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Beat Credit Card Companies at Their Own Game!
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By Daryl
Beat Credit Card Companies at Their Own Game!
Have you ever wondered how much money a credit card company
makes? Have you ever wondered how much of that comes from
late fees? Everyone has and if you haven’t you should
because most likely you own a credit card, which means that
these late fees has or could directly affect you.
As you have probably taken notice, credit card late fees are
on the rise and have been so for a while. There is enormous
competitive pressure on credit-card interest rates and
annual fees, and this has given way to a fee frenzy. For
credit card issuers, late fees now represent their third
largest revenue stream, (interest revenues and merchant fees
rank first and second, respectively). In essence, those who
pay late are now covering the costs for those credit card
users who do not carry a revolving balance and those who
file for bankruptcy.
So how much are credit card companies making from issuing
late fees? Over the years we have watched the number of late
fees charged to consumers jump to record-high levels. Late
fees can range from $10 to as much as $40. The average late
fee more than doubled since 1996 from $13.28 to $29.84. In
fact, many major card issuers are now charging a $35 late
fee. Let’s assume that 100,000 people made late payments for
a particular month and they were charged a late fee of $30
for doing so. This would add up to $3 million in revenue. As
you can see, credit card companies are making a lot of money
off of card holders and there is no slow down in sight
regarding the increase in late fees.
Credit card companies are making a killing off the late fees
they issue to their customers and they don’t mind doing it
because their ultimate goal is to make money. They are like
any other for-profit business in that they sell a product or
service for revenue. In the case of credit card companies,
the product happens to be credit. These companies aren’t
BR>just
some “thing” sucking up as much money as they can.
These “things” are run by man. And wherever man is involved,
greed also becomes involved. These people are just like you
and me. They may have a family to support, bills to pay,
etc. Most people don’t work just for the pure enjoyment, but
for money, a source of income. And the more income we
achieve the easier and better our lives become, supposedly.
Some of you may be asking, “So what do we do about the late
fees?” Well there’s an article that I wrote awhile back that
you may be interested in. You can find this article at
http://www.nextmonthonline.com/WhitePapers/Article1.aspx .
It addresses several methods and tips to avoid having to pay
a late fee. One method in particular that I would like to
address further in this article is the Skip-a-Payment
technique. If you happen to know that you can’t pay your
credit card bill for a particular month just skip it. Next
Month Online is an independent company from credit card
issuers. They allow their visitors to skip a payment for a
nominal fee. This fee is generally 70% than your typical
late fee. You will accrue no late fee and no bad mark on
your credit report. Credit unions often offer this type of
service for loans or mortgages, but first you have to fill
out an application and then you need to qualify. With Next
Month Online, there is no application to fill out and
everyone qualifies as long as they have a credit card.
Credit card companies are not very happy with Next Month
Online because they are losing money every time someone uses
the Skip a Payment service. This is by far the best service
you can use if you know you will be late because you save a
lot of money and avoid all the hassles that come with bad
credit.
Credit card companies are not backing down from increasing
fees. They, for some reason, do not see us as people who
istakes once in awhile or people with other priorities
in our lives. They want their money and they want it now!
This is the reason you should not back down either. Hit them
where it hurts, their pocket books. If you know you will be
late for a particular month, just use a skip a payment
service because the credit card companies will no longer be
taking money from you, you will be taking money from them.
About the Author
Daryl Flagg is the founder and CEO of Next
Month Online. Next Month Online is a service that allows its
visitors to skip credit card payments. They can be found at
http://www.NextMonthOnline.com. Sign up for free!
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(http://www.refinance-refinance.net)
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