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How Credit Card Companies Stack Your Debt Against You

How Credit Card Companies Stack Your Debt Against You

The credit card industry targets good people of all ages and income levels—including children and the elderly—with pre-approved credit card offers.

Many consumers are under the impression that banks and other lenders carefully evaluate your ability to pay off these debts before they extend you credit.

In fact, the reason those "pre-approved" credit offers arrive in such a deluge is because they are not based on your credit report. They are based on marketing research—not on what you can afford, but on how much money credit card companies can expect you to spend.

The simple truth is this: Credit card companies don't make money if you pay off your entire balance every month—they only make money off of the interest, fees and penalties they charge you if you don't. Ask yourself, what percentage of your annual income is your credit debt? Individuals can afford 1% - 2% of their annual income in credit card debt. What is your percentage? Most individuals who call me owe more than 35%. 

What makes that interest and those fees and penalties even more threatening is the "universal default policy." You may think that paying four out of five of your credit cards on time is better than paying all of them late, but it might not be. If you default on one credit card, not only will that company raise your interest rates—it will inform the other companies, and they will raise your rates on their accounts.

It's time to get free of your credit card debt. Contact me today to get started.

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Phone: 206-633-2517
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