GCYArticles.com is an Article Directory featuring thousands of articles written by the Internet's top authors

Search Article Directory:

Or browse through our library of Articles written by the Internet's top authors

What you get at GCYArticles.com
	Thousands of expertly written Articles
	Free Content for your website, ezine, and newsletters
	Daily Updates
	Receive article updates via RSS Feeds
	Real Time and Weekly notifications of New Articles

As an Author
	Generate massive publicity for your web site
	Potential readership of millions for your articles
	Increase your traffic and sales
	Boost your reputation, credibility, and name recognition
	Become known as an Expert in your field

Home | Finance

Click the XML Icon Above to Receive Finance Articles Via RSS!

The Credit Card Debt Sector Both Sides Now

By: Adam J. Heist

Credit cards are used by hundreds of millions of people and are very convenient, with some added perks like cash back for certain purchases. Unfortunately, they can often be abused and then the consumer is left with a large debt that they have difficulty servicing.

Another way of looking at these issues is the huge amount of credit card debt, and the way that banks manage this. One weapon that banks have been using with increasing frequency, is the “universal default” clause of credit card agreements. A bank can check the consumer’s credit rating, his FICO score, and if it thinks that it is too high or has gone up, the bank can raise the interest rate on the consumer’s credit card debt. Some states have no limit on the interest rates that can be charged, there are no usury laws. That is why a large number of credit card operations are run from South Dakota, which has no usury laws. Your credit card rates can rise dramatically, of course if you are late in your payments. Studies show that about 35 million Americans pay the minimum payment on their credit cards month after month that can be as low as 2 percent of the balance. If a consumer does this, they end up paying a yearly interest rate of over 13 percent, which means paying more for your purchases. Many of these people eventually end up in debt counseling or bankruptcy. In fact, the high rate of defaults on unsecured debt was the main reason for the banking industry’s pressing for the passing of the 2005 Bankruptcy law, which makes it more difficult to write off unsecured credit card debt. After all, the credit card debt market is a fairly large sector, of about $2.2 trillion and growing every year.

Meanwhile, since late in 2005, the Bank of America has become the dominant player in the credit card field. They bought up the $35 billion MNBA Corporation, which is Delaware’s largest employer. The combined corporation has almost 120 million credit card accounts and a dominant position in the credit card market. The result is that three players; Bank of America, JPMorgan Chase and Citibank, control 55 percent of the total credit card market. This is a parallel development to the fact that these three banks control something like 90 percent of the derivatives contracts. Derivatives are speculative instruments derived from the value of either commodities like grain or oil, or financial indexes like interest rates, or more complex instruments like caps and swaps.

Article Source: http://www.gcyarticles.com

Adam Heist is an expert in the field of loans and runs a highly popular and comprehensive home loan finance uk web site. For more articles and resources on loans related topics and much more visit his site today.

Please Rate this Article

Not yet Rated

Additional Articles From - Home | Finance

Trading Shares Using Leverage - By : Roy Masters
Selected Resources for mortgages - By : Scott Co
Avoid foreclosure short sale if you have 2 houses - By : David Silver
Cash Gifting: Which Cash Gifting Program is Right for You? - By : Roberto Bell
How To Choose A Debt Settlement Program - By : Roberto Bell
Children's Savings Accounts - By : William Blake
Why A Prepaid Credit Card? - By : James Mcquire
Credit Cards And Your Credit Report - By : Nick Makaryk..
Debt Free Solution - Free Yourself From Debt - By : Eli Elst
Should Investors Finally Breathe a Sigh of Relief? - By : Maximilian Sparrowson

Members: Login here

Non-Members: Sign Up for a free account or learn more.

Site Navigation
	Submit Articles
	Top Authors
	Most Popular Articles
	Submission Guidelines
	Ezine Notifications
	Article RSS Feeds

	New Stuff
	About Us
	Link to Us
	Contact Us
	Privacy Policy
	Publisher Guidelines