Hidden Fees and Charges that can Devastate Your Finances

[dollardaze]

Add up those fees, various charges and some unexpected health care issues, or other emergency costs, and you have all the makings for financial ruin. Many of the Americans who are in financial trouble today can tell you that they are responsible for most of their debt situation, but that they had a lot of help from their financial institutions to get as far in trouble as they are.

The problems facing these Americans who are so far in debt, is being compared to those American miners of the past who were so far in debt to the company store, that they knew they could never work enough to pay those debts down.

In the past, lenders actually needed to be repaid by borrowers that they had given loans. Now however, repayment of loans is secondary to all of the fees and charges which are generated when loans are made.

Interest rates have fallen into the low single digits in recent years, but lenders have found new ways to generate more profit from borrowers. Those issuing credit cards routinely charge even those borrowers with good credit records 19.1% interest, which is up from 17.7% in 2005. This difference adds billions of dollars in interest annually for those credit card issuers.

This is in addition to late fees which rose to $35 in 2007, up from less than $13 in 1994. Fees charged to those exceeding their credit limits more than doubled to $26 per month, which is up from $11 previously.

Lenders are using loans to generate perpetual earning assets, instead of needing the actual loans to be repaid. They (lenders) have spent hundreds of millions of dollars on advertising campaigns which make debt sound increasingly desirable and risk-free. These ads are aimed at those people who urgently need loans to pay for health care and other necessities.

[dimetime]

This is why I refuse to have a credit card. It seems that no matter how much you pay on them you can never crawl out from under them.
My fiancee applied for a credit card a few years ago, we only used the card a few times and only when we seemed to have no other choice.Now we are just now to the point where it is almost paid off. Of course that card was destroyed a very long time ago, and we agreed that this will never happen to us again. We both now know that they may be helpful in case of an emergency, but truth is further down the road they are hurtful.
Now days they have those Pre-Paid credit cards, I do hold one of these. Though of course when applying for one be sure to put your glasses on or grab a magnifying glass to read all those terms and conditions.

Thanks for adding this post, this is very important information that people really need to know, and I bet most dont know.

[moneysense]

We have no credit cards at all. The credit card we had was just too hard to pay off, even back when interest, etc, was lower.

You just cant make the minimum payments and expect to pay off the card. It takes paying them off each month or high payments to get them paid off.

And now, it states right on the gas pumps, that there will be an additional 3% charged to your credit cards when using them to purchas gas.

Some one needs to put a ceiling on what extra charges these companies can charge to their card users.