Credit Card Companies Trying to Use Holiday Shopping to Lead Atlanta Consumers Into Debt
If you've watched television in the last few months, you've seen Jimmy Fallon, Alec Baldwin and that guy hired by Chase pitching the "cash back" benefit or the "perks" and "rewards" of their respective credit cards.
MoneyRates.com recently reported that many credit card companies are trying to seize the moment and strike quickly by trying to lock in new customers by giving away holiday-themed deals.
The reason Black Friday gets its name is because retailers believe that the big shopping day will turn their years around by pushing them from in debt (in the red) into profits (in the black). But in order for this to happen, consumers must be put in the red. And that's what credit card companies are hoping, too.
Atlanta bankruptcy lawyers know that credit card companies make money off of your debt. When consumers swipe the card, they become more indebted to the creditors and their pre-planned hidden fees kick in and high interest rates can kick in if payments are missed or only minimum payments are made. This just leaves consumers struggling as if they were swirling down a drain.
But they are terrified when borrowers mention the word bankruptcy. Filing for bankruptcy in Atlanta puts the consumer in the driver's seat and makes credit card company officials shiver because they now know they won't be able to recover as much money as they are owed.
As MoneyRates points out, these companies are trying to get as many consumers on-board with their cards as possible. The more that is put on their cards, the more they make off interest and other penalties. It keeps investors happy.
Here are some recent examples of "perks" and "rewards" being used by the credit card companies:
- American Express offered a 20 percent discount from certain companies for those who shopped on Small Business Saturday.
- Bank of America has a card that pays 2 percent cash back on groceries and 3 percent on gas up to $1,500 every three months. Another card offers 11 percent cash back on college when shoppers use Upromise.com to shop this holiday season.
- Chase and Citibank are paying cardholders $200 in cash after they put $500 on their cards.
- Capital One has a new card that offers 1 percent cash back on day-to-day shopping and 50 percent in bonus cash back every year.
- Discover offers 0 percent interest for 15 months on purchases and consumers can get 5 percent back on $300 in purchases.
Maybe some of these sound like really good deals. "Cash back" has a great ring to it, doesn't it? But what these creditors aren't telling consumers is that in order to get many of these perks, they have to spend huge amounts of money and, in some cases, pay in back within a month or two to activate the perks.
All of these things are designed solely to entice people to sign up for their cards in order to make money. That's the bottom line. They are smart enough not to give up free money unless they're making a profit. Don't fall into the trap this holiday season.
If you need to speak to an Atlanta bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis.
More Blog Entries:
Holiday Spending Will Spur Credit Card Debt, Bankruptcy in Chicago: November 4, 2011
Credit Card Companies Desperate For Consumers Who May Be Thrust Into Atlanta Bankruptcy: October 19, 2011
New Credit Card Incentives Target Holiday Shoppers, by Jim Sloan, MoneyRates.com