Originally published February 20 2005
Exorbitant interest rates on credit cards can compound your debt in almost no time
by Mike Adams, the Health Ranger, NaturalNews Editor
Credit card companies are charging their customers increasingly ridiculous interest rates for late payments, and these interest rates can quickly send your finances spinning out of control. Some companies will charge over 40% interest for those with bad credit who have paid late, which will double your debt every two years. In fact, a late payment to one credit card can cause all your credit cards to charge you the delinquent interest rate.
A few months ago, I wrote a short article highlighting just how high some credit card interest rates are.
According to the folks at the Coalition for Responsible Credit Practices and CardWeb.com, 'Starting (in October), punitive interest rates, among the top ten issuers, will range from 24.65% to 30.74%.
Some folks out there are carrying credit card debt that is growing at 40% per year!
Imagine that you owe a mere $8,000, which happens to be less than the average household with credit card debt.
Fortunately, your friends here at the Fool are interested in helping you dig out of debt.
Start hanging out on our Consumer Credit / Credit Cards discussion board, too, where you'll regularly hear from folks like you who are successfully paying off tens of thousands of dollars of credit card debt.
Maybe you think the scary rates I mentioned are just charged by obscure firms you never deal with.
If so, know that as of October 2004, these were the top penalty rates for some major card issuers, at least one of which has probably issued that card in your wallet: Citigroup (NYSE: C), 28.74%; MBNA (NYSE: KRB), 24.99%; J. P. Morgan Chase (NYSE: JPM), 26.74%; Morgan Stanley's (NYSE: MWD) Discover, 24.99%; Capital One (NYSE: COF), 25.9%; and American Express (NYSE: AXP), 26.74%.
You may have $5,000 in credit card debt and be able to gradually pay it off, but if your car suddenly dies and you charge another $3,000 on your card, your situation has just gotten much more precarious.
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