One of the goals for this blog is to help people protect themselves from predatory behavior from corporations. I love capitalism and love being able to benefit from the innovations created by the marketplace. I wish companies tried to do well financially by providing value to the customer. This is what Google, Toyota, Berkshire Hathaway, Apple… do.
However there are many that seek to trick and take advantage of gullible customers. This is especially true of financial companies. If a company tries to trick you by selling you on a less than truthful description of their offer (such as $1 for the first month, or 1% interest for the first 6 months) my experience leads me to believe they don’t have faith that they offer a real value. They don’t believe people would buy what they offer for the real price, so instead they try and trick people with misleading information. And there are plenty of financially illiterate people that fall for these bad deals – don’t let yourself be one of them.
Credit card companies seem to be especially bad at this type of behavior. Most often they just take advantage of people that don’t bother to understand what the real fees and interest rates are. The consumer obviously should accept some of the blame. But tricking people that are not financially literate is not an honorable way to make money. But there are many who don’t seem to mind taking advantage of those that don’t educate themselves.
Business Week has a good article on this topic: Cap One’s Credit Trap. And PBS, Frontline, has a good show on it too: The Secret History of the Credit Card.
Continue your financial literacy education by visiting both those sites and reading and watching (you can watch the entire PBS show online) and learning. If you don’t make the effort to increase your financial literacy it will cost you as others take advantage of you.
Comments
5 Comments so far
Until the credit card companies compete on trying to serve customers well instead of trying to trick customers well such articles are extremely important…
The universities could choose to use their clout to help student instead of just getting a big payday for themselves…
[...] providing value to the customer and making a fair profit from the value they provide. Instead they attempt to do whatever they can to get money from customers. I would guess because they can get more from careless customers that don’t block each [...]
you really need to keep your eye on your credit card company as though they will trick you out of your money given any chance to do so…
The banks in the sample used by FDIC earned an estimated $1.97 billion in NSF-related fees in 2006, representing 74 percent of the $2.66 billion in service charges on deposit accounts reported by these banks…