Blackspot

Credit Card Usury

This Buy Nothing Day cut up your credit cards.

The average credit card in the US charges a 14.39% daily interest rate. Some credit cards charge rates over 30%. These exorbitant interest rates are legal only because of a 1978 US Supreme court ruling that allowed credit card companies to bypass state anti-usury laws. In Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp, the Supreme Court ruled that credit card companies can charge anyone in the nation whatever interest rate is allowed within the home state of the credit card company. This ruling kicked off a rush to move credit card operations to states such as South Dakota that have no anti-usury laws.

Credit card companies utilize a number of deceptive tricks to enslave consumers. For example, they often put the minimum monthly payment at 3% while charging interest of over 14%. Or they engage in the practice of Universal Default, "a term used by issuers who look at their cardholder's history with other creditors, scanning credit files for late payments, maxed out accounts, or payments made to any creditor with a bad check and any liens or judgments against the property and then take an adverse action which result in increased fees." In the end, credit card companies are out to make a profit by keeping you in inescapable debt and by feeding your desire for immediate gratification.

This Buy Nothing Day get out of the consumerism debt trap by cutting up your credit cards. And if you live without credit cards, or have recently cut up a card, share your story below!

Micah M. White is a Contributing Editor at Adbusters Magazine and an independent activist. Micah is currently writing a book on the future of activism. He lives in Binghamton, NY with his wife and two cats. www.micahmwhite.com

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44 comments on the article “Credit Card Usury”

Displaying 1 - 10 of 44

Page 1 of 5

I am so wise

Credit cards are not trying to “enslave” anyone. They are firms that seek to make a profit by providing series of goods and services to the buying public. Given their vast popularity, it seems they’ve succeeded. Of course, credit card companies have been engaged in gotcha capitalism with high interest rates, the universal default bomb, and low minimum payments, but it is a weak form of gotcha capitalism that the savvy customer can dodge by simply paying their bills on time, in full when they are due. I have multiple credit cards and have not once paid a dime in interest after several years of using because I paid the bills in full during the grace period. What you guys have to realize is that customers drive consumerism because they like it and credit cards companies exist because of popular demand. If people weren’t at least satisfied with their credit card companies, they would not exist or there would exist a demand for a “Black Spot” credit card from Adbusters. Now people complain about them, but given their utter refusal to address the problem in any serious manner indicates they’re all right with how things are.

I am so wise

Credit cards are not trying to “enslave” anyone. They are firms that seek to make a profit by providing series of goods and services to the buying public. Given their vast popularity, it seems they’ve succeeded. Of course, credit card companies have been engaged in gotcha capitalism with high interest rates, the universal default bomb, and low minimum payments, but it is a weak form of gotcha capitalism that the savvy customer can dodge by simply paying their bills on time, in full when they are due. I have multiple credit cards and have not once paid a dime in interest after several years of using because I paid the bills in full during the grace period. What you guys have to realize is that customers drive consumerism because they like it and credit cards companies exist because of popular demand. If people weren’t at least satisfied with their credit card companies, they would not exist or there would exist a demand for a “Black Spot” credit card from Adbusters. Now people complain about them, but given their utter refusal to address the problem in any serious manner indicates they’re all right with how things are.

Anonymous

Hey "Wise," What's the deal with your irrational one-man-crusade against AB? I mean, everything you post is based on an assumption that consumption is good and you just expect everyone to share that idea. But most people who come here aren't going to buy that. Why do you even bother to come here?

Anonymous

Hey "Wise," What's the deal with your irrational one-man-crusade against AB? I mean, everything you post is based on an assumption that consumption is good and you just expect everyone to share that idea. But most people who come here aren't going to buy that. Why do you even bother to come here?

sapient73

A simple concept, if you cannot afford it until a later date---- don't buy it.On any credit card made, the rates are " subject to change". So be careful, because they can do anything they want at any time, regardless if you "pay on time".Your rates,terms,grace periods can change any and given moment.In other words, lets say you buy something on the 2nd you plan to pay for it on the 15th because you have 0 % interest.On the third, they could change and jack up your rate to 30%.So that item you bought for 100 is now 130 within a day, and can keep escalating until the 15 th when it's time to pay-----what a merry christmas---hope the item was worth it, and I hope they never decide to do that to anyone.

sapient73

A simple concept, if you cannot afford it until a later date---- don't buy it.On any credit card made, the rates are " subject to change". So be careful, because they can do anything they want at any time, regardless if you "pay on time".Your rates,terms,grace periods can change any and given moment.In other words, lets say you buy something on the 2nd you plan to pay for it on the 15th because you have 0 % interest.On the third, they could change and jack up your rate to 30%.So that item you bought for 100 is now 130 within a day, and can keep escalating until the 15 th when it's time to pay-----what a merry christmas---hope the item was worth it, and I hope they never decide to do that to anyone.

Johnny Appleseed

Ya I thought I had it figured out, I managed to get a credit card at 12.5% interest. Then I had a streak of financing difficulty and maxed it out. Then I noticed that my 12.5% interest was now 16.5%. What happened? I don't know. The kind lady in the call centre couldn't explain it. All she could tell me was that I would most definitely have to pay my card down to "apply" for a lower interest rate. I'm in school full time, so making the minimum payments is about all I can afford, and that literally only covers the interest and the monthly "overlimit fee". Every time I pay it down, the next month it's back where it was before. It's a dead end. The only way I could really get out of this dillemma would be to put at least $8-900 on it and then make at least 1.5 times the minimum payment every month. My point is that it's very tempting to aquire and use a credit card, but they are a trap unless you have the money to pay it fully every month, in which case it would be of little use. I'm paying $100-150 every month in interest. That money would be pretty handy for school supplies or groceries right about now.

Johnny Appleseed

Ya I thought I had it figured out, I managed to get a credit card at 12.5% interest. Then I had a streak of financing difficulty and maxed it out. Then I noticed that my 12.5% interest was now 16.5%. What happened? I don't know. The kind lady in the call centre couldn't explain it. All she could tell me was that I would most definitely have to pay my card down to "apply" for a lower interest rate. I'm in school full time, so making the minimum payments is about all I can afford, and that literally only covers the interest and the monthly "overlimit fee". Every time I pay it down, the next month it's back where it was before. It's a dead end. The only way I could really get out of this dillemma would be to put at least $8-900 on it and then make at least 1.5 times the minimum payment every month. My point is that it's very tempting to aquire and use a credit card, but they are a trap unless you have the money to pay it fully every month, in which case it would be of little use. I'm paying $100-150 every month in interest. That money would be pretty handy for school supplies or groceries right about now.

Anonymous

I think that credit cards are a pointless convenience. From a UK point of view they seem rather silly when most of us already have debit cards which usually come with a reasonable overdraft facility for those little emergencies. Even if one has to fly off to the other side of the world in a hurry most debit cards could probably buy you a ticket and have a bit left over for the duty free. Anyone buying unnecessary things on a credit card when they have a low income needs therapy, either that or the terms and conditions that came with the card were just chucked in the bin..... oh yeh....doh...

Anonymous

I think that credit cards are a pointless convenience. From a UK point of view they seem rather silly when most of us already have debit cards which usually come with a reasonable overdraft facility for those little emergencies. Even if one has to fly off to the other side of the world in a hurry most debit cards could probably buy you a ticket and have a bit left over for the duty free. Anyone buying unnecessary things on a credit card when they have a low income needs therapy, either that or the terms and conditions that came with the card were just chucked in the bin..... oh yeh....doh...

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