card with a 29.9% interest rate. She was completely happy with the card until, at the end of 2009, six months after obtaining the card she received a letter that her interest rate was going up to 79.9%. Amazingly the bank, "First Premier Bank," confirmed that they offered a card at 79.9% and the card has many fees, but they denied ever raising existing customers' rates. This same bank was called a "fee-harvester" credit card company by Chi Chi Wu, the staff attorney with the National Consumer Law Center, in a separate article done by ABC news titled Credit Cards Gone Wild. This company and the idea that any consumer could ever benefit from a 79.9% interest credit card is a ridiculous notion. First Premier Bank alleges that this interest rate is an attempt to cover their risk when dealing with lower credit score clients, but the bank does not provide any proof to support this statement. Clearly this type of interest rate is a desperate attempt to take advantage of struggling Americans.

A balanced low interest rate would allow consumers to manage their debt more efficiently. With the United States total revolving debt at 852.6 billion dollars, of which 98% is, "in