The first bank credit card was issued in 1946 by a New York bank, and Americans never looked back. Today, approximately 80% of American households have one or more credit cards. Over half of those card holders carry a balance on their cards. The average debt per credit card holder exceeds $5,000. The average APR (Annual Percentage Rate) on that debt is 13.59%, approximately $700 in interest per year. It gets worse…that interest isn’t even tax deductible.
But we love credit cards, don’t we? The credit card industry is still booming and getting more competitive every day. Our mailbox is constantly full of new, enticing offers: introductory rates (0% for up to 18 months), 5% “cash back,” redeemable reward points, no annual fees. Why, I even saw an offer the other day for 20% cash back on certain purchases. Wow! Fabulous!
Yes, Americans have gotten carried away with credit—“Buy today, and pay tomorrow.” In recent years, the credit card industry has gone wild in raising interest rates and fees. In February of this year, the Federal government issued the Card Act, which curbed the continuing increases in interest rates and fees and required increased disclosure of the true cost of the debt on credit card statements. Yep, close the barn door after the horse is out.
Don’t sit back and let your credit card company get away with it. If you have a fairly good credit rating, you can be in the driver’s seat. If you don’t like what your issuer is providing, go credit card shopping! There are thousands of issuers providing a variety of choices in credit card options. What are you looking for? Low interest (Did you know there is a bank that is offering 5.15% APR?), no annual fees, cash back or rewards programs, balance transfers, or low-interest cash advances—it’s all there. You can design your own card based on your needs. If you need help in finding the right card for you, check out lowcards.com. They track over 1,000 issuers and rank them based on a number of these features. “What are you carrying in your wallet?”
Next issue – Radio Shopping Deals. I want to make sure the topics in the Frugal Forum are hitting the mark. I would really like to hear from you. Send me your questions or ideas that you would like to share. Mail to: The Frugal Forum, P.O. Box 693, Huntley, IL 60142 or Email: thefrugalforum@gmail.com.
